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Pentagon audit says Boeing cleaned up on Air Force parts, including soap dispensers marked up 8,000% (apnews.com)

submitted 2 weeks ago by [email protected] to c/[email protected]

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According to a Pentagon audit, Boeing overcharged the Air Force on spare parts for a major cargo plane, including marking up the price of soap dispensers by 8,000%.

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[–] [email protected] 12 points 2 weeks ago* (last edited 2 weeks ago) (1 children)

The Defense Department’s auditor reviewed prices paid for 46 spare parts on the C-17 from 2018 to 2022 and found that 12 were overpriced and nine seemed reasonably priced. It couldn’t determine the fairness of prices on the other 25 items.

So if we extrapolate from the data, the majority of the other items were probably overpriced as well.

You could take it once step further and say the trust has proven to be violated, so things that are hard to price have a higher likelyhood of being gauged, too

[–] [email protected] 10 points 2 weeks ago

Be willing to bet they were greasing their profit margins to an insane degree. I used to work at one of the slimy defense contractors (second tier right below the primes). There is this law called TINA (Truth in Negotiations Act). Anything under $2.5M required ZERO cost justification. So managers / directors would bump price right up to the ceiling regardless. Even when the TINA threshold was crossed, they had a bottomless bag of reasons to juice their margins beyond anything reasonable. The thinnest justification would work because the gov knew there was basically no competition left thanks to mergers & acquisitions. If there wasn’t some conflated or exaggerated reason easily at hand, those directors in charge of approving the proposal would just say force majeure (covid) supply chain inflation OR knowingly avoid ever pressing a supplier to reduce their inflated margins. They knew they could present a component supplier’s price as a reason to cover their arbitrary and all the downstream suppliers’ arbitrary price increases. I never saw the gov (DCMA or DCAA- paper tigers) extract any meaningful price concessions. There were good people working there, but it was clear they were there only to prevent the grossest malfeasance in production, not any contractual price gouging. The whole supply chain was just a giant cesspool of greasy contractors from top to bottom. Number go up, more bombs forever. So glad I’m out of that parasitic, death merchant industry.