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http://www.fool.com/investing/general/2011/03/18/defense-cut...

The article above highlights a new strategy being tried out by defense contractors: a sidewalk sale

With rumors perpetually swirling about cutbacks on specific projects (expecially those related to combat vehicles), some defense contractors have declared a blue light special -- slashing prices to entice the DoD to buy. It seems to be working.

And because these contracts are fixed price, the profit potential falls squarely on the shoulders of the contractor: cut costs, deliver on time, and you may still earn a pretty decent margin. Let costs and delays spiral, and these sale contracts will turn out to be a ton of work for very little -- or negative -- reward.

Nevertheless, the shift is interesting.

I suspect we'll see even more focus on cost control/elimination programs than we have over the past few years.

Bryan
TMF42
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