Boeing CFO Says Pentagon Will Get Exactly What It Ordered, Nothing MoreApril 01, 2011
 The aerospace company's chief financial officer, James Bell, told analysts that Boeing will stick to the exact requirements in the bid, mainly because of the type of contract the government offered, according to an article in The Washington Post. The austere economic environment has led the government to offer a fixed-cost contract — a contract that stipulates a fixed price no matter what additional costs the manufacturer may incur. In the past, the Pentagon has offered cost-plus contracts, which are more palatable to companies because it allowed them to pass on the extra costs that they might incur during development and production. "We are going to be very, very disciplined in managing the statement of work and the requirements," said Bell. The tendency is to try to improve the product during development as a company sees ways to make it better. "You want to do things differently, but today's contracting environment with the government will prevent that from happening." Despite the type of contract, Bell said he expects Boeing to make a profit on the deal. The company won the $35 billion contract after a nearly decade-long bidding process that was mired in controversy. |
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