Migrating to Firm Fixed Price (FFP) contracts is a good way for DoD to reduce costs. But these cost savings may come at a price. If industry owns 100% of the risk for contract cost overruns, this burden may have a chilling effect on defense R&D.
On the other hand, commercial technology companies own 100% of their development risk, and when it comes to R&D, they are setting the pace!
A case of ‘Pentagon Hold ‘Em’ – Washington Business Journal.