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%.
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 & consolidation (that politicians directly benefited from). If there wasn’t some conflated or exagerrsted reason easily at hand, those in charge of approving the proposal would just say COVID supply chain inflation OR knowingly avoid ever pressing a supplier to reduce their inflated margins knowing they could present it as a reason for price increases. I never saw the gov extract any meaningful price concessions. It was just one 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.
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 & consolidation (that politicians directly benefited from). If there wasn’t some conflated or exagerrsted reason easily at hand, those in charge of approving the proposal would just say COVID supply chain inflation OR knowingly avoid ever pressing a supplier to reduce their inflated margins knowing they could present it as a reason for price increases. I never saw the gov extract any meaningful price concessions. It was just one 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.