In Certain High-Cost Defense Contracts Involving New Weapons and Equipment

question 133

Multiple Choice

In certain high-cost defense contracts involving new weapons and equipment, contracts are rarely subject to competitive bidding because ________.

• A) the government taxes the defense companies at a higher level than that of other public sector companies
• B) there is an implicit agreement among defense contractors to "share contracts"
• C) all defense contractors have essentially the same cost structure
• D) no contractor is willing to assume all the risk of receiving a fixed price for the contract

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