A government contractor had a contract with NASA to build a space shuttle. Under this contract, all

Question:

A government contractor had a contract with NASA to build a space shuttle. Under this contract, all costs of development and construction are to be reimbursed and the contractor is to be guaranteed a specific profit. At the same time, the contractor had a fixed-fee contract with the U.S. Air Force to build fighter planes, which limited total reimbursement to the contractor to a fixed amount. The Air Force contract had a cost overrun that the contractor transferred to the NASA contract. Explain how this might have been accomplished and why the contractor might have thought it was desirable.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Cost Management Strategies For Business Decisions

ISBN: 12

4th Edition

Authors: Ronald Hilton, Michael Maher, Frank Selto

Question Posted: