Defence companies have an incentive to bid low when a project will become politically difficult to cancel after enough money has been spent. Limited production volume further encourages firms to recover overhead and profit from a small number of contracts. A government shipyard and an expert naval design staff once provided a direct cost benchmark against private bids. Without that comparator, officials have less leverage to decide whether a yard's price reflects real complexity or opportunistic escalation.
Notable Point · 3:33:41-3:35:49
Defence procurement without an in-house benchmark
Loss of government design and construction capacity weakens the buyer's ability to challenge low initial bids and later cost growth.