In this episode, hosts DeWayne Allen and Rob Wesley demystify government contracting in aerospace and defense, showing how contract models quietly dictate risk, margins, engineering choices, and cash flow across programs. They walk through firm fixed price, incentive fee, cost-reimbursable, IDIQ, time & materials, and performance-based logistics structures, explaining where each fits and how they shape both business and technical decisions. Using real-world examples from current missile and radar programs, they lay out a practical decision framework for matching contract type to technical maturity, customer risk appetite, and scope clarity—while designing incentives that actually drive performance. They wrap up with emerging trends like outcome-based availability contracts, digital twins, increasing compliance burden, and the rise of COTS and hybrid funding models that every engineer, program manager, and finance leader needs to track.