DOD focused on lower costs, not profit margins, Assad asserts

The Defense Department isn’t concerned with contractors’ profit margins, but is focused on reducing its own costs, Federal Times reported on Nov. 30.

Shay Assad, director of defense pricing and adviser to the undersecretary of defense for acquisition, technology and logistics, went so far as to say he didn’t expect profit margins to fall even in these times of budget tightening.

“It wouldn’t bother us at all if operating margins go up, so long as we’re paying less,” he said, according to the report.

Reader Comments

Fri, Dec 2, 2011 Don O'Neill

When it comes to large-scale software-intensive programs, it is time to move from aspirational slogans to a disruptive game changer to bring the defense industry into line with the needs of the Department of Defense. The government understands what it needs. Yet industry is not hearing the message. It is time to alter this dynamic by addressing the challenges of competition, innovation, and fixed price contracting in shifting from an expectation of compliance to one of leadership.

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