Final answer:
In high-cost defense contracts, competitive bidding is scarce because the risks associated with fixed pricing are too great for contractors to shoulder. The complexities of national security and defense technologies lead to unpredictability in costs, justifying the government's role in overseeing and funding defense as a critical public good that cannot be provided efficiently by private enterprises.
Step-by-step explanation:
In certain high-cost defense contracts involving new weapons and equipment, contracts are rarely subject to competitive bidding because no contractor is willing to assume all the risk of receiving a fixed price for the contract. This is due to the high uncertainty and complexity associated with developing state-of-the-art defense technology, which can lead to unforeseen costs and challenges. As defense contracts entail the production of public goods such as national security that are nonexcludable and therefore cannot be efficiently charged for by private companies, the government steps in to fund and oversee these projects.
The government relies on defense companies to provide national security, which private businesses find difficult to produce because they typically cannot exclude non-payers from enjoying their benefits. As such, the production of public goods like national security requires the financial backing and the directive capabilities of the state, not only due to the nonexcludable nature of the services provided but also because of the immense resources and coordination required for such large-scale endeavors. This conclusively answers the student's question, "In certain high-cost defense contracts involving new weapons and equipment, contracts are rarely subject to competitive bidding because no contractor is willing to assume all the risk of receiving a fixed price for the contract".