The Army and Economic Mobilization

By R. Elberton Smith | Go to book overview

CHAPTER XII The Cost-Plus-A-Fixed-Fee Contract

Background and Nature

One of the most controversial features of procurement operations in World War II was the widely used cost-plus-a-fixed-fee form of contract.1 Army commitments under all types of CPFF contract for that war exceeded $50 billion and amounted to nearly one third of all Army purchases. The nature and implications of the CPFF contract were widely misunderstood throughout the war, partly because of the complexities of the pricing problem and partly because of general ignorance of the many specific types of CPFF contract and the procedures set up for their administration and control. A review of the War Department's experience with CPFF contracts reveals the heart of the problem of contracting and pricing for wartime procurement and prorides the foundation for an understanding of all wartime pricing methods, renegotiation activities, contract administration, and other facets of the total procurement problem.

The CPFF form of contract had been used in World War I but received far less publicity than the cost-plus-a-percentage- of-cost type of contract, which subsequently became the target of much investigation and criticism. World War I experience had revealed the extravagance and waste resulting from CPPC contracts, which rewarded producers in direct proportion to the money they spent in performing their contracts. Moreover, all cost-plus forms of contract came under heavy suspicion because they failed to provide a firm ceiling upon costs or expenditures. A fairly common sentiment in Congress and elsewhere on the eve of World War II might be summed up in the words: "Why not make the contractor quote a reasonable price and hold him to it?" fortunately, this prescription shed no light on how its laudable objectives were to be obtained, and neither the Congress, the War Department, nor any other authority was able to provide a formula which could. Accordingly, although the CPPC form of contract was outlawed from the beginning of the defense period, the CPFF contract was--upon recommendation by the War and Navy Departments--specifically authorized and permitted throughout the war.

There were many reasons why the Army in the defense and war periods could not have accomplished its procurement mission in the absence of various types of "cost" contract. The equipment and supplies required by the Army for World War II consisted mainly of items which were either completely new or required drastic changes in design and specifications in order to meet the standards and possibilities of modern technological warfare. This was true not

____________________
1
CPFF contracts were often referred to simply as "fixed-fee" contracts.

-280-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this book

This book has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this book

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited page

Bookmark this page
The Army and Economic Mobilization
Table of contents

Table of contents

Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen
/ 749

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.