What Kind Of Contract Is That?
Here’s an Oct-17 contract announcement from the defense.gov website.
“Lockheed Martin Corp., Lockheed Martin Aeronautics Co., Fort Worth, Texas, is being awarded a $743,169,377 fixed-price-incentive, firm target and cost-plus-fixed-fee modification to the previously awarded low-rate initial production Lot 9 F-35 Lightening II Joint Strike Fighter advance acquisition contract (N00019-14-C-0002). This modification provides additional funding and will establish not-to-exceed (NTE) prices for diminishing manufacturing and material shortages redesign and development, estimated post production concurrency changes and country unique requirements. In addition, this modification will establish NTE prices for one F-35A aircraft and one F-35B aircraft for a non-U.S. Department of Defense (DoD) participant in the F-35 program. “
There’s a couple of interesting points here. First is the absolutely baffling contract type description: “fixed-price-incentive, firm target and cost-plus-fixed-fee modification to the previously awarded low-rate initial production Lot 9 F-35 Lightening II Joint Strike Fighter advance acquisition contract”. Huh???? Be honest, do any of you understand exactly what that means? Isn’t “cost-plus-fixed-fee an oxymoron?
Second, is the not-to-exceed (NTE) prices. I understand what the phrase “not-to-exceed” means but how does it apply here? There is no actual Lot 9 purchase contract in effect, yet, so how can not-to-exceed prices be established?
Why are the Lot 9 contract negotiations continuing to drag on? Probably because no one understands what the contract says!
All this tells me is that there are way too many lawyers in the world!
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