Thursday, June 12, 2008

When $300 Million is insignificant money.

Read this article and look at the cost values:
Boeing says Air Force miscalculated tanker costs

The important numbers come from this: "The Air Force initially put the cost to operate the tanker over its lifespan at $108.01 billion for the Northrop plane, compared with over $108.04 billion for the Boeing tanker."

The difference is $300 Million. It sounds like a lot. I know I'd like to have just a 1% of it to help offset the rising cost of gas for my Hummer H2. However, if you punch it through the dollar-store calculator you find that it's just 0.027% of the total. It's tiny. It's strangely, suspiciously small.

I'd love to know the answers to these two questions:

1) Why are the cost estimates so close? Is there some huge cost to operate the planes that it overshadows all of the other factors like fuel and maintenance?

2) Does anyone really think that claiming a 0.027% cost advantage is really significant? I don't think so.

If you had two painters that estimated $5000.00 and $5,001.35 to paint your house would you consider that any significant difference? I don't think you would - and I don't think the GAO and the taxpayers should consider these two $100 Billion estimates different either. In fact, they should be suspicious that they are so close. Very suspicous.

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