A government contractor had a contract with NASA to build a space shuttle. Under this contract, all
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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.
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Cost Management Strategies For Business Decisions
ISBN: 12
4th Edition
Authors: Ronald Hilton, Michael Maher, Frank Selto
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