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Paul Jackson's avatar

Cost plus contracts are the worst possible deal for the taxpayer and the best possible deal for contractors. Cost plus contracts enabled Halliburton and its subsidiaries to defraud American taxpayers out of hundreds of billions of dollars during Iraq 2.0 and Afghanistan. This type of contract does not provide any incentive to cut costs but just the opposite. The more the contractor bills, the greater the percentage they can add on to generate profit. For instance the contract may stipulate that for the first 100 million the contract may add 10%, for the next 50 million they may add 15%, for the next million they may add 20%. And they will most certainly do that by incurring unnecessary costs and by fraudulent billing. This has to be stopped and cost plus contracts should be made illegal.

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