That argument is used by utilities to defang the utility commissions!
Big companies only understand pain, but they don’t systematically feel pain unless you’re able to inflict it. Every fine reduces someone’s bonus, so you want the incentive to encourage resolution under pressure - otherwise, if you get fined no matter what, there’s no incentive to act.
Works the same way with services contracts. If you force the provider to price penalties into the P&L as a matter of course, you’ve lost the ability to compel behavior. Companies internally incentivize loss avoidance.
Big companies only understand pain, but they don’t systematically feel pain unless you’re able to inflict it. Every fine reduces someone’s bonus, so you want the incentive to encourage resolution under pressure - otherwise, if you get fined no matter what, there’s no incentive to act.
Works the same way with services contracts. If you force the provider to price penalties into the P&L as a matter of course, you’ve lost the ability to compel behavior. Companies internally incentivize loss avoidance.