> still don’t understand how a single missile “costs” more than a million dollars, even with absurd mark up
I assume the part that isn't profit is development. The actual unit cost of manufacture is quite small.
This is why military contracts should be fixed price payable on achieving deliverables. Let the vendor own the risk and price it in. The military picks the lowest credible price.
Back in the days of the nuke programs the companies were not permitted to charge more than the per device cost.
It was recognized that the tech that they developed depended on a lot of resources they got from the us gov - r&d, testing facilities, etc.
In exchange for only chargin actual cost, they were allowed to monetize technology and equipment that was developed in conjunction with the government.
That’s why they weren’t allowed to charge more than the cost of production: they didn’t pay for all of the r&d, they didn’t have to pay for cleanup (hence superfund sites). Their profit came from selling products using government funded research to non-gov entities
I assume the part that isn't profit is development. The actual unit cost of manufacture is quite small.
This is why military contracts should be fixed price payable on achieving deliverables. Let the vendor own the risk and price it in. The military picks the lowest credible price.