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willbeurdaddy -> RE: Whistleblower wins case. (7/28/2011 7:43:43 AM)
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ORIGINAL: DarkSteven
quote:
ORIGINAL: Sanity
Because that was the only company in the world capable of doing that job
Then why not put it out for competitive bid and award the contract based on KBR having sole capabilities for it? It would have been a lot better politically at least.
quote:
ORIGINAL: Politesub53
To just explain how Costs plus cash works..... You submit and invoice with a set some added on, the more you invoice the more you earn.
Lucrative to company owners but costly to the tax payer.
Clarifying:
Cost plus means that whatever is invoiced gets paid, plus a fixed percent. Maximizing costs will maximize income. Widely used back when NASA was set up, and used in a LOT of contracts back in the day but almost never used now.
Fixed fee is when the whole job gets done for a set amount. That's the standard in the private sector. It is a pain in the defense community because, frankly, a lot of the work is done AFTER the contract is signed, and this results in multiple ongoing renegotiations.
Cost plus fixed fee is how the KBR contract SHOULD have been set up. The company gets its invoice paid plus a set fee. The less they spend, the higher the percentage of the total the fixed fee represents, which is an incentive to keep costs down.
Cost
Sole sourcing to Halliburton/KBR started under the Clinton Adminstration and continued throught GWB and continues to this day under Obama. Lack of capable competition and the efficiencies of continuity are the primary reasons. The lack of competition stems from the consolidation in government contractors forced by the phony "peace dividend". We are paying more for everything now because of it.
And, as noted in my other post, your last is a description of "cost plus with incentives" not pure cost plus.
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