---
schema: 1
type: term
title: cost-plus
description: >-
  **Cost-plus** describes a contracting arrangement — used in the channel's
  material in the context of defense procurement — in which a buyer (here, the
  government) pays a contractor's costs plus an additional margin, leaving the
  contractor little exposure to cost overruns. Packy McCormick invokes the term
  to say that **Anduril** _takes on cost-plus risk against the defense primes_:
  unlike incumbents operating under such arrangements, Anduril absorbs the cost
  risk itself in order to deliver a better product to government at higher
  margins. [^a8fc1da7-742b-5179-bcd1-e8048b077aad@0]
canonical: 'https://liquidgold.cc/channel/everyinc/explore/term/cost-plus-0d286b542b71'
markdown: 'https://liquidgold.cc/channel/everyinc/explore/term/cost-plus-0d286b542b71.md'
llms: null
parent: 'https://liquidgold.cc/channel/everyinc/llms.txt'
channel: everyinc
updated: '2026-10-23T22:12:35.346Z'
language: null
children: []
---


# cost-plus

Canonical: https://liquidgold.cc/channel/everyinc/explore/term/cost-plus-0d286b542b71

Parent: [Channel index](https://liquidgold.cc/channel/everyinc/llms.txt)

## Definition

**Cost-plus** describes a contracting arrangement — used in the channel's material in the context of defense procurement — in which a buyer (here, the government) pays a contractor's costs plus an additional margin, leaving the contractor little exposure to cost overruns. Packy McCormick invokes the term to say that **Anduril** _takes on cost-plus risk against the defense primes_: unlike incumbents operating under such arrangements, Anduril absorbs the cost risk itself in order to deliver a better product to government at higher margins. [^a8fc1da7-742b-5179-bcd1-e8048b077aad@0]

In this channel's captured material, **cost-plus** appears once — and tellingly, in a single passing phrase. Explaining his **techno-industrial** thesis, Packy McCormick names **Anduril** as his favorite example: smaller, cheaper, software-infused hardware that *'takes on cost-plus risk against the defense primes, delivering a better product to government'*. [^a8fc1da7-742b-5179-bcd1-e8048b077aad@0]The framing matters. If the traditional **defense primes** operate under a cost-plus arrangement — where the buyer covers the contractor's costs and adds a profit margin — then the contractor carries little cost risk. Packy's point is that Anduril does the opposite: by *taking on* that risk itself, it can deliver **better, cheaper** products while keeping the upside of higher margins — margins it then reinvests into R&D and growth. That risk-shift is part of what makes a company **techno-industrial** rather than deep tech in his taxonomy.Note what the material does *not* say: it never spells out the contract mechanics or gives a worked example of a cost-plus contract. The term functions here as shorthand the audience is expected to roughly grasp, used to sharpen a contrast between incumbents and Anduril. Treat it as a contextual clue within the techno-industrial argument, not a full treatment of government procurement.\\**Cost-plus** appears in a single phrase about Anduril: it *takes on cost-plus risk against the defense primes*.\\The term evokes a contracting model where the buyer covers costs plus a profit — meaning incumbents bear little cost risk.\\Anduril's move is to **absorb that risk itself**, delivering better products to government at higher margins.\\The usage is shorthand inside the **techno-industrial** thesis; the material doesn't elaborate the contract mechanics.\\