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Old 15th Sep 2009, 05:59
  #58 (permalink)  
tucumseh
 
Join Date: Feb 2003
Location: uk
Posts: 3,226
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Squirrel
FIXED PRICE CONTRACT

It is one of the quirks of procurement speak that "Fixed is variable, and Firm is Fixed".

And, regardless of the pricing strategy, the price only holds good for the services or goods that the contract calls up. Change something after contract award, and you pay.

MoD doesn't help itself in this respect. For example, CDP and the Nimrod 2 Star in PE/DPA ruled a few years ago that a project manager could, without recourse to the Customer/Sponsors, waive certain contracted requirements yet still pay the full amount. The more obvious ones were minor things like systems integration, Design Reviews - you know, inconvenient airworthiness things. The reasons were various, but usually involved the contractor taking on more than he could chew, or declaring he wasn't making enough profit.

Crucially, they also ruled that when the sh1t hit the fan (for example, through not being able to attain MA Release) the contractor could be paid a second time to do what was waived.

And on one particular subect, notable for it being referred to in a subsequent board of inquiry, they both ruled it ok that the contractor could be paid for not doing it a second time, and 3rd and 4th payments made to the contractors who should have been contracted in the first place - without clawing back the nugatory spend. That is, money was wasted on a grand scale by paying the favoured, rather than competent, contractor.

And no, I don't agree with all this. But I do agree you are right to query the nature of the contracts. 9 (thought that was reducing?) instead of 21, for a greater sum, is gross incompetence. But, whisper it, those responsible were the ones rewarded.
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