To elaborate on fixed price vs cost plus contracts: starliner was a fixed price contract of $4.2 billion. Which means NASA gave boeing $4.2 billion to develop starliner. Any costs incurred over that amount would not get billed to NASA and comes out of boeing’s pockets.
How defense/aerospace usually operates is cost plus. At the end of/during development, no matter how much money it costs, boeing gets to bill NASA for all development costs plus an additional fee.
Aerospace/defense is full of so many inefficiencies and delays that the ending cost of development is always much more than the initial pitch.
To elaborate on fixed price vs cost plus contracts: starliner was a fixed price contract of $4.2 billion. Which means NASA gave boeing $4.2 billion to develop starliner. Any costs incurred over that amount would not get billed to NASA and comes out of boeing’s pockets.
How defense/aerospace usually operates is cost plus. At the end of/during development, no matter how much money it costs, boeing gets to bill NASA for all development costs plus an additional fee.
Aerospace/defense is full of so many inefficiencies and delays that the ending cost of development is always much more than the initial pitch.