I wonder if these egregious examples of expenses are due to lack of controls or intentional corruption.
> "We are reviewing the report, which appears to be based on an inapt comparison of the prices paid for parts that meet aircraft and contract specifications and designs versus basic commercial items that would not be qualified or approved for use on the C-17," the Boeing spokesperson sought to explain in a statement.
I was thinking that it would make sense in future contracts to try to define a class of parts that are allowed to be 'unapproved' by the manufacturer and still be used, but then I tried to think of what all those parts would be and it doesn't seem like it would be that large of a list of items. I wonder if the juice isn't worth the squeeze to try to prevent this. What a strange world.
[1] https://www.reddit.com/gallery/1al24h7 (images #9 and #10)
Only a few months ago we saw an example of a intelligence agency implanting and blowing up bombs in equipment
$72 soap dispensers
$140000 knowing where to put them
This is the problem--the government heavily regulates (which the big contractors encourage) all the parts and suppliers until Boeing becomes the sole-source supplier and can charge arbitrary prices. There is a reason for it at times, i.e. to answer does someone die if this part fails or can we just stock a few spares? But obviously many many things being vastly over-specced most of the time.
If you ask Boeing for soap dispenser parts for these, what should they cost? Boeing charged $149,072 for the dispensers. That's $671 per plane. Is that too much?
If you had to make these dispensers, make sure they conform to rules for aircraft parts and Air Force parts, provide formal responses to bids, etc., how much could you make them for?
It seems high to me. The article says 8000%, which is less than $10 per plane. So while it seems high, it's definitely not 8000% high.
It's possible the soap dispenser is to the left of the sink and just hidden by the angle.
We can chose to alter how we procure, but there are good reasons why the system is as it is, so a careful effort to understand why it is like it is before we reform must be undertaken.
Chesterton's Fence applies here for sure.
Why not just use existing solutions like a soap dispenser that is found on common commercial passenger planes that Boeing already has and makes?
There is no world where a simple soap dispenser is $150k.
They seemingly design them like this so they can bilk the US government aka tax payers with these absurd prices for simple objects.
Now, like you said... the root cause here is probably some absurd spec that prevents them from using some existing commercial soap dispenser whose costs have already been amortized.
Then again, maybe the spec isn't absurd. The C-17 may need to fly in contested airspace. Maybe damage control is a concern. Maybe they can't use commercial soap dispensers because they're plastic and they don't want the plane to fill up with toxic fumes from burning plastic. That is a random guess. I have no idea.
I couldn't find pictures of the soap dispenser, but here's apparently a urinal from some version of the Globemaster. I get the feeling these parts are kinda custom... https://www.flickr.com/photos/morganone/122375474/in/photost...
Which one? Whichever you pick you need to stock that exact same one for the next 50 to 100 years. By the time you finish exactly defining it, you are back where you started.
(Also it's not 150k each - that's the price for the entire fleet.)
This one from CB2 is $40 and it doesn't conform to FAA rules and it's not MIL-SPEC. [1]
I suspect if I wanted a limited run of soap dispensers, I was only willing to buy 300 made-to-order, tested and conformant to niche military specifications and aviation specifications, I'd probably end up paying a decent chunk more than CB2.
How much does the entertainment system in your car cost vs an iPad? Is that a rip-off, or is it a niche, custom part that has to be made from automotive grade components?
How much does the soap dispenser cost in a 777 bathroom? That's the real point of comparison, not CB2.
[1] https://www.cb2.com/ramsey-calacatta-gold-marble-soap-pump/s...
But for some reason Boeing continually gets away with being Boeing for some reason.
Is that not what's happening here?
And sometimes they are appropriately specced.... for 1951, and no-one bothered to update the spec. They just ask for more of part 46-18432, please, and since the spec becomes more and more outdated, it becomes harder and more expensive to provide a part to that spec.
The first year you learn how hard it is, you spend 80% of your time on compliance documentation and 80% of your budget on tooling. You still don't have a satisfactory product or a mastery of filling out the forms. It drags on into the second year, you're living on ramen but eventually deliver it (if there's one thing the government procurement process is tolerant of, it's delays) and get paid.
The third year you take on a additional contract, for 200 toilet flushes or whatever. New manufacturing challenges, but at least you're getting the paperwork down.
After a few more jobs, you've cracked it. You start bidding for all the military's bathroom-related contracts. At five or six contracts a year, you have a million or two rolling in (and low manufacturing costs - remember, the spec is such that you can produce it for 80x lower) and you've hired five employees.
By year five, the only thing you care about improving is sales. You still have 5 machine shop staff, paid well but not enough to make them wealthy. You focus on hiring ex-military brass and making them sales reps and lobbyists. You're into tens of millions of revenue, that is, profit.
Year 8, you sell the thing to Northrop or to a private equity firm and go retire on an island.
One can make ridiculous arguments about both values and costs if one goes to extremes. It is instructive to study actual modern warfare. Sophisticated weapons only matter if there is a sufficient number. Meat attacks only work if weapons are of sufficient quality. Neither is one of the extremes.
Fair enough, but I was referencing people taking a Boeing exec’s claim that somehow regulations cause military soap dispensers to cost that much at face value.
> I assume you talk about the government here?
No. Read the whole sentence. I’m referencing Boeing and the tens of billions Boeing has lost on fixed price contracts.
[edit] Here you go, just under $845. I present you the Labrazel Discus Brown Pump Dispenser available at Nieman's. Only $77 per month thanks to the magic of Affirm. Good news is thanks to Black Friday you get a $125 gift card. Still not MIL-SPEC though.
https://www.neimanmarcus.com/p/labrazel-discus-brown-pump-di...
Those procedures do not happen because generals retire into cushy barely-show jobs at defense contractors
Congress does not dare force the US military to do any of the above because the US military is a giant pork barrel welfare program for red states, especially the midwestern ones, feeding them endless useless manufacturing work and keeping all their unskilled-labor high school graduates out of unemployment - sending them into the military where they learn some semblance of how to be an adult and some skills
I've written about this here some time ago - you don't pay for the soap dispenser or trash bin itself, you pay for the paperwork showing that it is safe to install this trash bin, soap dispenser or whatnot into this specific model of aircraft or spacecraft, and you pay for the paperwork that details the entire life of every tiny little piece used to manufacture that component. For flight-critical parts, IIRC that goes as far as to documenting the specific lot of the iron ore that was used to make the metal sheets, so in the event of something cropping up where something got fucked up in the mine or the smelter, you can recall every single part that could be affected. And there's lots of testing (and associated waste) at each part of the step.
Anything that goes into an airplane or spacecraft has ridiculous rules attached to it... rules that were literally written in blood. Aerospace is amongst the safest ways of transportation because of decades of crashes and learning from each and every single one.
Your average Home Depot soap dispenser has none of that, if it breaks it breaks.
Though you might want to also take on some non-government contracts, both to keep everyone busy in between government contract demands on their roles, and to reduce the risk of having "only one customer".
Maybe the Pentagon should check these guys out.
MILSPEC is a thing - but unless the soap dispenser involves electronics, I don't think that applies here.
(If someone had bought an IoT enabled soap dispenser for a military plane, that would have been their own stupidity.)
You also wrong about where the money goes. It mostly goes to coastal states (and DC). The Midwest gets less money from those contracts than most states: https://www.pewtrusts.org/en/research-and-analysis/articles/...
Surely there's a more cost-effective happy medium somewhere between "just buy the Home Depot 2-for-1 special" and "we ran a background check on the guy who mined the metal"
It's fraud. Both on the part of Boeing and on the part of whoever in government approved that.
800x markup doesn't just happen. You can sneak 10% or 20% surcharge but 800x is so obvious that it's only possible because everyone involved is in on the grift.
It's not a surprise to anyone at the Air Force, they just been getting away with this for so long that they don't even care to hide it. The corruption has been normalized.
Which is why Democrat's obsession with rising taxes and the "pay your fair share" rhetoric pisses me off so much.
Let's start by eliminating 800x waste, 100x waste, 20x waste, 10x waste, 5x waste, 2x waste from government spending and then let's how much money we need to run government. I suspect it would be much less than what US currently takes in taxes.
Isn't it 80x? Title says 8000%
Where can we see this literal blood writings?
Them revolving doors need to keep turning to line your own bank account.
A better solution than hiring people to watch for literal scams is to simply not scam people and hold them liable when they're found to have done so.
Your logic is the same as thieves who say, "It's not my fault that I stole their wallet. They should've put it in a slash-proof backpack and locked it with a combination lock that isn't easily picked." Sure, some degree of security and caution is good. But not defending criminal behavior is better.
20 years ago, Boeing had a good reputation. Now it's known as a company that'll pick your pockets and kill you. Quite a downfall.
Depends on the failure mode. Assume the screws with which the soap dispenser is installed are spec'd to wrong torque and the installation causes stress fractures as a result that end up propagating through the aircraft...
Yes it sounds far-fetched, but aircrafts have crashed due to microfractures caused by improper torques on other components...
There's no excuse for this. There should be a watchdog group in the federal government, staffed with people who make .01% commission on every dollar of waste they find and eliminate on shit like this.
The very second you start making an exception because "a soap dispenser is trivial", other stuff will get labeled as exempt (or treated as such), eventually there will be no one knowing what is exempt and what is not, and someone will treat something as exempt that clearly shouldn't have been exempt, causing an incident.
In aircraft and spacecraft design and manufacture, the rule is "safety by design". Treating everything as "needs to be certified by default" is fail-safe, it eliminates entire classes of incident causes.
If a piece of military hardware or software fails, one or two or a dozen people die... if they can't eject.
If a piece of civilian hardware or software fails, hundreds of people die. Witness the 737 Max.
The breakdown of the barrier between the military and commercial sides of Boeing has resulted in a catastrophic reduction in quality on the civilian side. So overcharging for soap dispensers on the military side is far more egregious than overcharging for them on the civilian side, because the stakes are actually lower.
You can't say it's a niche part when the item is being manufactured in the hundreds of thousands or even millions. Car companies reuse components between models and sometimes even between brands.
And that's without mentioning that the average 7-8" screen or CPU in a car's entertainment system isn't a custom made part, they are bought at bulk from other manufacturers that produce (tens of) millions of units per year.
You can find entertainment system replacements for most cars that cost a fraction of what the car manufacturer charges consumers.
I struggle to see how a mass-produced, way more expensive (for the customer), lower-quality product isn't simply a rip-off.
I'd actually disagree there. The stakes for military aircraft are higher - assume Russia or China sends a nuclear bomb equipped squad on their merry way to Alaska.
If even one of the US planes has an issue taking it out of the fight, the Russian bomber squad may succeed, dropping a nuke and killing tens of thousands of people.
In fact, Boeing has stated they will no longer bid for fixed price contracts at all. They are institutionally incapable of making money by simply selling a product to the government for a price agreed to up front. Other companies can, but Boeing cannot. It's a rotten company.
https://arstechnica.com/space/2023/10/boeing-says-it-cant-ma...
Cost-plus contracts should be emergency measures for wartime only. They should be illegal otherwise. They hurt our country, not just by getting the government scammed by greedy corporations, but also by ruining companies like Boeing that should otherwise be competent and valuable assets to the country.
You'd still need to pay for the certification and audit trail paperwork, and in addition you'd take a part that has already been certified and replace it by a new one that would need to undergo the same certification requirement.
> weight is the enemy, the other is simplicity, : if its not there, it costs nothing, and cant break
Indeed but then you get crews taking their own soaps because they (think they) need to have soap aboard, store them wherever it is convenient for them, and the soap bar then gets loose and flies during the cockpit during a mission because no one thought about securing the soap as it isn't on any checklist.
That is also the reason why even brand new airplanes rolling off the factory line still have ashtrays in lavatories despite smoking being banned for decades now. They account for some dumbass thinking they do need to smoke and better they drop the cigarette in the ashtray (because that's what people do naturally) when the fire alarm goes off, than they dump it in the trash bin, causing the cigarette to set the trash alight and causing a bigger issue.
That is "fail-safe by design". Even if it adds 100 grams per plane to have that ashtray and a bit of work for the attendants to check if it needs to be cleaned out and for the pilots and maintenance crew a bit of work in the MEL check, it is still worth it over losing an aircraft due to a trash bin fire (and yes, that still happens, see the source for this quote!):
> As with just about everything on a plane, it's about safety. "They're there so if someone were to break the rules, they would dispose of the cigarette in the ashtray as opposed to, say, a trash bin full of flammables," says Robert Antolin, chief operating officer at App in the Air. [1]
[1] https://www.travelandleisure.com/why-airplanes-have-ashtrays...
This might not be a fair comparison, since Boeing also makes the ones for commercial customers, and probably overcharges them also.
> This one from CB2 is $40 and it doesn't conform to FAA rules and it's not MIL-SPEC.
People talk about MIL-SPEC like its some unattainable gold-standard. I can buy a MIL-SPEC rated Thinkpad from Lenovo for less than $600. I mean, sure, it doesn't dispense soap...
When someone gets tricked in a shell game, is it fine because they voluntarily bought into it? Would you legalize such schemes? Of course any scam (short of outright extortion and robbery) relies on the victim to voluntarily hand over money. We could take a social Darwinist approach to business and say any way you gain an advantage is legitimate as long as it's not by physical force. But obviously something nefarious is going on here, because no one would knowingly overpay by that much for no apparent benefit. It's likely kickbacks were involved. This is fraud, they're stealing taxpayer funds.
Granted 8000% is still absurd, but 1000% wouldn't necessarily be unrealistic.
What really makes me livid is that the same people who are in here now screeching about Boeing's misdeeds with no thought given to mitigating facts would instantly grasp the concept of paying for a paper trail and happily use it as justification to crucify some puddle jumping airline operator in Alaska who sourced unapproved stuff.
Feeling entitled to engage in cognitive dissonance like that when it benefits you plays a key role of so many problems in society these days, including shoddy work and overpriced soap dispensers at Boeing
That said, I still think $600 is absurd. The .mil probably already has a soap dispenser thats sufficient that Boeing could have made a mount for.
Compare the cost of a MIL-SPEC ThinkPad with that of an actual flight control computer designed to be an integral part of an aircraft's avionics.
The analogy here would be hiring a software consulting firm to make every little one-line-of-code change to your website, instead of just having a full-time in-house developer who could make small one-time changes and maintenance at no additional cost.
There are also various levels of auditors within the organisation, some of whose reports are used as inputs for the IG and GAO.
The idea that Boeing of all organizations is too consistent about adhering to rules written in blood given the 737 MAX debacle and the "whistleblowers falling out of windows" issue is also darkly comical.
"Whoops sometimes our windows fall off mid flight but trust me bro, this soap dispenser is a fucking disaster waiting to happen"
Occam's razor says this is corruption.
As we've seen from the slight "windows falling off planes mid flight" problem which they furiously tried to cover up, Boeing has a bit of a problem with making exceptions where it actually matters.
A far more likely explanation here isn't that Boeing is being too strict and disciplined over all things up to and including a soap dispenser, but that a bunch of people have their noses in the trough and have figured out a hack to drain money out of the federal government budget.
I know who I blame for wasting the tax dollars, and it isn't the organisation whose raison d'être is making a profit on selling goods. I don't blame the lion for eating the gazelle either.
(Admittedly the actual article has a more balanced tone).
I wasn't trying to cover all that, I was just pointing out that MIL-SPEC is a very wide category and therefore effectively meaningless unless you're pointing out what type of application it is.
> The DoD OIG found that overpayment occurred because the Air Force did not:
> Validate the accuracy of data used for contract negotiation.
> Conduct contract surveillance to identify price increases during contract execution.
> Review invoices to determine fair and reasonable prices before payment.
> In addition, the DoD OIG found that the DoD did not require the contracting officer to verify the accuracy of the bill of materials before negotiation or to review invoices for allowable, allocable, and reasonable costs before payment.
This does not sound like expensive MilSpec. Wouldn’t it be fair to assume that the DoD Inspector General is aware of these before making such accusations?
[1] https://www.dodig.mil/reports.html/Article/3948601/audit-of-...
[2] https://www.dodig.mil/In-the-Spotlight/Article/3948604/press...
Sadly I didn't get much of a payday out of it.
It was screws, maybe? According to the U.S. attorney, the company “grossly inflated prices intentionally”, although according to mschuster91 people just don't understand the level of paperwork needed to create these $37 screws and $600 toilet seats.
It would almost certainly be cheaper and more effective to do it in house. But instead, in-house capabilities are continually decreasing. The actual government agencies are reduced to supervisory roles.
Stories like this usually result in even more hatred for government employees and more outsourcing.
(Note that just because "crime" can be used as both a count noun and a mass noun doesn't mean "grift" can be! Most nouns are just one or the other, not both. Like Wiktionary has "crime" as both but "grift" as count only. But it seems like this new uncountable sense of "grift" is out there now, so people will have to update the dictionaries...)
Why blame Boeing for this? They just made an offer and someone took it.
However, there are diminishing returns at some point. If you want to go after, let's say, the 99th percentile within which things like soap dispensers might fall, you may have to spend more in admin costs than you get back in savings.
This applies to both needing more staff and needing to add more paperwork, which also in turn can slow down projects.
This DoD IG report, for instance, faults the US Air Force for not having built a database that tracked historical prices and tracked equivalent COTS part prices on various commercial marketplaces. That means either having staff or (more usually) paying some third party contractor to maintain a database and constantly update it to track all of these commercially available products. At some level you can end up spending more than you save.
That's why in corporate audits there's always a threshold floor below which external auditors don't bother to check further. It's considered an acceptable risk.
Also, there's a human aspect here. Doubt any air force officer wants to be the one to approve a COTS replacement for something like this only to have something go wrong on a flight because of some or other unexpected failure.