Is McCain off-base about cost-plus contracts?
Several readers from the Defense Department have responded to our story about McCain and cost-plus contracts. In case you didn’t catch it, during last week’s presidential debates, Sen. John McCain said one way the government could save money (in the wake of a $700 billion banking bail out) is by moving from cost-plus to fixed-cost contracts. “We need very badly to understand that defense spending is very important and vital, particularly in the new challenges we face in the world, but we have to get a lot of the cost overruns under control,” McCain said (read the FCW story here). But each of these readers argues that the cost-plus contracting itself is not the problem. The problem, they say, is government’s inability to define requirements clearly. “Cost plus contracts, if properly used, save money,” wrote one reader. “If contractors bid on work that is not well defined, but necessary (repairing jet aircraft, when you don’t know everything that is broken???), the contractor must cover
