Whatever happened to fixed price contracts?

Any normal person or business gets a quotation, or estimate, for work needing to be done. There is a definite contract, however informal, between supplier and customer, often allowing some flexibility in the final price. But the customer knows roughly what he will have to pay.

Governments, however, seem to sign open-ended contracts, so open-ended that there is little come-back for mistakes, delays or over-charging. The current furore over the Affordable Care Act appears to be a good example. I have no idea which contractor messed up, but someone did, and they are not being called to account. The current system is broken everywhere in the Western world.

Epicurus would in all likelihood take a very practical view: the policy of contracting out work to the private sector has not been a success. It has been, in general, neither economical nor efficient. Government should do the work government it is paid to do. If private contractors are used at all, they should deliver for a fixed price and be fined for late delivery and shoddy work. By now only out of touch ideologues should be supporting the subcontracting policy.

One Comment

  1. The amazing and inappropriate use of private contractors is worst in the military. Think Halliburton ( (which sensibly has kept a low profile recently). How come that contractors make profits from killing people? How come a soldier can leave the military one week and next week return at twice his former income to do the same job?

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.