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As I remember the actual story: The the hammer was waaaaay more than $1000. But that's because the military said "We'll pay you a total sum of X, but to make i
by wisty 6y ago
As I remember the actual story:
The the hammer was waaaaay more than $1000. But that's because the military said "We'll pay you a total sum of X, but to make it easier to fund the project we'll let you break it into n parts and pay X/n per part".
The contractor decided that to make their cashflow smoother, they'd include "manual impulse force generator" as one of the deliverable parts.
- mattkrause 6y agoThe hammer was "only" $435 and that price is really a reporting artifact. The hammer was part of a larger contract that included spare parts and R&D effort linked to those parts. When the spending was reported, the same absolute amount of R&D ($420) was allocated to every item, inflating the apparent price of a $15 hammer to $435. By the same token, the engineering work on more complicated systems (e.g., an engine) was an absolute steal at $420 and since the total amount of R&D spending was fixed, nobody really got ripped off.