Reply to Fed Contracts - Great Unraveling or 18 Theses

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Another thread on FFRDCs alluded to this, but its impact extends to a ton of federal contracts, defense and civilian.

Palantir is looking to lead an in innovation revolution in defense services, and part of its claim as to why Big Five are entrenched is the wide use of cost plus contracts.

Their manifesto

https://www.18theses.com/

There is now a big push for firm fixed price contracts for almost every contract of there. We are seeing it in our science contracts, which may be bad for if we want experiments to complete, as re-do, problem resolution, are completely unpredictable so we will either have contracts padded really high or exhaust funds and work is halted. How does it work in reality?[/quote]

The form of a contract is ultimately an expression of risks and incentives. Cost plus incentivizes companies to bid low and the government owns the risk of overruns. A FFP contract incentivizes companies to bid high because they own all the risk of overruns. How it works in reality depends in both cases on having the government be a smart and involved buyer. In most cases it isn’t going to be obvious which form of contract costs less in the end. [/quote]

Any sort of cost contract, especially CPFF is called an exotic at my agency. They are risky as hell, and it usually reveals that the program office has no faith in their own planning skills. Problem here is that program offices don’t know how to define their requirements. [/quote]

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