There's a fun story in Ash Carter's book about the F-35 project. He wanted Lockhead Martin to start hitting cost targets. So in a meeting over it he warned that

There's a fun story in Ash Carter's book about the F-35 project. He wanted Lockhead Martin to start hitting cost targets. So in a meeting over it he warned that the pentagon would be curtailing it's order unless the targets were met. Reportedly the LM executive replied "you tell me how much money you have, and I'll tell you how many planes you get." This apparently pissed Carter off enough to reply "how about none" and walk out of the room to let them stew for a while. Anyhow, end result was a renegotiation of the contract where overruns would largely come out of LM's side. Shockingly they suddenly started hitting the targets. /s It's really hard to structure the incentives right here, and to some extent relies on having government leaders willing to rock the boat in negotiations.