HN Reader

The issue is the outmoded and excessively specific system of procurement used by the US Military - one more or less mandated by congress.

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.

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.

> “The Air Force needs to establish and implement more effective internal controls to help prevent overpaying for spare parts for the remainder of this contract, which continues through 2031,” said Inspector General Robert Storch.

I wonder if these egregious examples of expenses are due to lack of controls or intentional corruption.

They just need to break down the invoice.

  $72 soap dispensers
  $140000 knowing where to put them

People love those stories.

From https://www.cbsnews.com/news/air-force-overpaid-8000-percent...

> "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.

"The Inspector General also noted it could not determine if the Air Force paid a fair price on $22 million of spare parts because the service did not keep a database of historical prices, obtain supplier quotes or identify commercially similar parts."

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 US military the mightiest fighting force at the time fell in one swoop when the president and command staff all died dud to the unwashed hands of a marine preparing the burgers on Airforce One.“ - Encylopedia Galactica 2424

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.

I thought the deal with all these things is that the unit prices on items don't mean anything, and that they tend to be a negotiated total price (for whatever DoD is buying --- not "soap dispensers" but like "the entire C-17 program for FY2024") that's just weirdly spread over everything, so you end up spending like $15/screw, but everyone knows the actual game.

Is that not what's happening here?

Based on the ole' joke about outfitting custom planes, "If you want to do anything to a plane... /anything/..., it's 250. New coffee machine? 250k. Rotate the sofa? 250k." -- $149,072 for a soap dispenser might well be a screaming deal.

Would like to know the numbers built and how different from a regular airline soap dispenser. If you ask any manufacturer to build something custom made with unusual specs and you buy only 5 pieces, you will get pretty steep quotes vs the nearest approximation on amazon.

It all goes into the GDP I guess

It's interesting that this says "Boeing overcharged" and not "USAF overpaid".

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).

Maybe they are special dispensers that keep working in sudden and unplanned low pressure conditions?

Percentage values in the range of thousands are somewhat pointless. A usual factor, not normalized to 1/100, would be a better fit, but would probably not make such a catchy headline.

Not as much as Musk companies are going to overcharge, the government agencies he now manages...

I hope their stock price goes "boing". Arrogant company, endangering air traffic, leaving astronauts in space...

$600+ is excessive if you are not familiar with the cost of airplane parts and accessories. Add to that cost of compliance (done by humans, the most expensive aviation accessory) and you get that number.

"an inapt comparison of the prices paid for parts that meet military specifications and designs versus basic commercial items that would not be qualified or approved for use on the C-17"

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.

"overcharged" is such an euphemism.

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.

Well yeah, tactical soap dispensers do cost 8000% more than soap dispensers because they have tactical in the name

How much is the “overcharging” in the pharmaceutical and healthcare industries?

I mean.. they are really nice soap dispensers.

It is strange how much apologia there is for Boeing in this thread. Why does it have to be somehow the government’s fault or somehow reflective of the actual cost to make the dispensers? Why should Boeing get the benefit of the doubt, especially given their complete failures on their fixed price contracts (Starliner, Air Force One, KC-46 tanker)? They’re so unable to control costs they’re talking about never taking fixed price contracts ever again. Given those failures, it seems safe to assume they’re screwing taxpayers on their cost plus contracts.

"Dismantle Boeing and the Air Force, immediately"

Hey those were „military grade soap dispensers” those pesky reporters always twist the truth /s.

Anyone knows is just fallout from other investigations, like „hey let’s double check everything from Boeing just in case”.

Excuse the potential tin-foil hat but this be "cooking the books" to mask other purchases that are not suppose to be public eg. secret/top secret projects? 8000% seems obscene even for government billing...