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To: nightdriver
Don't ever blame the vendor because the toilet seat cost over $600 or the claw hammer cost $1200. By the time the vendor got "qualified" to sell to the gubmint, he had to go through a bazillion non-productive hoops.
That's not exactly true. The reason you have $600 hammers is that the Pentagon procurement procedures are a pain in the ass. But those procedures also allow the defense contractor to put all that paperwork into the price of the hammer, and so make a 15% profit margin on the $600. That's a lot better (for the contractor) than making 15% on $6. If the contractors could make a higher profit margin on more cost effective systems, they would make efficient rather than gold-plated systems. But as long as the profit is fixed and low compared to private sector systems - Cisco's profit margin on some routers approaches infinity - you won't get more success stories like JDAM.
6 posted on 05/26/2002 3:00:42 PM PDT by eno_
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To: eno_
Cisco's profit margin on some routers approaches infinity

I have been buying super-high quality switches from Dell for a third of the price as Cisco's low end stuff. We also have to buy a lot of overpriced low-end Cisco routers to connect former twinax customers to our machine over IP. Why aren't they the most profitable company on Earth? The government should emulate this JDAM procurement method across the spectrum instead of just raising taxes every year.
8 posted on 05/26/2002 3:10:20 PM PDT by AdA$tra
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