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Boeing overcharged the U.S. Air Force 8,000% above market for soap dispensers

(www.reuters.com)
152 points lr0 | 2 comments | 21 Nov 24 04:19 UTC | HN request time: 0.001s | source
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cjensen ◴[21 Nov 24 06:40 UTC] No.42201750[source]▶
The US has 222 C-17 Aircraft. A single C-17 costs over $300 million.

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.

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1. myflash13 ◴[21 Nov 24 12:07 UTC] No.42203503[source]▶
Here's an idea: what if the US military just had in-house manufacturing capability and could build soap dispensers (or anything else) to specification at basically the cost of the materials? The factory, the staff, and everything else would be a built-in sunk cost, because they're already in operation.

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.

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2. jfengel ◴[21 Nov 24 17:27 UTC] No.42206552[source]▶
People complain about government employees, and continually insist that private industry can do it better.

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.