You, don't have a clue about the Defense Contract Industry...oh, you think you do, but in reality you don't. You have heard, or read some left-wing blogs/publications, written by people that are clueless themselves. Some of what you said was partially true, but you're clueless to the causes, and who is responsible. I am one of those retired military officers who got out of the Navy and worked for several different defense contractors, as a Program/Project Manager, a Proposal Manager, and as Director of Military Contracts, and you sir, don't have a clue about what you're talking about.
The $500 dollar hammers, and $1500 toilet seat are NOT caused by the Defense Contractor...they're caused by the branch of service who awarded the contract, and who administers iit...oh, and a thing called MILSPEC. Those ex-military types you rant about that get out and then make big bucks, is partially true, but those same people also go to work for the military and are involved in awarding/auditing/administering the contract. Those government workers get paid big bucks too, and their salary is paid by the taxpayer.
The Defense Contract Industry is a game...yes, I said game. But, the government/Military set the rules, and they created the game. No contractor will make a profit by producing what they originally proposed, and was awarded...in fact they'll lose money. The name of the game is lowest bidder gets the contract, that is as long as it isn't a fraudulent proposed contract (which there are quite of these too, usually by new contractors who don't understand the game). And, if you want to work in a burn-out high stress long hours job, get a job as a proposal manager. Now, big ship contracts, like this Carrier, is usually only between a couple companies, because only a couple shipyards/companies have the expertise to build a large ship, or plane, or weapon system. But, there are hundreds of big to small contracts awarded to second, third, fourth, tier sub-contractors...the shipyard usually just assembles everything and is the main administrator of the contract.
Since no contractor will make a profit on their original bid, how do they make money? They make money on change orders. They may have bid an engineer at $16/hr on the original contract (which was most likely really paid $24/hr), but on the change order they will bid/charge the $24/hr plus overhead, materials, etc.). Now, let me say that if you are awarded a contract where you bid that engineer at $16/hr, and he actually makes $24/hr, and for whatever reason there are no change orders ever made to that contract, the government will sit back and let you lose money. I know, I took over a contract just like that, and my job was to minimize the loss...we lost $4M. Now, who initiates these changes? It's the government/military, not the contractor...if the contractor does, he will eat it usually, unless they can convince the government/military that it was overlooked by both sides, or it is some new system/technology. It takes on an average 7 years to get a new weapon/electronics system from the drawing table to the fleet...whole ships can take longer. During this time new technologies arise that the military decides it wants, and the contract price goes up (labor+materials+overhead, which can be big bucks). The military is the biggest culprit in creating change orders and driving up the costs. Those $500 hammers are caused by the military not the contractor, due to a thing called MILSPEC. Require a new tool to fix an item, the military will want that supplied by the contractor, even though one could buy that tool for $50 at Sears. First it needs a MILSPEC drawing, that by itself will be $10,000, then it has to be QA'd, taken to a government QA facility, frozen down to -70 degrees, and heated in an oven to a 160 degrees, and tolerances measured each time, etc. That drives up the cost, in the end, that Sears $50 hammer now has cost the government (and tax payer) $500. Now, the more they order, the price goes down...but, usually they only require a few. And, from experience, most contractors will try and convince the military to save money and purchase the hammers from Sears...the contractor does not want to mess with them.
The profit margin of most large Defense contractors is around 2-4%, but 2% of a several million/billion dollar contract is a sizable chunk. The government/military will put large QA entities on site, requiring the contractor to provide offices/facilities, etc. These QA people can be like vultures sitting on limbs...trust me they can make your life miserable. They in turn, with their oversight, will drive up the cost of a contract. No Defense Contractor that I ever worked for tried to perform shady or fraudulent work or charging...in fact they will bend over backwards to prevent it. I have been in many an stressful ulcer creating situations/meetings trying to find solutions to keep costs down. It behooves them to, it's their livelihood, they can't afford to be black listed. Now are there some unscrupulous ones out there, sure there are, but the percentage is not as high as one would think. A lot of those come from sole-source non-competitive bids and they get used to padding things, they get caught.
Yeah, the costs of those contracts are high, but it's usually not the contractor who drives up that cost, it is the military, and/or government. Defense contractors come and go, merge, etc during bad economic times, I think more than civilian industries. Huge lay-offs are very common in the Defense Contract industry, there is no such thing as job security. Now, we could have the government take over all these contractors, like China and Russia has, but you will spend even more money, and get an inferior product.
I could go on, and on, but I think I've said enough. There are a lot of good and honest defense contractors out there, and having many ex-military/retired military on their payrolls, and trust me most of these people are looking out for the military's interest, not just to increase the profit of the contractor.
You, don't have a clue about the Defense Contract ... (
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