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View Full Version : Boeing Overcharges Taxpayers By Up To 177,000 %



Qtec
06-29-2011, 01:24 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Mega-defense contractor Boeing has been vastly overcharging the Army for basic spare parts, forcing taxpayers to pay more than twice the “fair and reasonable” price, according to an audit conducted by the Department of Defense’s Office of Inspector General and leaked to the Project on Government Oversight. The IG looked at spare parts sales to the Corpus Christi, Texas Army Depot for two helicopters systems and found some egregious price gouging, such as charging $71 for a metal pin that should cost just 4 cents:

$644.75 for a small gear smaller than a dime that sells for $12.51: more than a 5,100 percent increase in price. $1,678.61 for another tiny part, also smaller than a dime, that could have been bought within DoD for $7.71: a 21,000 percent increase. $71.01 for a straight, thin metal pin that DoD had on hand, unused by the tens of thousands, for 4 cents: an increase of over 177,000 percent.

While this case is cause for concern in its own right, it speaks to a bigger question of the Pentagon’s reliance on private contractors. <span style='font-size: 14pt'>Even without Boeing’s price gouging, the IG’s office expected Boehing to charge a “34 percent surcharge fee for overhead, general and administrative costs, and profit, according to the audit report.</span>” And many of the parts studied in the report were available from the Pentagon’s internal procurement agencies at lower costs: </div></div>

link (http://thinkprogress.org/security/2011/06/28/256216/boeing-price-gouging-army/)

Anyone think its only Boehing doing it?

Q

LWW
06-29-2011, 02:46 AM
So ... the points are that gubmint is completely inept and when a fascist economic system is put in place you end up with abuse and waste.

I concur.

So, why do you clamor for more of it?

The gubmint has taken several contractors and deemed them "TOO BIG TO FAIL" and negotiated "COST PLUS" contracts. They have done this across party lines and for decades.

When a contractor has a deal that they can sell an airplane for cost plus XX% ... they have absolutely zero motivation to contain production costs since the taxpayer is locked into paying for the inefficiency.

Worse than that, the contractors are rewarded for said inefficiency.

If a plane has a production cost of $100 and I'm guaranteed a 35% markup the taxpayer pays me $134.

In a free market economy, if I allow my production costs to get out of hand and reach $150 ... my customer still only pays $134 and I lose $16.

In a fascist economy, if my production costs to get out of hand and reach $150 ... well, I get rewarded for that because the taxpayer now has to pay me $181. Hence, by being lax in cost control I'm rewarded by my bottom line increasing from $34 to $51.

This same insanity is what the left wants to introduce into medical care.

Qtec
06-29-2011, 03:55 AM
<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body"> So ... the points are that gubmint is completely inept </div></div>

Eh, no. Criminals defrauded them.

Q

LWW
06-29-2011, 04:33 AM
How?

eg8r
06-29-2011, 08:12 AM
Just to make sure you are aware, Boeing is not a store that the US Army drops by every once in a while to pick up spare parts. These are long term contracts for spares with specific dollar amounts already agreed to. Let's give Boeing some time to answer the CAR before jumping to conclusions. Unlike your twisted mind, Boeing has the opportunity to respond to the CAR and then the DCMA officer will accept or reject.

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">And many of the parts studied in the report were available from the Pentagon’s internal procurement agencies at lower costs: </div></div>Why didn't you bold this part? It is much more important than the rest. Why aren't you questioning the Army for using their own stores first? These parts are not selected out of a parts bin at your local hardware store. There is a PO that is cut which means the Army procurement officer was well aware of the price when he filled the PR on his approved PO.

Why do you continue to jump into subjects you know nothing about?

eg8r

LWW
06-29-2011, 03:36 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: eg8r</div><div class="ubbcode-body">Why do you continue to jump into subjects you know nothing about?

eg8r </div></div>

I'll take "BECAUSE I'M CLUELESS!" for $800.00.