Contracts where all profits scale 1:1 with costs are a relatively small slice of total spending due to obvious poor incentives.
Fuel and similar commodities may look kind of like a cost+ contract, but it’s market price + X$ not market price * some profit margin so the incentives are different. It’s a net win for both sides if such variables are removed from the equation.
Fuel and similar commodities may look kind of like a cost+ contract, but it’s market price + X$ not market price * some profit margin so the incentives are different. It’s a net win for both sides if such variables are removed from the equation.