Not true. The government will award contracts if there is very little to lose. In this case, there is little to lose and a lot to gain. Tempus is expected to do the fixing planes, etc, so the $10 mil is worth it.
On the other hand, Tempus will only do all this labor for a measly $10 mil if they are also awarded the $490 mil flying saucer clause. This clause gives Tempus pumping power while the government gets work done for cheap.
Finally, if Tempus actually does build the lightning fast flying saucer, then $500 mil is real cheap.
To summarize, Tempus does the reasonable work at a discount in exchange for an incentive-based bonus that will be used to pump the contract to its investors. The government gets work done cheap and loses nothing by putting in the bonus.
The spreadsheet looks like this: Tempus does work for the government. They don't do a very good job, so the government does not give them all the money, but the investors give Tempus a small fraction of what's unpaid from the contract.
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