> 1. Predictable income / expenses for each party, many defense projects are cut at the whim of politicians.
> 3. Your 1 customer argument falls apart as soon as you talk about per-seat pricing. The US mil can buy more or less seats as the size of the force changes or is reallocated. It also sets Lockheed up to charge for drone connectivity. The military benefits because they could opt not to buy more if it doesn't turn out well.
Either they have predictable revenue or the government can cut seats whenever they want. How can it be both?
And for the same reason it doesn't solve the 1 customer problem. If the Marines want something and nobody else does, the contractor has to be charging enough to not go out of business even while only selling it to the Marines. So the rate per seat has to be unreasonably high, which is bad when they're only selling it to the Marines, but even worse if the whole government wants it and they're still paying the same rate.
> Either they have predictable revenue or the government can cut seats whenever they want.
Say the government agrees to buy 200 planes, so the manufacturer prices the planes in a way that they recoup their development cost (which can be many many billions of dollars), and in the midst of the contract the government decides to say "we don't need more planes" and the manufacturer is screwed.
With "plane as a service" however, should politicians decide to cut delivery of more planes, they can at least recoup their cost with the license fees that apply during the plane's usable life time - it's not like the US government will suddenly go to Eurofighter, and it's not like that there will be much US-based competition in building fighter planes.
In the end there are two problems, the one being that the US government has gone down the drain regarding reliability with multiple shutdowns and a barely avoided default in the last decades and a re-allocation of military budgets looming around the corner, and the other being that there's zero competition to Boeing and Lockheed left so these two companies can milk the government at will.
> With "plane as a service" however, should politicians decide to cut delivery of more planes, they can at least recoup their cost with the license fees that apply during the plane's usable life time - it's not like the US government will suddenly go to Eurofighter, and it's not like that there will be much US-based competition in building fighter planes.
How does that solve it? If they can charge high enough service fees against 200 planes to recoup their costs then either the license fees aren't fixed per-plane -- in which case the government is effectively prepaying for the lot of them regardless of whether they're any good -- or they are, and then the government is getting soaked in both cases.
> the one being that the US government has gone down the drain regarding reliability with multiple shutdowns and a barely avoided default in the last decades
This was never an actual problem, it's just political posturing. They're not going to default. They just find it politically useful hold out until the last minute. And when a budget ultimately gets passed the contractors get paid.
> the other being that there's zero competition to Boeing and Lockheed left so these two companies can milk the government at will.
This is the actual problem. They should both break these companies up and make it easier for other companies to bid on government contracts.
> 1. Predictable income / expenses for each party, many defense projects are cut at the whim of politicians.
> 3. Your 1 customer argument falls apart as soon as you talk about per-seat pricing. The US mil can buy more or less seats as the size of the force changes or is reallocated. It also sets Lockheed up to charge for drone connectivity. The military benefits because they could opt not to buy more if it doesn't turn out well.
Either they have predictable revenue or the government can cut seats whenever they want. How can it be both?
And for the same reason it doesn't solve the 1 customer problem. If the Marines want something and nobody else does, the contractor has to be charging enough to not go out of business even while only selling it to the Marines. So the rate per seat has to be unreasonably high, which is bad when they're only selling it to the Marines, but even worse if the whole government wants it and they're still paying the same rate.