The Best Way to Make a Profit as an Aerospace Company is to Fail (https://qz.com/1784335/the-space-military-industrial-complex...), a compelling piece about how massive corporations like Northrop Grumman have little incentive to hit their contract budgets and are arguably incentivized not to. “Northrop Grumman […] won the James Webb Space Telescope contract in 1996 with a promise that the project would cost $500 million and be flight-ready in 2007. The telescope is now likely to launch in 2021 and is expected to cost nearly $10 billion. [...] [W]ith every delay and snafu, Northrop Grumman rakes in more money as missed deadlines extend the timeline and require more funding from the government. One delay in 2018 brought Northrop Grumman close to a billion dollars alone—twice the price the firm originally quoted to the government for the entire project.” According to this document (pdf) released on Jan. 28 by the Government Accountability Office, the JWST has only a 12% chance of launching in March 2021. The massive overruns by Boeing on SLS are a similar example.
I worked at Northrop Grumman a decade ago on a contract that was missing it's deadlines. It was pretty choatic, and management was not very good (every new thing became a #1 priority). To try to get things done we were allowed to work as much overtime as possible. They even had white board showing who had worked the most hours (the top several people people worked over 2000 extra hours during a 12 month period). I almost burned out during this time period (though that's a different story). I didn't get the impression that there was an incentive to fail, quiet the opposite. People were genuinely worried about the reputation of the company. However, that was just my perspective as a ground level grunt. I don't know what was going on at the higher levels.
I never understood why there aren't performance requirements in government contracts. Same thing with infrastructure construction here in DC... new offices go up in a year, but changes to the intersection in front of said office take 5 years and cost multiple of the office itself. [hyperbole, but only just]
How is your comment relevant to the OP topic? As mentioned by chrispauley and jdsully elsewhere in this thread, this "charge" is not Boeing charging NASA, but rather Boeing reserving some of its own money to cover a possible future expense.
Always annoys me when talking about foreign aid to "3rd world" countries that you'll have people get on a high horse about 3rd world govts being so corrupt that money just ends up in the hands of cronies and the well-connected.
The reality is any such corruption is dwarfed by the corruption that goes on in the award of US govt contracts.
This is all an inevitable consequence of the US being one of the few countries on earth were bribery (by another name) is legal. So long as these corporations keep bribing the politicians, their contracts will continue to get extended.
Yes. It is great that NASA is trying to get away from this model with the Commercial Crew Program. Boeing would eat this cost, just like SpaceX does when it has problems. Cost plus contracts, while maybe necessary in some situations, evolves huge cost bloat in defense, large public works, and health insurance sectors of the economy.
Sitting by and doing nothing is a sucker's game. I've always put money in NOC, LMT, and BA. They'll always go up because the government is easy to sucker and the people are easy to sucker. You just give them the latest spiel about who's a threat and bam, the people love it, and the government loves spending the people's money. Every one of them 5x-10x over the last decade.
Can't wait to hear how the Raider program takes forever haha. The US military is already way overpowered anyway, so the way I see it, I'm just getting the money I put in taxes back here plus a little from all the guys who don't play the game. And if you complain I can just seed something on Twitter about it being outsourced engineers who made the mistake. Then you'll rage for a few minutes and give me money.
'Charge' here is a confusing term. The way I take it they have set aside this money in case they need to do another test. The title makes it seem as if they have charged (or are preparing to charge) Nasa for this amount. That wouldn't be too surprising given Boeing's history, but does not appear to be the case here (yet).
Directly from the financial report from Boeing:
> Fourth-quarter operating margin decreased to 0.5 percent due to a $410 million pre-tax Commercial Crew charge primarily to provision for an additional uncrewed mission for the Commercial Crew program, performance and mix. NASA is evaluating the data received during the December 2019 mission to determine if another uncrewed mission is required.
Boeing just posted it's first full-year loss since 1997. If you have to tell your investors bad-news, better to throw in all of the potential bad news that you were on the fence about than to have to make follow-up announcements. (Honey I totaled the car, and the other car may be out of gas, and all our toilets might be backed up.)
https://abcnews.go.com/Business/wireStory/boeing-posts-annua...
Commercial crew program is going to be a way, way cheaper method of putting astronauts in low-Earth orbit than the Space Shuttle. And most of the capabilities that the Shuttle had but Starliner/Dragon lack are either obsolete or are being handled more efficiently by the dedicated X-37 spacecraft.
After the space shuttle was retired in 2011, the United States lost the ability to put human beings into space (other than by buying Soyuz seats from Russia)
Commercial Crew, or Boeing's contribution to it specifically?
The argument for Commercial Crew seems clear. The argument for two companies doing it is redundancy, in case one company goes bankrupt or hikes prices or has a huge mishap requiring months/years of investigation and remediation.
[+] [-] tectonic|6 years ago|reply
The Best Way to Make a Profit as an Aerospace Company is to Fail (https://qz.com/1784335/the-space-military-industrial-complex...), a compelling piece about how massive corporations like Northrop Grumman have little incentive to hit their contract budgets and are arguably incentivized not to. “Northrop Grumman […] won the James Webb Space Telescope contract in 1996 with a promise that the project would cost $500 million and be flight-ready in 2007. The telescope is now likely to launch in 2021 and is expected to cost nearly $10 billion. [...] [W]ith every delay and snafu, Northrop Grumman rakes in more money as missed deadlines extend the timeline and require more funding from the government. One delay in 2018 brought Northrop Grumman close to a billion dollars alone—twice the price the firm originally quoted to the government for the entire project.” According to this document (pdf) released on Jan. 28 by the Government Accountability Office, the JWST has only a 12% chance of launching in March 2021. The massive overruns by Boeing on SLS are a similar example.
[+] [-] patorjk|6 years ago|reply
[+] [-] alistairSH|6 years ago|reply
[+] [-] jessriedel|6 years ago|reply
https://news.ycombinator.com/item?id=22195084
[+] [-] markdown|6 years ago|reply
The reality is any such corruption is dwarfed by the corruption that goes on in the award of US govt contracts.
This is all an inevitable consequence of the US being one of the few countries on earth were bribery (by another name) is legal. So long as these corporations keep bribing the politicians, their contracts will continue to get extended.
[+] [-] njarboe|6 years ago|reply
[+] [-] scarejunba|6 years ago|reply
Can't wait to hear how the Raider program takes forever haha. The US military is already way overpowered anyway, so the way I see it, I'm just getting the money I put in taxes back here plus a little from all the guys who don't play the game. And if you complain I can just seed something on Twitter about it being outsourced engineers who made the mistake. Then you'll rage for a few minutes and give me money.
Thanks, my dudes. Index funds are for losers.
[+] [-] chrispauley|6 years ago|reply
Directly from the financial report from Boeing:
> Fourth-quarter operating margin decreased to 0.5 percent due to a $410 million pre-tax Commercial Crew charge primarily to provision for an additional uncrewed mission for the Commercial Crew program, performance and mix. NASA is evaluating the data received during the December 2019 mission to determine if another uncrewed mission is required.
https://boeing.mediaroom.com/2020-01-29-Boeing-Reports-Fourt...
[+] [-] jdsully|6 years ago|reply
Similar wording can also be used with respect to debt that will never be collected.
https://en.wikipedia.org/wiki/Charge-off
[+] [-] VT_Dude|6 years ago|reply
[+] [-] kapnobatairza|6 years ago|reply
[+] [-] aj7|6 years ago|reply
[+] [-] jessriedel|6 years ago|reply
[+] [-] Rebelgecko|6 years ago|reply
[+] [-] ceejayoz|6 years ago|reply
The argument for Commercial Crew seems clear. The argument for two companies doing it is redundancy, in case one company goes bankrupt or hikes prices or has a huge mishap requiring months/years of investigation and remediation.
[+] [-] redis_mlc|6 years ago|reply
That's a valid question since we don't need manned space flight.
[+] [-] british_india|6 years ago|reply
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