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Boeing overcharged the U.S. Air Force 8,000% above market for soap dispensers reuters.com

oivey2 hours ago

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.

numbsafari25 minutes ago

It’s always really frustrating when the facts of a specific situation don’t conform to our preconceived notions and biases.

rullelito2 hours 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?

oiveyan hour 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_admiral26 minutes 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.)

pydryan hour ago

It's strange how much some people are assuming this is as a result of a mistake or incompetence instead of simple corruption.

"Whoops I made $600 from something that cost me $10"

oiveyan hour ago

True. That’s really a bridge too far for people who believe a Boeing executive who says tactical soap dispensers really do cost $700.

SlightlyLeftPadan hour ago

The international man of mystery would like a word. Those tactical soap dispensers can be a great defense against tactical shoes. Can’t put a price on that.

mschuster9137 minutes ago

> "Whoops I made $600 from something that cost me $10"

I've written about this here some time ago - you don't pay for the soap dispenser or trash bin itself, you pay for the paperwork showing that it is safe to install this trash bin, soap dispenser or whatnot into this specific model of aircraft or spacecraft, and you pay for the paperwork that details the entire life of every tiny little piece used to manufacture that component. For flight-critical parts, IIRC that goes as far as to documenting the specific lot of the iron ore that was used to make the metal sheets, so in the event of something cropping up where something got fucked up in the mine or the smelter, you can recall every single part that could be affected. And there's lots of testing (and associated waste) at each part of the step.

Anything that goes into an airplane or spacecraft has ridiculous rules attached to it... rules that were literally written in blood. Aerospace is amongst the safest ways of transportation because of decades of crashes and learning from each and every single one.

Your average Home Depot soap dispenser has none of that, if it breaks it breaks.

do_not_redeem14 minutes ago

Shouldn't risk factor into the equation? If your soap dispenser breaks, yeah that sucks and it's maybe a little gross, but you can just replace it with you land. I struggle to imagine what rule about soap dispensers was written in blood.

Surely there's a more cost-effective happy medium somewhere between "just buy the Home Depot 2-for-1 special" and "we ran a background check on the guy who mined the metal"

cabirum4 minutes ago

How to tell a "real honest paperwork" apart from a money laundering scheme pretending to be justified by some opaque rules in a monopolized domain?

jon-wood17 minutes ago

This is a soap dispenser though. That's not a safety critical component, the soap dispenser breaking isn't going to cause a plane to fall out of the sky, or the weapons system to accidentally go off, it's just a thing for dispensing soap.

cancerhacker7 minutes ago

If you say “cost overrun” 3 times in a row, Elon Musk will appear to install the soap dispenser from Home Depo himself, insult some people and then only charge half what Boeing did. The first time it is used in flight it will explode because as it wasn’t rated for pressure, blinding the pilot and leading to the loss of the aircraft. Musk insults trans people before losing interest in the whole thing, and trump assigns RFK Jr to dismantle “big hygiene”.

markdown16 minutes ago

Yeah nah, paperwork doesn't cost 8000%. Not to mention Boeing is the one (via massive bribes paid to FAA bosses who are usually "ex"-employees) who gets those regulations written to ensure no other party can bid for $600 soap dispensers.

cjensen3 hours ago

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.

bagels3 hours ago

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.

dmurray2 hours ago

Sounds interesting!

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.

neilv34 minutes ago

If you can pull it off as a worker-owned co-op (and don't ruin it in year 8, but keep on working at the scale you want), that's a really nice business.

Though you might want to also take on some non-government contracts, both to keep everyone busy in between government contract demands on their roles, and to reduce the risk of having "only one customer".

wmf2 hours ago

You also need to provide exact replacement parts for 50 years so you should probably make 666 of them just to be safe.

cenamusan hour ago

But you also get paid for those

mjevansan hour ago

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.

rocqua22 minutes ago

Boeing could have specced some weird stuff on the dispenser, just to make it harder to get elsewhere. Things like impact resistance, yield strength in a fire, or counter-rotating threads to prevent it shaking out.

JohnBooty2 hours ago

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.

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...

bagelsan hour ago

You probably also really don't want slippery floors at a critical (or any) time.

XorNotan hour ago

You also can't just drill a couple of holes wherever to mount it and you don't want it turning to a missile if the plane has to do any aggressive maneuvering.

lazidean hour ago

Also, every material that goes into them needs to be tracked (with paperwork) since it was mined/smelted.

hackernewds2 hours ago

the article believes they should cost $10 though

Maxion2 hours ago

They probably would if they were made in china, and sold in Walmart by the millions.

blitzaran hour ago

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.

jjallen2 hours ago

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.

edm0nd3 hours ago

What 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.

arcticbull2 hours ago

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.

[1] https://www.cb2.com/ramsey-calacatta-gold-marble-soap-pump/s...

oivey2 hours ago

Your example is a marble soap dispenser. Did you go on Google and search for the most expensive one you could find?

arcticbullan hour ago

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.

https://www.neimanmarcus.com/p/labrazel-discus-brown-pump-di...

Y_Y32 minutes ago

> The finest natural materials and the most exceptional quality of craftsmanship converge at Labrazel due to a singular focus—the design and creation of luxury accessories for the bath

Maybe the Pentagon should check these guys out.

[deleted]16 minutes agocollapsed

sschueller2 hours ago

Also I assume they are still using regular soap refills for these things or are they?

dyauspitr2 hours ago

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.

ars2 hours 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.)

Suppaflyan hour ago

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.

juliusdavies2 hours ago

Whoever wrote the article has never had to replace a cup holder in their car.

[deleted]2 hours agocollapsed

Aloha3 hours ago

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.

KennyBlankenan hour ago

Congress 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

kasey_junk22 minutes ago

You’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-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/...

olelelean hour ago

The only free curriculum in a right wing world. Army or prison.

unsnap_biceps3 hours ago

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.

dtech3 hours ago

Also 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

mcqueenjordan2 hours ago

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.

cm21873 hours ago

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.

cebert5 hours 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.

8note3 hours ago

A fourth option would be "we want to keep Boeing in business, but can't offer direct subsidies per trade agreements"

readthenotes13 hours ago

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.

wbl3 hours ago

No 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.

tdeck3 hours ago

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.

nathanaldensr4 hours ago

"I'm shocked--shocked!--that grift is occurring in this establishment!"

Sniffnoy4 hours ago

I have to point out here, I think the word you're looking for is "graft".

o11c4 hours ago

Both potentially apply, but it can be hard to prove which:

  graft = obtain illegally by bribery
  grift = obtain illegally by trickery

Sniffnoy3 hours ago

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.

miles2 hours 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".

NLips4 hours ago

No, it’s “grift”: https://www.wordnik.com/words/grift

Sniffnoy3 hours ago

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.

heisenbitan hour 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.

tedunangst3 hours ago

They just need to break down the invoice.

  $72 soap dispensers
  $140000 knowing where to put them
People love those stories.

fragmedean hour ago

Filling out paperwork would be the line item that balloons costs.

tptacek2 hours ago

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?

openriskan hour ago

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

cryptos2 hours ago

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.

nextworddev5 hours ago

It all goes into the GDP I guess

mNovak3 hours 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.

Maxion2 hours 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.

surfingdino44 minutes 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.

SSchick3 hours ago

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...

tigereyeTOan hour ago

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

newsclues3 hours ago

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

rootedbox4 hours ago

I mean.. they are really nice soap dispensers.

Onavo3 hours ago

Pix? I don't think Boeing ones are luxury branded ones, but I might be wrong.

unsnap_biceps3 hours ago

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.

Brybry3 hours ago

That's interesting cause this reddit album[1] has this picture: https://www.reddit.com/media?url=https%3A%2F%2Fpreview.redd....

[1] https://www.reddit.com/gallery/1al24h7 (images #9 and #10)

unsnap_biceps3 hours ago

That 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.

ozim2 hours ago

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”.

black_1319 minutes ago

[dead]

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