Why defense purchases tend to

Why defense purchases tend to cost more than expected

Intel Dump posts on the incentives faced by defense contractors as they prepare their bids: "Trimming the fat at the Pentagon".

"...The real problem with weapons programs it that their cost tends to balloon as they age. Retired Pentagon analyst Franklin "Chuck" Spinney has done some brilliant work (see this data too) investigating weapons programs over the past 30 years, and his work indicates that every major weapons program winds up costing much more than we thought when we bought it. The reasons are simple. Defense contractors push a lot of their costs to the back end so that they can get the Pentagon to buy in when a project looks cheap. As the costs balloon, the contractors can file a claim for the costs, usually based on some sort of constructive change in the contract. The result is that large procurement programs have a deceptively small cost in the short-term, and a larger cost in the long-term, and an overall cost that's much higher than anticipated..."

You can access the Spinney links through the Intel Dump link.