Main Page Contact Register Log In

It's created by Lockheed Martin which is likely payed cost-plus.

So? Most corporations make a profit. Most of them don't have its problems. Heck, earlier fighters didn't have cost overruns of anywhere near this magnitude.

Cost-plus is a contract where a company isn't payed a predetermined price. Instead they have to report the costs they had to fulfill the contract and then get payed costs+X%. That means that the company doing the contract profits financially from cost overruns.

When companies are payed a market price, companies try to keep their costs as low as possible because they make a larger profit when they have low costs.
Replies (0)