Posted on 10/26/2022 5:11:53 PM PDT by algore
A new Airbus airliner typically sells for somewhat over $100 million.
Defense contractors like Boeing are accustomed to soft bidding that includes “cost overruns” to be made up by the government. Trump does business like we do...stick to the bid.
Federal acquisitions are always over budget, behind schedule, and failing to meet requirements. There is an expectation that the company can simply get more money, money time, and waivers on some requirements just by filing a request. It’s a sweet deal. Until you make a deal with Trump and he sets firm goals.
There are other ways that government contracts balloon out of control as well. I worked for Martin Marietta in the early-80s. One of our contracts was the MX (Peacekeeper) missile. It was a crucial weapons system and played a big role in the eventual demise of the Soviet Union, but it was a “cost-plus” contract, meaning that it had no fixed upper limit and the company could charge whatever it needed to against it based upon their cost plus a percentage on top of that. Well, what do you think happened? Anytime some other contract with a fixed cost started to run up against its cost ceiling, we were told to just charge those costs against the MX contract.
It eventually exploded into a huge scandal, and you can be sure that similar practices were (and may still be) going on throughout the defense industry.
Probably COVID.
Why wouldn’t Boeing insist on a contract that would be adjusted for inflation? A stupid bet on Boeings part.
NOT with the security requirements of AF One
Lockheed and Boeing are used to a system where they quote a price and then keep jacking it up at the taxpayers’ expense. I’ve read that Boeing also took heavy losses on the KC-46.
I worked for LMT, same deal as Boeing. The sought after contracts are the ost plus type, but both companies have contracts people who understand what a fixed price contract is. Lockheed took on plenty of them and I would like to say most were brought in on time and under budget. But the contracts means everything, and Boeing knew it. I do not feel sorry for them.
No worries Biden will give them the money cause it’s only money.
Good, he made a good deal for them.
I am sure he’s looking forward to flying in them.
Poor Boeing.
The cost isn’t going to stop there. Delay, price increase, delay, price increase,... Just like a democrat sponsored project.
Aw, gee Boeing finds out that not everyone is as stupid as NASA!
“ I must say that $1.95 billion for an airplane is a bit much.”
And counting.
It’s absurd these planes cost this much to begin with, they are mad at how Trump held them to a fixed contract when they are used to cost overruns.
Then...why the Hell did they agree to the fixed price contract?
Sounds like fraud on a billion dollar scale, IMO...
Headline is a bit misleading for the uniformed. It makes it sound like Trump caused the government to loose money, not the contractor who couldn’t perform.
LOL, man, that was good. :)
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