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Boeing reports a $410M charge in case NASA decides Starliner needs another test

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Re: Boeing reports a $410M charge in case NASA decides Starliner needs another test

#11

Post by chrispauley »

jdsully wrote: post #5
chrispauley wrote: post #3

'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…

This is standard jargon for investors. The charge is to the company and a hit directly to their earnings. Similar wording can also be used with respect to debt that will never be collected. https://en.wikipedia.org/wiki/Charge-off

Thanks for info on the jargon. I assumed it was, however I also assume there are many like me initially confused by the term without knowledge of how that term is used in that space.

Re: Boeing reports a $410M charge in case NASA decides Starliner needs another test

#12

Post by alistairSH »

ceejayoz wrote: post #6
alistairSH wrote: post #4

Earlier quoted context omitted.

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]

The argument is that something the size and complexity of the JWST has never been attempted, which leaves a lot of Rumsfeld's famous "unknown unknowns" it's unfair to saddle the contractor with. There really needs to be a middle-ground on cost-plus contracts; something that allows for unanticipated issues to be dealt with, but punishes shoddy work or insanely silly lowball bids. https://www.seattletimes.com/business/…

I see your point for true research programs. But, we see similar patterns all the way down to building subways stations - massive overruns and delays and the taxpayer stuck with the bill. Building an above-grade rail should be a mostly solved problem. Just now, in DC metro, we have the Silver line expansion to Dulles - crap concrete is causing massive delays, but instead of forcing the contractor to replace it, the solution is just "eh, we'll just inspect it more often and hope it doesn't fall on anybody's head." And that doesn't solve the delay - it's still years overdue.

Re: Boeing reports a $410M charge in case NASA decides Starliner needs another test

#14

Post by jariel »

spamizbad wrote: post #9
alistairSH wrote: post #4

Earlier quoted context omitted.

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]

There used to be a lot more defense contractors during the cold war. Also, more accountability. So there was competitive pressure to be seen as an organization that could reliably deliver projects. Over the years, many of the major companies merged, then shifted strategies to geographically dispersing their jobs to bolster congressional support. Take the Joint Strike Fighter / F-35 for example: 4 bids. Lockheed won t…

"There used to be a lot more defense contractors during the cold war. Also, more accountability. "

Gear today is far more complicated. Schedule and cost increase geometrically with complexity.

Many of the 'innovations' on early era fighters were quick iterations made by tiny teams.

But it's no longer the 100's of fighters that will win, it's the one squadron with the best gear, radar, comms backed up by the rest of it (AWACS etc.) that will dominate. Of course, it has to actually work (!) but there's something to be said for that.

The basis of the 'over-budget makes money' is still reality however, there's no doubting that.

So it's going to be a matter of how we apply operational integrity in this new era of sophistication.

Re: Boeing reports a $410M charge in case NASA decides Starliner needs another test

#16

Post by jessriedel »

tectonic wrote: post #2

From today’s Orbital Index ( https://orbitalindex.com/archive/2020-01-30-Issue-49/ ): 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 We…

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.

https://news.ycombinator.com/item?id=22195084

Re: Boeing reports a $410M charge in case NASA decides Starliner needs another test

#17

Post by spamizbad »

jariel wrote: post #14
spamizbad wrote: post #9

Earlier quoted context omitted.

There used to be a lot more defense contractors during the cold war. Also, more accountability. So there was competitive pressure to be seen as an organization that could reliably deliver projects. Over the years, many of the major companies merged, then shifted strategies to geographically dispersing their jobs to bolster congressional support. Take the Joint Strike Fighter / F-35 for example: 4 bids. Lockheed won t…

"There used to be a lot more defense contractors during the cold war. Also, more accountability. " Gear today is far more complicated. Schedule and cost increase geometrically with complexity. Many of the 'innovations' on early era fighters were quick iterations made by tiny teams. But it's no longer the 100's of fighters that will win, it's the one squadron with the best gear, radar, comms backed up by the rest of i…

We have powerful computer software today that lets a single CAD engineer replace a room full of draftsman. We can spin up 20 different virtual designs then test them in virtual wind tunnels before a single physical mockup is made. Material science advances also can make your job easier in areas like friction and keeping weight down.

So while I agree things are orders of magnitude more complex, our tools are also much more powerful.

JSF studies started in 1993, when the fastest computer was a 235.8 GFLOPS behemoth -- roughly the speed of a midrange gaming GPU today.

Re: Boeing reports a $410M charge in case NASA decides Starliner needs another test

#18

Post by jessriedel »

aj7 wrote: post #7

Why do we even have this program?

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.

Re: Boeing reports a $410M charge in case NASA decides Starliner needs another test

#19

Post by rory096 »

jessriedel wrote: post #16
tectonic wrote: post #2

From today’s Orbital Index ( https://orbitalindex.com/archive/2020-01-30-Issue-49/ ): 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 We…

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. https://news.ycombinator.com/item?id=22195084

The difference is that the projects mentioned by grandparent are under cost-plus contracts, while the Commercial Crew Program is under a fixed-price contract.

Re: Boeing reports a $410M charge in case NASA decides Starliner needs another test

#20

Post by fgonzag »

alistairSH wrote: post #4
tectonic wrote: post #2

From today’s Orbital Index ( https://orbitalindex.com/archive/2020-01-30-Issue-49/ ): 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 We…

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]

I'm starting to believe it'd be cheaper to just start out the same project with 2 or 3 companies, and then just keep the be st performing one and dump the other two as soon as its clear that one will be finishing the project in time and within budget. That would only double the cost (if you dump early enough) of a govt project, and since most projects seem to have a budget overrun much larger than that, it'd actually end up cheaper.

Companies with no competition and a guaranteed contract will never deliver the goods.

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