<p><BR/>Replying to:<BR/><DIV CLASS='Discussion_PostQuote'>The "who paid them for their efforts" is actually the part I was referring to. Don't overlook the cost of retaining employees. You have to fund them full-time if you want them to stay. Now, you can try to shuffle some of them on to other programs temporarily while you look for a funding source for their old project, but you're not going to be able to reshuffle them all. Not unless you managed to win a similarly large contract at just the right time. So what will you do to with the remainder? You can put them on internal R&D programs, or you can let them go. Those are basically your choices. Few companies are willing to put for that kind of R&D funding just to keep a bunch of staff busy for the years it will take for you to find a new customer for this huge and highly specialized rocket engine.SOP in the industry is to lay off a whole bunch of them, I'm afraid.I found the article I was thinking of. It's not quite what I was thinking about; I read the article a couple of years ago. But he does criticize industry for thinking in the very near term, which is the root cause for why industry won't invest in knowledge retention -- it has no short-term payoff.Donald Winter, Secretary of the Navy, addresses the Sea Air Space Exposition, April 2006 <br />Posted by CalliArcale</DIV></p><p>If you are referring to the usual IR&D (Independent Research and Development) then contractors need to be a bit more circumspect. IR&D has a specific definition in the FAR and is reimbursible to the contractor through the overhead structure (the amount of reimbursement depends on the mix of fixed price vs reimbursible contracts held by the contractor). But you cannot use IR&D funds just to support people, there must be a project that meets the FAR guidelines, which is basically development of a new product for sale.</p><p>Now, if the contractor is willing to fund a projedt solely out of profits, then the contractor can do whatever he wants. That situation is rather unusual.<br /></p> <div class="Discussion_UserSignature"> </div>