4 ms·

I must respectfully disagree. Boeing is doing EXACTLY the right thing to increase shareholder value. You forget these things are done under Cost Plus contract

I must respectfully disagree. Boeing is doing EXACTLY the right thing to increase shareholder value. You forget these things are done under Cost Plus contracts. You get paid to make something broken. If it is broken, you get to fix it and get paid extra for the fix. If the fix is broken, you get paid again to fix the broken fix. Another example. Having SLS go so spectacularly over budget and so astonishingly behind schedule is one of the most profitable things ever done. Never get it off the ground. Just ensure the project is never canceled. Now I hate to sound like a troll. Or like this is a joke. And maybe it is a joke. BUT IT IS REALITY. The reality we live in. Sorry if it's not what we wish it was. (NOTE: see below a reply indicating this is NOT a cost plus contract)

toomuchtodo 7y ago
So cut their contract and give it to SpaceX instead. Their software engineering practices haven't killed anyone yet, and they've never had to update a vehicle's software mid-mission (to my knowledge).
- jandrese 7y ago
  To be fair, SpaceX hasn't had any manned flights yet so it's a bit unfair to say that they have not killed anyone. However, at this point I trust SpaceX software more than Boeing software.
  - deleted 7y ago
    [deleted]
  - avmich 7y ago
    To be fair, neither Boeing had any manned flights. I mean, the bulk of engineers and managers currently in Boeing didn't participate in creating the last manned spacecraft Boeing worked on, so the company history is rather irrelevant. It's similar to say Russia (actually, USSR) has created, say, TKS (with an arguably better returning manned capsule than Soyuz), Buran (with cutting edge automated capabilities), VEGA (a pretty successful interplanetary robot) therefore Russia has an edge today in these areas.
    - jandrese 7y ago
      Unless the company is unusually balkanized the management factors affect everybody. If a company has bad management at the top it affects all of the divisions.
jandrese 7y ago
> Boeing is doing EXACTLY the right thing to increase shareholder value. Boeing stock is down 25% since this time last year. This would seem to be a failure to increase shareholder value.
- DannyB2 7y ago
  Maybe this profit strategy / tragedy has a limited lifetime at which point you pull the golden parachute.
ceejayoz 7y ago
Commercial Crew is explicitly not a cost-plus contract.
- DannyB2 7y ago
  Thank you for pointing that out. I wasn't aware of that. I suppose there is another similarly pessimistic answer.
bdavis__ 7y ago
Companies don't like cost plus. The amount of profit is limited, and the govt has total access to all book keeping. In addition, the govt program doesn't have an unlimited budget. They have some 'management reserve' that can be added to a cost plus contract when the initial funding is consumed. When that is gone, it is a big problem. Companies like Firm Fixed price. Possibility to bring in more than a 5 or 6% profit.
- ceejayoz 7y ago
  The JWST serves as a pretty good counterpoint to this argument. Initial budget $0.5B. Current budget: $10.0B.
  - bdavis__ 7y ago
    I am sure there are exceptions. Let me try to add some clarity, from my work experience. Cost Plus work is only done when there is risk. It is monitored on a cost and schedule basis by the customer (govt). At certain cost milestones, there is a decision to stop, add more money, change requirements; deal with reality after more has been learned about the problem. It is agile to the extreme (from the development lifecycle perspective). As a government contractor it is extremely bad for business to not deliver on a cost plus contract (meaning your customer has exhausted his budget; not what he originally OK'd you starting with). In this case the contractor can not finish the work and take a loss, as that is against the FAR. What happens is the customer is stuck and, in general, they remember. Now, if you are the only game in town, perhaps it is a way to force the govt to throw you more cash. Most contracts are not like this.

toomuchtodo 7y ago

So cut their contract and give it to SpaceX instead. Their software engineering practices haven't killed anyone yet, and they've never had to update a vehicle's software mid-mission (to my knowledge).

jandrese 7y ago
To be fair, SpaceX hasn't had any manned flights yet so it's a bit unfair to say that they have not killed anyone. However, at this point I trust SpaceX software more than Boeing software.
- deleted 7y ago
  [deleted]
- avmich 7y ago
  To be fair, neither Boeing had any manned flights. I mean, the bulk of engineers and managers currently in Boeing didn't participate in creating the last manned spacecraft Boeing worked on, so the company history is rather irrelevant. It's similar to say Russia (actually, USSR) has created, say, TKS (with an arguably better returning manned capsule than Soyuz), Buran (with cutting edge automated capabilities), VEGA (a pretty successful interplanetary robot) therefore Russia has an edge today in these areas.
  - jandrese 7y ago
    Unless the company is unusually balkanized the management factors affect everybody. If a company has bad management at the top it affects all of the divisions.

jandrese 7y ago

> Boeing is doing EXACTLY the right thing to increase shareholder value. Boeing stock is down 25% since this time last year. This would seem to be a failure to increase shareholder value.

DannyB2 7y ago
Maybe this profit strategy / tragedy has a limited lifetime at which point you pull the golden parachute.

ceejayoz 7y ago

Commercial Crew is explicitly not a cost-plus contract.

DannyB2 7y ago
Thank you for pointing that out. I wasn't aware of that. I suppose there is another similarly pessimistic answer.

bdavis__ 7y ago

Companies don't like cost plus. The amount of profit is limited, and the govt has total access to all book keeping. In addition, the govt program doesn't have an unlimited budget. They have some 'management reserve' that can be added to a cost plus contract when the initial funding is consumed. When that is gone, it is a big problem. Companies like Firm Fixed price. Possibility to bring in more than a 5 or 6% profit.

ceejayoz 7y ago
The JWST serves as a pretty good counterpoint to this argument. Initial budget $0.5B. Current budget: $10.0B.
- bdavis__ 7y ago
  I am sure there are exceptions. Let me try to add some clarity, from my work experience. Cost Plus work is only done when there is risk. It is monitored on a cost and schedule basis by the customer (govt). At certain cost milestones, there is a decision to stop, add more money, change requirements; deal with reality after more has been learned about the problem. It is agile to the extreme (from the development lifecycle perspective). As a government contractor it is extremely bad for business to not deliver on a cost plus contract (meaning your customer has exhausted his budget; not what he originally OK'd you starting with). In this case the contractor can not finish the work and take a loss, as that is against the FAR. What happens is the customer is stuck and, in general, they remember. Now, if you are the only game in town, perhaps it is a way to force the govt to throw you more cash. Most contracts are not like this.