Abstract: Government programs are criticized for cost overruns. Information revelation as a new perspective for this issue is proposed. The distortion of the cost information includes two parts: distortion resulted by low powered incentives and distortion resulted by cost padding. Further, a mathematical structure that models institutions through which equipment acquisition activity is guided and coordinated is presented based on the theory of designing economic mechanisms. We use this cost revelation model to discuss what institutions should be created in order to achieve desired goals the revelation of the real cost. The method involves the construction of the relation between the cost type of arm firms and the type of the contracts. The model suggests the general idea that the acquisition side should structure bargaining by providing a series of linear contracts menu so that firms claiming to be lower cost select themselves into contracts where they bear a higher share of risk. According to the contract menu result of the revelation model, all-period control based on target-cost, monitoring of arm firms, advance for competition of arms market are put forward as the equipment cost revelation mechanism.