That's the thing that's weird to me. If DEFCON had a hard cost limit that they were unwilling to go over, structuring the contract with monthly invoicing based on materials and ongoing labor costs makes no sense. It would seem to me that the only sane way to do this would be to make it a fixed-cost $X contract, and the only monthly (or otherwise periodic) part of it would be to split payments by milestone or by some other rubric.