These have grown fat on cost-plus contracts that have given them little incentive to innovate.

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"The overuse of cost-plus contracts, high contractor overhead expenses, excessive contractor award fees, and unacceptable program and project delays all contributed to a significant waste of taxpayers' dollars, " the report said.

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Employer-clients like Boeing, Citigroup, Pfizer and Microsoft sign contracts in which they agree to pay everything from construction costs to ongoing maintenance in return for on-site child care services for their employees' children. (Often, these employer "sponsors" will also subsidize the parents' tuition.) Under certain "cost-plus" contracts, the employer-sponsors will even shoulder some of the care center's risk in exchange for more control of the operations.

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SRA's criticisms of lax management of cost-plus maintenance contracts.

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It's worked out so well that today only 20% of Rockwell's defense contracts are cost-plus deals.

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Since contracts are on a cost-plus basis, profits are built in.

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Since contracts are on a cost-plus basis, profits are built-in.

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