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Boeing overcharged the U.S. Air Force 8,000% above market for soap dispensers
- cies 2y agoI hope their stock price goes "boing". Arrogant company, endangering air traffic, leaving astronauts in space...
- openrisk 2y agoMaybe they are special dispensers that keep working in sudden and unplanned low pressure conditions?
- fransje26 2y agoAnd they stop working in high-pressure situations?
- cebert 2y ago> “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.
- nathanaldensr 2y ago"I'm shocked--shocked!--that grift is occurring in this establishment!"
- Sniffnoy 2y agoI have to point out here, I think the word you're looking for is "graft".
- NLips 2y agoNo, it’s “grift”: https://www.wordnik.com/words/grift https://www.wordnik.com/words/grift
- Sniffnoy 2y agoNo, it's not. "Grift" is a count noun. You can't say "grift is occurring here"; you can say "a grift is occuring here", or "grifts are occurring here", but not just "grift is occurring here". Meanwhile, "graft", in the sense of the abuse of an office for personal gain, is a mass noun and can be used this way. Perhaps the commenter's mistake was leaving out an article rather than using the wrong word? The latter seems more likely to me, however.
- o11c 2y agoBoth potentially apply, but it can be hard to prove which: graft = obtain illegally by bribery grift = obtain illegally by trickery
- Sniffnoy 2y agoWell the thing to note here is that "grift" is a count noun. (Their definitions as verbs is not what's relevant here!) You can't say "grift is occurring here"; you can say "a grift is occuring here". Meanwhile, "graft", in the sense of the abuse of an office for personal gain, is a mass noun. Perhaps the commenter's mistake was leaving out an article rather than using the wrong word? The latter seems more likely to me, however.
- miles 2y ago> You can't say "grift is occurring here" Sure you can; "grift" can be used as an abstract noun, much like "crime", e.g., "Crime is occurring here" vs. "A crime is occurring here".
- Sniffnoy 2y agoThe term you're looking for here is "mass noun" or "uncountable noun", and... well I was going to say "no, it can't", but searching does turn up some uses, so, uh, I guess people are saying that now and I was wrong? It must be pretty new; I'm not seeing it in dictionaries. (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...)
- readthenotes1 2y agoI had assumed that they were there to hide costs for things that would not bear scrutiny but that still needed to be paid for. Not just speaking expenses for ex generals, but also supplies provided for operations that many of us would be horrified to find out about.
- tdeck 2y agoConsidering the things the US funds in the open, even when doing so directly violates US human rights law, I shudder to think what would be covered up.
- wbl 2y agoNo the black budget is a line item in the overall budget. Very few things go into it: even advanced weapons will be separated line items outside it.
- 8note 2y agoA fourth option would be "we want to keep Boeing in business, but can't offer direct subsidies per trade agreements"
- nextworddev 2y agoIt all goes into the GDP I guess
- rootedbox 2y agoI mean.. they are really nice soap dispensers.
- Onavo 2y agoPix? I don't think Boeing ones are luxury branded ones, but I might be wrong.
- unsnap_biceps 2y agohttps://www.cbsnews.com/news/air-force-overpaid-8000-percent-soap-dispensers-military-aircraft/ https://www.cbsnews.com/news/air-force-overpaid-8000-percent... has a picture and it's a pretty standard run of the mill pump dispenser.
- Brybry 2y agoThat's interesting cause this reddit album[1] has this picture: https://www.reddit.com/media?url=https%3A%2F%2Fpreview.redd.it%2F6sujyvj1s5hc1.jpg%3Fwidth%3D636%26format%3Dpjpg%26auto%3Dwebp%26s%3D2e08f97e4964effb3825adaaa08d97e583c39c0d https://www.reddit.com/media?url=https%3A%2F%2Fpreview.redd.... [1] https://www.reddit.com/gallery/1al24h7 https://www.reddit.com/gallery/1al24h7 (images #9 and #10)
- unsnap_biceps 2y agoThat looks like it might be a hand sanitizer that was added due to covid? My work has those command strip stuck all over the building. It's possible the soap dispenser is to the left of the sink and just hidden by the angle.
- unsnap_biceps 2y agoFrom https://www.cbsnews.com/news/air-force-overpaid-8000-percent-soap-dispensers-military-aircraft/ 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.
- dtech 2y agoAlso in a military context it's probably worthwhile to heavily scrutinize your supply chains and nog just install soap dispensers from Amazon. Only a few months ago we saw an example of a intelligence agency implanting and blowing up bombs in equipment
- tedunangst 2y agoThey just need to break down the invoice. $72 soap dispensers $140000 knowing where to put them People love those stories.
- fragmede 2y agoFilling out paperwork would be the line item that balloons costs.
- fransje26 2y agoPumping up their dividends would be the line item that balloons costs.
- tonyedgecombe 2y agoRunning my own business I soon learned that aerospace companies were too onerous to deal with. I remember one in particular where they wanted me to accept their seventy pages of terms and conditions before I would accept a $99 order.
- mNovak 2y ago"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.
- Maxion 2y ago> But obviously many many things being vastly over-specced most of the time. 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.
- cjensen 2y agoThe 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.
- edm0nd 2y agoWhat about designing the plane to use a common soap dispenser that doesnt cost $150k? 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.
- dyauspitr 2y agoIt’s $150k for 222 dispensers, not just one. At $671 it’s overpriced but depending on what custom spec they had, maybe not by a whole lot. I’m imagining the metal soap dispensers in airline bathrooms maybe with some additional military specs.
- sschueller 2y agoAlso I assume they are still using regular soap refills for these things or are they?
- ryandrake 2y agoI’m sure the Boeing Soap is $50K per liter.
- ars 2y ago> What about designing the plane to use a common soap dispenser that doesnt cost $150k? 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.)
- cm2187 2y agoWould 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.
- newsclues 2y agoHow much is the “overcharging” in the pharmaceutical and healthcare industries?
- Aloha 2y agoThe 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.
- KennyBlanken 2y agoCongress does not stop the US military from "keeping a database of historical prices, obtaining supplier quotes or identifying commercially similar parts." 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
- olelele 2y agoThe only free curriculum in a right wing world. Army or prison.
- kasey_junk 2y agoYou’ve got that backwards, at least in some instances. The military pretty regularly tells Congress it doesn’t want something and Congress keeps buying it to keep constituents happy: https://www.military.com/daily-news/2014/12/18/congress-again-buys-abrams-tanks-the-army-doesnt-want.html?amp https://www.military.com/daily-news/2014/12/18/congress-agai... 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/2020/07/20/spending-on-contracts-drives-growth-in-federal-defense-dollars-to-states https://www.pewtrusts.org/en/research-and-analysis/articles/...
- SSchick 2y agoExcuse 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...
- ozim 2y agoHey 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”.
- mcqueenjordan 2y agoBased 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.
- cryptos 2y agoPercentage 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.
- tptacek 2y agoI 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?
- oivey 2y agoIt 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.
- rullelito 2y ago> Why does it have to be somehow the government’s fault Because they bought it. > They’re so unable to control costs I assume you talk about the government here?
- oivey 2y ago> Because they bought it. 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.
- red_admiral 2y ago> somehow regulations cause military soap dispensers to cost that much at face value 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.)
- forgotoldacc 2y agoHaving someone who goes through a list and cross-references the price of every screw and soap dispenser against the market rate to ensure they're not being scammed incurs a huge cost. Especially since the US government is buying billions of various supplies every year. 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.
- heisenbit 2y ago> „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.
- tigereyeTO 2y agoWell yeah, tactical soap dispensers do cost 8000% more than soap dispensers because they have tactical in the name
- surfingdino 2y ago$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.
- black_13 2y ago[dead]
- kjksf 2y ago"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.
- deleted 2y ago[deleted]
- Tempest1981 2y ago> 800x markup doesn't just happen Isn't it 80x? Title says 8000%
- 317070 2y agoFor clarity, a 8000% markup is 80x more expensive, not 800x. Not denying that that still should be unacceptable on the buyer side, if you want to have any semblance of a functioning market.
- fransje26 2y agoYes, but how are you going to get that cushy job in the industry once you retire from your government position if you start acting "tough" on too-big-to-fail companies? Them revolving doors need to keep turning to line your own bank account.
- DidYaWipe 2y ago"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.
- _djo_ 2y agoThere are watchdog groups. The DoD Inspector General mentioned in this story is one of them, but the main one in government is the Government Accountability Office (https://www.gao.gov/ https://www.gao.gov/). Famously, the GAO saves the federal government between $70 and $200 a year for each dollar spent on its budget. There are also various levels of auditors within the organisation, some of whose reports are used as inputs for the IG and GAO.
- DidYaWipe 2y agoWell, if they're generally effective (oh yeah, that's a pun), so be it. Not surprising that we mostly hear about the egregious failures.
- _djo_ 2y agoPretty much, yes. Broadly speaking, the US federal government's financial controls are good and prevent a ton of corruption and waste. At this scale no system can be perfect though, and there will always be some. 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.
- bamboozled 2y ago"Dismantle Boeing and the Air Force, immediately"
- belter 2y agoNot as much as Musk companies are going to overcharge, the government agencies he now manages...
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- bjackman 2y agoIt'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).
- bufferoverflow 2y agoLooks like the buyer didn't shop around and just went with the first crazy offer. Why blame Boeing for this? They just made an offer and someone took it.