When someone or a group of people own something and they need to turn a profit for the investors, they try to maximize income and minimize expenditures.  Of course, they have to build and protect a brand, thus have to be responsive to the concerns of their customers long term. 

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Competition simply keeps prices down.  Most examples of high prices in the private sector is the result of government restricting competition.  

Government is a monopoly thus, government does not need to worry about profit and politicians main concern is reelection.  Without people having a choice, how do politicians know if something is needed.  

Cost Plus is certainly a business model that some like and others do not.  It works better in some situations and worse in others.  The way it is structured can turn a good model bad.

Bringing this topic up is not to give my opinion on it, however it is to make the point that Cost plus contracts are not often found in commercial contracting but are frequent in government contracting. 
When the cost of a project  is not relevant to the income that project will bring in, government spending is not likely going to the best use. 

After Katrina greatly damaged New Orleans and other cities, thousands of cars were water damaged and abandoned on the public streets. Some cities contracted out with private companies that saw worth in these cars and paid the city a certain amount to clear the cars and take worth out in the form of parts or scrap metal.  These cities were cleared within weeks. New Orleans went another direction.  After leaving these cars scattered throughout the city for over a year, the city finally paid a contracted to remove the cars.  
Yes, some cities were paid for the cars, which were removed quickly and others paid the contractors to clear the roads, which took years. 

 


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    Bill Haley

      Bill Haley started Haley2024 in the spring of 2013 in an effort to his part in restoring freedom to America.

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