Army attempts to reassure industry on software acquisition
Summary
The cost-plus model isn’t totally alien to the private sector: There are plenty of businesses, from home repair specialists to law offices, where a client pays for a contractors’ time and materials, plus a percentage to cover overhead and profit. To do that, the Defense Department imposes a strict, complex, and unique system of cost accounting that requires companies to track, among other things, hours worked by employees of various government-defined grades. This works, sort of, for companies building traditional weapons systems like tanks, warships, and planes: Those are physical objects built by employees in formally classified trades — welders, fitters, electricians, and many more — who are generally paid by the hour. “We put out a draft RFI on Friday [and] inadvertently included labor categories that have all of the education requirements and things that we’ve always used that don’t really make any sense anymore,” Swanson said at AFCEA. The commercial market already has software for virtually every occasion that the government can buy for the firm-fixed price on the sticker, they say, without needing to pay extra to build bespoke solutions — let alone to do so using cost-plus contracts.