I have seen that DOGE wants to get away from cost plus contracting in the federal government. What is that you ask? A contract where you get paid for all your legitimate costs plus a profit based on a percentage of your costs. They are common in the federal government and actually encourage companies to inflate their costs because it will increase their profits.

I can give you one example from my days in the swamp. I was, due to my position as the Assistant General Counsel responsible for contracts, the legal person on a committee that had to review and approve all major contracts in the agency. On one occasion and I don’t remember the specifics but it had to do with upgrading something on nuclear power plants. Anyway during the course of the discussion it became clear that most of the work would be done in the first year of the contract and I asked if that is true then why is the payout under this contract a geometric progression and it surprised them that I asked the obvious.

Now if you don’t know what a geometric progression is, it’s a series that goes up by a given factor every year. For example if some service costs two million in year one and then four million in year two and then eight million in year three etc that is a geometric progression. The price doubles every year.

The result was they had to scale down payments in outer years.

And it reminded me of another committee I was on dealing with major rule making. We took a trip to Paducah, Kentucky to visit a Uranium enrichment facility and as part of that trip we also visited a facility across the Ohio river in Metropolis, Indiana dealing with uranium hexaflouride. Btw they have a large Superman statue in the town square. However, the thing I want to mention is that on the day we visited the temperature was 102! Inside the plant we put on appropriate clothing and the temperature at the top level was 132. My point is that we got out and in just our regular clothes, 102 felt like taking a cold shower. Everything is relative.