Boeing says it can’t make money with fixed-price contracts::“Rest assured we haven’t signed any fixed-price development contracts, nor intend to.”
Boeing says it can’t make money with fixed-price contracts::“Rest assured we haven’t signed any fixed-price development contracts, nor intend to.”
So either you suck at forecasting your own production, or you suck at production enough to not hit your forecast? And you want other people to pay you more because you don’t have a good handle on your buisness?
I don’t think they suck at forecasting…I think they are probably exceptional at forecasting but willfully lie about project costs when submitting bids for projects in order to come under the competition and win the contract. There doesn’t seem to be any penalties for this, so why would they stop?
That happens all the time. I went through several government contracts where a company would come and under bid the current contract by a significant amount, win the bid, offer the current contractors 3/4 of what they were being paid and fill in the rest with new hires. There is no continuity between contracts so unless a bunch of the old contractors took a pay cut to stay on they would come in and start from scratch with all new processes and procedures and absolutely slow down productivity for all those they were supposed to be providing support.
If they’re anything like other DOD contractors they make empty promises and straight up lies to get bids on contracts that they can’t deliver on time on. They know they will fail these timelines but it makes them look good for that quarter so it doesn’t matter to them.
The forecasts for FFP projects have competitive forces pushing them down. Many times they will underbid to win than hope everything goes perfect or they can find a way to weasel out of it.