It's a side negotiation that, as I understand, happens through a different process, set down by law. But there's still a process, and contracts have been made by the parties involved, and there's a legally mandated timeline for renegotiating those contracts that is not being followed.
You are right that it is different from how the private sector operates. The private sector does not even let you think about negotiating either their overhead or profit margin.
You are right that it is different from how the private sector operates. The private sector does not even let you think about negotiating either their overhead or profit margin.