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Traditional defense contractors have low profit margin because of the cost plus pricing on the contracts. They literally are only allowed to charge the cost the
by xyzzyz 7mo ago
Traditional defense contractors have low profit margin because of the cost plus pricing on the contracts. They literally are only allowed to charge the cost they incur plus some fixed profit percentage. As such, they have incentive to drive up the costs, so that their profit, while low percentage, is on high base.
SpaceX wouldn’t need to so that. Companies like Anduril already are trying to win contracts on fixed price model, and if they succeed, they’ll have much higher profit margins than Raytheon et al.
- infinitewars 7mo agoThat's right.. and Golden Dome (which is definitely a mult-trillion dollar program if space based weapons are employed) has a bunch of convenient oligarch properties like built-in planned obsolescence with orbital decay that amplifies a launch monopoly.
- rayiner 7mo ago> which is definitely a mult-trillion dollar program The program already exists and you can see how much has been allocated to it.
- infinitewars 7mo agoSure let's pretend the first year budget of the program represents its entire future. Even still it is already 2.2% of the entire federal budget. Multiple estimates put the total Golden Dome cost in the $$ trillions.
- rayiner 7mo agoThe estimates that have Golden Dome at anything close to a trillion dollars are posited on the assumption that it will be much more expensive to build than the administration believes it will take. If it ends up as fixed price bids and costs less than people think, it will be well under $200 billion.
- infinitewars 7mo agoThere are multiple estimates, including by Republican members of Congress and think-tanks that put it in the many trillions of dollars.