US military procurement uses a Cost-Plus model where contractors are paid actual costs plus 10-20% margin, which creates perverse incentives to maximize costs, extend timelines, and reduce technology quality.
factualpending
Speaker
Marc AndreessenEvidence Quote
“they purchased via this Cost Plus model um which basically says okay whatever it costs you to build then we'll pay you 10 or 20% more than that... let me just spend as much money as I can building this thing and pay everybody a really fat salary and take our time and have it be long because there's no penalty for it”
Created: 8/11/2026, 6:34:37 AM
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