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I bet space exploration will start to take-off with this more privatized approach as it is a little similar to how computers were funded by DoD - government con

I bet space exploration will start to take-off with this more privatized approach as it is a little similar to how computers were funded by DoD - government contracts for building new technologies that private companies can compete to decrease the costs of. http://history.sandiego.edu/GEN/recording/computer1.html http://history.sandiego.edu/GEN/recording/computer1.html

sophacles 17y ago
This time tho, I demand that all R&D funded by such contracts results in non-patentable tech. My tax dollars buy the research, I'll access my results.
_delirium 17y ago
Hasn't the DoD worked more the other way around--- cost-plus contracts with unlimited overruns reimbursed, for building new technologies that private companies can compete to increase the costs of? Defense contracting is a pretty notorious money pit.
- jcnnghm 17y ago
  There is a huge misconception about cost-plus contracting. It's actually the least expensive way to develop new technology, that's almost exclusively where it's used, and it's designed as a risk mitigation factor. In essence, if a company had to bid to develop some new technology, it's essentially impossible to estimate, so they would have to inflate their numbers pretty drastically to ensure they could cover their costs. In other words, to mitigate the risk of overruns, the company would inflate their price to way more than it should cost, since they are uncertain about realistic time-frames. To mitigate this, the government will pay a company their actual cost plus a reasonable profit. This transfers the risk to the government, reducing their overall cost. To prevent abuses, the government must approve all costs, so they will place an engineering team with the contractor to perform this task. Contrary to popular belief, this system makes a great deal of sense as it relates to bidding risk, and is actually quite difficult to abuse.
  - eru 17y ago
    Interesting. How do they deal with regulatory capture?
  - _delirium 17y ago
    Why is cost-plus contracting less expensive than the government doing it in-house, except in the cases where it's a very rare one-off thing that's not worth developing in-house expertise for? If the government is bearing all risk, and the only oversight is government oversight (no market discipline), there's no real advantages to the private sector.

sophacles 17y ago

This time tho, I demand that all R&D funded by such contracts results in non-patentable tech. My tax dollars buy the research, I'll access my results.

_delirium 17y ago

Hasn't the DoD worked more the other way around--- cost-plus contracts with unlimited overruns reimbursed, for building new technologies that private companies can compete to increase the costs of? Defense contracting is a pretty notorious money pit.

jcnnghm 17y ago
There is a huge misconception about cost-plus contracting. It's actually the least expensive way to develop new technology, that's almost exclusively where it's used, and it's designed as a risk mitigation factor. In essence, if a company had to bid to develop some new technology, it's essentially impossible to estimate, so they would have to inflate their numbers pretty drastically to ensure they could cover their costs. In other words, to mitigate the risk of overruns, the company would inflate their price to way more than it should cost, since they are uncertain about realistic time-frames. To mitigate this, the government will pay a company their actual cost plus a reasonable profit. This transfers the risk to the government, reducing their overall cost. To prevent abuses, the government must approve all costs, so they will place an engineering team with the contractor to perform this task. Contrary to popular belief, this system makes a great deal of sense as it relates to bidding risk, and is actually quite difficult to abuse.
- eru 17y ago
  Interesting. How do they deal with regulatory capture?
- _delirium 17y ago
  Why is cost-plus contracting less expensive than the government doing it in-house, except in the cases where it's a very rare one-off thing that's not worth developing in-house expertise for? If the government is bearing all risk, and the only oversight is government oversight (no market discipline), there's no real advantages to the private sector.