How did cost-plus contracts help the US prepare for war?

Answer 1

Cost-plus contracts helped the U.S. prepare for war by providing manufacturers with a guaranteed profit margin on production costs, incentivizing rapid and increased output of military supplies. This approach reduced financial risk for companies, encouraging them to invest in expanding their capacity and workforce. Consequently, it enabled the rapid mobilization of resources and ensured the timely delivery of vital equipment and materials needed for wartime efforts. Ultimately, cost-plus contracts played a crucial role in enhancing the efficiency and scale of wartime production.