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costs

A collection of 7 issues

Buying the last procurement

There's a famous proverb that generals are always preparing to fight the last war. Similarly, one way to think about government contracting is that the government is always preparing to buy the last procurement. Today, we discuss an example of how the government learns — and sometimes overlearns — from

Some super boring finance stuff about stock buybacks

A few weeks ago, Matt Levine wrote an article entitled "People are worried about oil stock buybacks" where he wrote about how the oil-and-gas industry is using its record-setting profits to return money back to shareholders in the form of buybacks rather than invest in new energy supply.

Earnings call

A fun dynamic in government contracting is that people treat things that happen before a contract is awarded (pre-award) and things that happen after a contract is awarded (post-award) as if they are two totally different spheres. This dynamic shows up in organization structures. In government, there's a

The Service Contract Act can be costly

We've talked about the Service Contract Act (the "SCA") before, but the basic idea is that for service contracts and for certain labor categories, government contractors have to pay people within those labor categories a "prevailing wage". The way it works is that the

The windfall that didn't come

A major theme in government contracting is figuring out "who bears the risk" for certain things. This comes up a lot in discussions around "contract type" and the differences between firm-fixed-price contracts and cost-reimbursable contracts. Typically, in a firm-fixed-price contract, the contractor bears the risk of

Seller beware

Suppose you're putting together a proposal with the following facts: 1. You're the incumbent on a contract where some of the labor categories on the contract are covered under the Service Contract Act (the "SCA") and, therefore, you must pay people within those labor

Just the cost of government business

From an industry-risk perspective, the government-contracts industry is sort of a mixed bag. On one hand, the business of government contracting is not especially volatile. Spending levels are pretty predictable, and generally resistant to market forces. For example, even though the tech industry is in the midst of a "