Onerous and fantastic regs add a considerable amount.
But in addition to all this, in defense related programs, you get the full support of the firm for the product delivered for the life of the contract - sometimes beyond.
Then there is the phenomenon of contributing costs to contracts that have expired, but on which the government wants work to continue, until such time a new contract, with new terms and requirements, is signed.
Happens all the time.
Defense work is expensive, laborious, time consuming, and most of all, cutting edge.
For the DOD and contractors, the work is such that it is very fluid, as the threat is always changing. Should a war or conflict ensue, you don't want 5-year old technology employed against the enemies’ state of the art technology, do you?
Defense contracts are huge, but so is the amount of work involved in delivering on them.
The $500 toilet seat, or the $1500 hammer, is a straw man. These items are so priced because DOD, DIA, CIA, and NSA (maybe more) are charging for things they don't want you, or, more importantly, the enemy, to know about.
Is there fraud, graft and corruption involved in these things? Most probably. And it should be rooted out, if it exists.
But no matter how you view it, Defense is still, now, and always gonna cost a lot of money.
A lot!
CA....
Good post.
And also the phenomenon of bidding low on the intial contract to win the bid knowing you will “get healthy” on the service parts down the road.