NASA

I’d frame this discussion somewhat differently. Fixed-cost service contracts are really good when everyone involved knows what the hell they’re doing. When the contractor doesn’t know what they’re doing, they either inflate the bid or under-bid and lose money. When the government doesn’t know what it’s doing, it gives bad requirements and the result is either poor outcomes (spent the money, didn’t get what we needed) or shitloads of change orders (which is where cost-plus bites you anyways).

So - for fixed-price to work, it needs to be for a service both parties fully understand. Guess what? Nobody knows what the hell we’re doing with lunar travel. Not NASA, not the billionaire space enthusiasts, nobody. We’re making it up as we go along… and that’s okay unless we’re locked into contract mechanisms that make adjustment and collaboration difficult. Guess what? That’s exactly what we did.

Fixed-price is a different kind of “screwed” than cost-plus. It’s not less screwed…just different.

Let’s add this technology development piece to the story. Everyone doing space stuff needs CFM. In the old days, NASA would pay a lot of money to have a technology developed… but they’d own the rights and could license it or give it away. In the new world order, NASA is still paying (slightly less) for the technology to be developed… but the solutions may not be broadly useful to the rest of NASA’s goals… and nobody else gets the benefit of the technology. That’s called vendor lock, and vendor lock sucks in any situation.

So I dunno. It’s complicated, but it’s not the fault of the CFM engineers. NASA is indirectly throwing money at CFM, and they’re not getting good value for money in that investment. If you ask me, it’s the fault of the contracts folks for not thinking through these enormously obvious pitfalls and coming up with ways to manage them.