What was a cost-plus system during world war 2?

Answer 1

It was a way of buying things, equipment and supplies, for the military. Ordinarily, in peace time, the military will issue a notice that it wants certain items, and notify companies in the relevant business that it will accept bids to supply that item. It will allow a certain amount of time for companies to prepare and submit their bid. All other things being equal the government is supposed to accept the offer of the lowest bidder, to buy items at the lowest cost. (Pilots joke about flying aircraft with 35,000 moving parts, each built by the lowest bidder). All of this bid-letting process takes time,and the military in WWII was in a terrific hurry. It needed things yesterday. So for many items the bidding was not done. A company which could produce the desired item was approached, and made an offer (which they really could not refuse) to produce the item on a cost plus basis. This reimbursed the company for all costs of producing the item, materials and labor and so on, and the "plus" part was a percentage added on after the cost was figured, to give the company a profit. This cut out the months of bidding and allowed production to begin immediately.

Answer 2

A government contract to pay a manufacturer the cost to produce and item plus a guaranteed percentage.