Imagine awarding a contract to build a self-driving car. Do you think that contract could be delivered on budget and on time? That’s like every military contract. They’re for bespoke stuff that doesn’t exist in the market. The military looks at what’s out there, adds a bunch of wishlist items, and then puts out a contract for that.
Think about how the private sector develops new products. They don’t award a fixed price contract. They throw a bunch of money at startups. Most of those efforts fail. What is the development cost of every successful product, accounting for those failures? In the military, all the hiccups and restarts and course corrections and dead ends that would kill a startup, and be written off by investors, instead get accounted for in the final cost of the contract.