> I don't want to sound like an NSF apologist, but I think it's an
> oversimplification to say that they guaranteed NSI a profit in the
> cooperative agreement. NSF could not have predicted the future, where
> domain name registrations would take off as a result of the popularity of
> the web.
Cost+fee means that the contractor gets from the goverment two things:
- Reimbursement for costs (lots of accounting issues as to
what constitute "costs")
- A fee
Most folks would call that fee a "profit".
The original cooperative agreement was a cost+fee agreement.
The only risk involved is if NSI were to incur expenses that the
accounting rules did not allow as "costs". This would tend to be things
like buying expensive real estate, etc.
It was exactly because the difficulty of predicting the future workload
that that this kind of cost+fee arrangement is used.
Guaranteed profit is not an uncommon thing in aerospace and other
quasi-scientific kinds of contexts.
--karl--
