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Pentagon Lost Billions, Pennies At a Time
Hugh Pickens writes "MSNBC reports that in 1969, Walter T. Davey, an aeronautical engineer at North American Rockwell, discovered he was being overpaid by roughly 2 cents an hour, or one-third of 1 percent of his pay. Davey submitted the discovery to his superiors and suggested a simple fix. 'It was so simple to correct,' said Davey, a 79-year-old retired Air Force colonel, 'just change a few digits in the coding software.' The Project on Government Oversight, which reviewed Davey's findings last year, estimated the change could save taxpayers $270 million a year. Multiply by 40 years — the length of time since Davey made his discovery — and the figure grows to an astounding $10.8 billion. Legislators ignored Davey's letters, federal auditors deferred to Congress, and lobbyists 'descended on it and tore it into a piece of Swiss cheese' but legislators aren't eager to challenge the powerful defense lobby about a figure that's a relative pittance in the overall defense budget — even if it exceeds $100 million annually. 'A lot of people have taken advantage of the system to reap as much in taxpayer dollars as possible,' says Scott Amey, general counsel for the Project on Government Oversight. 'But when you're going up against the contractor lobby — whether you're an individual across the country or a public interest group or a government employee — it's a tough road.'"
My parents bought their first apartment for 6000 pounds back in 1966. Today, the same property is worth around 200,000 pounds. Salaries followed a similar path. $6/hour then would be like $20/hour now.
Vintage computer adverts: http://www.vintageadbrowser.com/computers-and-software-ads
According to http://data.bls.gov/cgi-bin/cpicalc.pl .. $6/hr in 1969 is equivalent to $34.78 today. I read it on the internet, so it must be true! :P
So not too shabby. Not omgwow!, but not exactly minimum wage either.
This was 1969. $6.00/hr (12,522/year) wasn't so bad. Equivalent in 2009 dollars is $34.87/hr (72,773/year).
You can get the official consumer price index, from 1913 up to now here. $6 in 1969 would translate to approximately $36 today.
For older historical data, plus many other interesting historical data about prices and economic indicators, this site is very interesting.
His salary was equivalent to about $70,000 today, which isn't too shabby (though hardly "overpaid"). Also, the article mentioned that there was a financial incentive for discovering ways to save money. Davey admitted that he was hoping to get some award from his discovery.
ich muß mehr Kuhglocke haben
Er, you mean force workers into Unions to control them using a open ballot system. Hmmmm, billions since 1969 vs trillions in his first 100 days. Defense vs. Wealth redistribution.... Hmmm.....
Me thinks people should be skeptical of your type...
Your parents did a very good business. After correcting for inflation, those 6000 pounds became 80000, which means your parents got 6.5% / year interest in real value plus free rent for over 40 years.
You should study something about economics. Start here.
This guy doesn't work directly for the government. I'll assume its cost plus work that he's doing, so Rockwell charges his hours directly back to the government. However, they don't charge his hourly rate, they charge Rockwells hourly rate for his job position, which is more than his personal calculated take home (or Rockwell would be making no money on his work). So the real losers here would seemingly be Rockwell as they have to pay him out of their pool of money and the $0.02/hr would come out of their profits.
Employees don't have individual rates. It typically goes by job title/position, ie: assoc engineer time is worth $120/hr, senior is worth $200/hr (purely made up numbers, not sure on the actual rate or title names), etc.
If its not cost plus then this is even more confusing as Rockwell is working to a contract dollar value and any extra pay again would come out of their profits. The accounting doesn't make a whole lot of sense to me. Unless this is some special case in which the numbers of people it would affect would seem pretty small.
using extreme examples is a way of avoiding the real problem. you're as much part of the fud as the contractors who champion the broken systems.
My parents bought their first apartment for 6000 pounds back in 1966. Today, the same property is worth around 200,000 pounds. Salaries followed a similar path. $6/hour then would be like $20/hour now.
200000/6000 != 20/6
Military contractors are not natural entities. They have evolved over the decades since WWI to be specialized in getting government military contracts, and away from actually producing at the lowest cost for the highest profit.
There's a joke about $700 hammers. But I've worked for some military contractors, and it's no joke. They're not so much overcharging the Pentagon, as they're probably just trying to recoup their costs. It might actually cost them $650 to produce that hammer. Seriously. And it's not just US military contractors. I've also worked for a couple non-US firms that were just as bad.
Don't blame me, I didn't vote for either of them!