Reply #13: I hope you aren't labeling me an apologist for my comment.

[Old and In the Way]

Here's what I read at the link: "Among the most outrageous examples: the defense contractor charged the Army $644.75 for a small, plastic spur gear that cost another Pentagon agency $12.51."

As someone who has spent 30+ years in purchasing/materials for a variety of commercial product manufacturers, I'm simply pointing out a manufacturing fact of life. If the government purchased 1 gear from Boeing, I'm not shocked in the least that the bill would be $644.75. We also don't know any of the facts related to the other Pentagon agency that bought them @ $12.51. Did they buy a few hundred at the time? The government procurement person ought to be questioned on this one... did he try to get this other Pentagon agency to cough up 1 of those gears? Don't know, the article doesn't tell us that. Maybe he did and they didn't have any or couldn't spare any. If he had to order them, he should have negotiated a better price and probably bought more than "a gear". If he did buy quantity, then the story is poorly written because I interpret that as a single gear. If that was what was ordered, I'm simply pointing out that he's paying the mold set-up costs, product quality check and certification, fixed overhead costs, and profit that a huge company, like Boeing, charges to make and sell 1 gear. As a buyer who understands what I'm buying...I'd like to tell Boeing to stick it - but then I've got another problem. Product qualification. Even if I have the drawings to define and reproduce this gear, I can't just go down the street to Joe's Gear Shop and have them make me a cheaper one. Because Joe's is probably not an improved source for the gear. That would take a lot of time and money for him to become an approved supplier. Certainly more than the $644.75 that was paid. The problem here is that the buying mentality and orders are 'buy what you need'. Lets say he buys 100 gears to get a better price - say at $10.00 ea. Now there's a $990.00 worth of excess inventory on the books. Multiply that by millions of parts that the Pentagon purchases - see what the next 'expose' will be about? "Pentagon buys billions of dollars of unused parts!"

What's the solution? Well, I suspect that the buyer of this gear was someone with no ability or interest to take on Boeing. The problem would need to be addressed by the generals who control/run the Pentagon purchasing function. They have the clout to change the game rules. Problem? They are the same ones who'll be going to work for Boeing the day after they retire from the military. So, that's not a solution.

My solution is to cut the budget by 30% and tell the Pentagon brass and the MIC - "you figure it out".