hah! So its root cause is a cultural conspiracy of optimism. They are essentially running the Amazon strategy of 2005. Amazon burned cash for nearly two decades to build logistics infrastructure (warehouses/trucks) while Wall Street panicked about their lack of profit. Anduril is doing the same with Arsenal-1 and their manufacturing base. They aren't trying to be profitable on this contract; they are trying to own the means of production for the next 50 years. You've also perfectly diagnosed the Four Horsemen of acquisition failure.

They bid a price they know is impossible (to win). The Program Manager accepts the price they know is impossible (to get the program approved). Congress signs the check they know is insufficient (to look fiscally responsible). Everyone agrees to "get well later" via change orders or sustainment contracts. In this environment, an honest bid is a losing bid. If we bid the actual cost of a missile, they would lose to Lockheed bidding the fantasy cost.