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.
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.
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.
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.
Can you imagine even being a one-man shop making 222 bespoke soap dispensers to some absurd spec AND jumping through all the documentation hoops that are required for only $150k? I wouldn't take that job. Sounds awful.
The first year you learn how hard it is, you spend 80% of your time on compliance documentation and 80% of your budget on tooling. You still don't have a satisfactory product or a mastery of filling out the forms. It drags on into the second year, you're living on ramen but eventually deliver it (if there's one thing the government procurement process is tolerant of, it's delays) and get paid.
The third year you take on a additional contract, for 200 toilet flushes or whatever. New manufacturing challenges, but at least you're getting the paperwork down.
After a few more jobs, you've cracked it. You start bidding for all the military's bathroom-related contracts. At five or six contracts a year, you have a million or two rolling in (and low manufacturing costs - remember, the spec is such that you can produce it for 80x lower) and you've hired five employees.
By year five, the only thing you care about improving is sales. You still have 5 machine shop staff, paid well but not enough to make them wealthy. You focus on hiring ex-military brass and making them sales reps and lobbyists. You're into tens of millions of revenue, that is, profit.
Year 8, you sell the thing to Northrop or to a private equity firm and go retire on an island.
I wonder what's special enough for this to be different from certified aviation grade equipment? It'd be nice it they could either make a bunch of a design (usefully) for the military to fulfill mil-spec, or if they could take an existing design and just make it in a mil-spec compliant way.
Yeah. People who haven't done manufacturing may laugh, but depending on how many custom parts there are you could easily spend most or all of that $150K just on the molds/tooling.
Now, like you said... the root cause here is probably some absurd spec that prevents them from using some existing commercial soap dispenser whose costs have already been amortized.
Then again, maybe the spec isn't absurd. The C-17 may need to fly in contested airspace. Maybe damage control is a concern. Maybe they can't use commercial soap dispensers because they're plastic and they don't want the plane to fill up with toxic fumes from burning plastic. That is a random guess. I have no idea.
tbh the only solution to the problem is to spend the $250,000 it would probably cost in tooling etc and fill the Boeing ~1,000 order and sell another 99,000 to the public. At $10 each and without paying yourself anything you would probably just about break even.
I think that isolating their relationship to a single transaction like this is disingenuous. Our government pays this company many billions per year. They likely or should have had extra of these laying around for replacements. It’s not unreasonable to expect them to charge a reasonable amount for everything.
But for some reason Boeing continually gets away with being Boeing for some reason.
I mean it doesn't cost $157K it costs $671. They ordered a couple hundred of them.
This one from CB2 is $40 and it doesn't conform to FAA rules and it's not MIL-SPEC. [1]
I suspect if I wanted a limited run of soap dispensers, I was only willing to buy 300 made-to-order, tested and conformant to niche military specifications and aviation specifications, I'd probably end up paying a decent chunk more than CB2.
How much does the entertainment system in your car cost vs an iPad? Is that a rip-off, or is it a niche, custom part that has to be made from automotive grade components?
How much does the soap dispenser cost in a 777 bathroom? That's the real point of comparison, not CB2.
I did, yes, lol. I mean the most expensive one on sale at CB2 which is kind of a mid-range home furnishings store. I'm confident I can find a soap dispenser that costs more than $671 for home use, though.
[edit] Here you go, just under $845. I present you the Labrazel Discus Brown Pump Dispenser available at Nieman's. Only $77 per month thanks to the magic of Affirm. Good news is thanks to Black Friday you get a $125 gift card. Still not MIL-SPEC though.
It’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.
> 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.)
They apparently aren't really any different from the sort you see in public restrooms and those are so cheap the supply companies give them to you for free when you buy a case of soap.
The article references a Watchdog for the source but doesn’t link it. How did they determine the market price for an airplane soap dispenser? Did they just look at the local Walmart and calculate from there? Maybe, and absurd clickbait if so.
> "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 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.
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.
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.
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.
> “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.
I 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.
Considering 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.
Well 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.
No, 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.
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.
"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.
> 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.
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...
Because they bought it.
> They’re so unable to control costs
I assume you talk about the government here?
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.
"Whoops I made $600 from something that cost me $10"
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.
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 first year you learn how hard it is, you spend 80% of your time on compliance documentation and 80% of your budget on tooling. You still don't have a satisfactory product or a mastery of filling out the forms. It drags on into the second year, you're living on ramen but eventually deliver it (if there's one thing the government procurement process is tolerant of, it's delays) and get paid.
The third year you take on a additional contract, for 200 toilet flushes or whatever. New manufacturing challenges, but at least you're getting the paperwork down.
After a few more jobs, you've cracked it. You start bidding for all the military's bathroom-related contracts. At five or six contracts a year, you have a million or two rolling in (and low manufacturing costs - remember, the spec is such that you can produce it for 80x lower) and you've hired five employees.
By year five, the only thing you care about improving is sales. You still have 5 machine shop staff, paid well but not enough to make them wealthy. You focus on hiring ex-military brass and making them sales reps and lobbyists. You're into tens of millions of revenue, that is, profit.
Year 8, you sell the thing to Northrop or to a private equity firm and go retire on an island.
Now, like you said... the root cause here is probably some absurd spec that prevents them from using some existing commercial soap dispenser whose costs have already been amortized.
Then again, maybe the spec isn't absurd. The C-17 may need to fly in contested airspace. Maybe damage control is a concern. Maybe they can't use commercial soap dispensers because they're plastic and they don't want the plane to fill up with toxic fumes from burning plastic. That is a random guess. I have no idea.
I couldn't find pictures of the soap dispenser, but here's apparently a urinal from some version of the Globemaster. I get the feeling these parts are kinda custom... https://www.flickr.com/photos/morganone/122375474/in/photost...
But for some reason Boeing continually gets away with being Boeing for some reason.
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.
This one from CB2 is $40 and it doesn't conform to FAA rules and it's not MIL-SPEC. [1]
I suspect if I wanted a limited run of soap dispensers, I was only willing to buy 300 made-to-order, tested and conformant to niche military specifications and aviation specifications, I'd probably end up paying a decent chunk more than CB2.
How much does the entertainment system in your car cost vs an iPad? Is that a rip-off, or is it a niche, custom part that has to be made from automotive grade components?
How much does the soap dispenser cost in a 777 bathroom? That's the real point of comparison, not CB2.
[1] https://www.cb2.com/ramsey-calacatta-gold-marble-soap-pump/s...
[edit] Here you go, just under $845. I present you the Labrazel Discus Brown Pump Dispenser available at Nieman's. Only $77 per month thanks to the magic of Affirm. Good news is thanks to Black Friday you get a $125 gift card. Still not MIL-SPEC though.
https://www.neimanmarcus.com/p/labrazel-discus-brown-pump-di...
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.)
> "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.
Only a few months ago we saw an example of a intelligence agency implanting and blowing up bombs in equipment
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.
Is that not what's happening here?
I wonder if these egregious examples of expenses are due to lack of controls or intentional corruption.
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".
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.
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.
[1] https://www.reddit.com/gallery/1al24h7 (images #9 and #10)
It's possible the soap dispenser is to the left of the sink and just hidden by the angle.
Anyone knows is just fallout from other investigations, like „hey let’s double check everything from Boeing just in case”.