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

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.)

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...

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.

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.

It would almost certainly be cheaper and more effective to do it in house. But instead, in-house capabilities are continually decreasing. The actual government agencies are reduced to supervisory roles.

Stories like this usually result in even more hatred for government employees and more outsourcing.

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/...

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.

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.

When someone gets tricked in a shell game, is it fine because they voluntarily bought into it? Would you legalize such schemes? Of course any scam (short of outright extortion and robbery) relies on the victim to voluntarily hand over money. We could take a social Darwinist approach to business and say any way you gain an advantage is legitimate as long as it's not by physical force. But obviously something nefarious is going on here, because no one would knowingly overpay by that much for no apparent benefit. It's likely kickbacks were involved. This is fraud, they're stealing taxpayer funds.

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.