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Why Do Air Force Planes Need $10,000 Toilet Seat Covers?

It seems the Pentagon is (still) overspending on toilet seats. Then again, the federal government’s largest agency overspends on just about everything else, too.

According to a recent news report [1], a Department of Defense contractor told the Air Force that each new toilet seat cover for the C-17 cargo plane will cost $10,000. Will Roper, the Air Force’s chief acquisition official, rather than pooh-poohing the cost, defended it by claiming the company would have to switch production from other products to make a limited number of toilet covers, thus driving up the expense. Roper added that the Air Force could 3D-print the toilet seat covers for $300 a piece, but would likely have to pay “some kind of profit margin or royalty” to the company.

Back in 1985, the Project on Government Oversight led the way in exposing contractors who were charging the Pentagon $640 per toilet seat cover [2]. Adjusted for inflation, that would be about $1,512 today [3]. So why are taxpayers now on the hook for nearly seven times that amount, or having to pay contractors if the government produces the seats itself? Without access to cost or pricing information, the government can’t challenge the company’s ask, even after it was found to have exceeded anything else in the commercial marketplace.

The Department of Defense and Congress have totally abdicated their responsibilities when it comes to making sure taxpayers pay a fair price. Failing to secure upfront government ownership of intellectual property rights for systems it paid to research and develop is one of the main drivers of costs and a major source of contractor profits [4] when it comes to operations and maintenance. It works well for the contractors. By owning the intellectual property rights, the prime contractor makes itself the only outfit capable of providing the necessary items. Moreover, that monopoly prevents other companies from providing maintenance support to the patented item. In many cases, contractors argue that the costs of these products shouldn’t be questioned because they are “commercial items,” supposedly available for sale and with prices set by the market. In cases like this, though, it’s clear the government is the only customer and pays accordingly high prices.

But there might be an out—if the Pentagon wants to use it. Back in 1980, the Bayh-Dole Act [5] was passed, and subsequently expanded by President Reagan [6]. That law provides the government with the right to produce [7] a patented item for its benefit or to exercise “march-in rights [8]” that allow others to commercialize patented technologies and potentially control unreasonable prices—including those for so-called “commercial items.” The law protects taxpayers, “ensuring that U.S. citizens enjoy the benefits of public R&D funding.”

As of August 2016, however, “[n]o federal agency has ever exercised its power to march in and license patent rights to others,” according to the Congressional Research Service, and Congress hasn’t taken up any legislation to settle debates [9] about when the government can use its march-in rights. In most cases, government officials seem to buy the corporate line [10] that when companies “hold patents” to parts being sold to the government, “others are not allowed to make them.”

Beyond the patent issue, not being able to question the price tag for spare parts also adds up. Recent audits have shown repeatedly that the Defense Department continues to spend too much for spare parts. In 2011, it was Boeing charging $644.75 [11] for a gear smaller than a dime that sells for $12.51—more than a 5,100 percent markup. In 2014, it was Bell Helicopter charging [12] $492.17 for a $36.08 straight-headed pin. In most of these cases, we only learned the specifics because audit reports were leaked. The versions released by the government redacted the prices as “business sensitive” information.

The Defense Department has to convince Congress that it needs accurate pricing information to determine whether contractor bids are reasonable. In 2012, POGO supported [13] a Defense proposal to improve access to contractor cost and pricing information for so-called “commercial” items, which is a contract designation that often results in bad deals for taxpayers. Not only did the defense industry’s boosters on the armed services committees reject the department’s proposal, they actually expanded the definition of commercial items [14] to allow for even more abuse in the future. Without the information it needs to assess prices, the department is playing a game of pin the tail on the donkey [15]. If Congress has its way in this year’s defense authorization bill [16], ripping off taxpayers will only become more common.

change_me

The government needs to restrict its definition of commercial items to those actually sold in the commercial marketplace. Unfortunately, many government commercial item purchases have been awash in wasteful spending based on the elasticity of the current definition. Items with little or no market availability were easily labeled as commercial, and were purchased on a sole-source basis (i.e. non-competitive contracting) with no objections from government acquisition staff or reviews by auditors. The “commercial item” definition was developed by industry and enacted into law in the 1990s (as part of so-called “acquisition reform”) precisely in order to prevent the contracting agencies from obtaining cost or pricing data when adequate price competition—which exists in real markets—is not there. The law should more accurately have been referred to as the “Sole Source Contracting Without Cost or Pricing Data Act.”

The Pentagon needs to take patent and pricing issues seriously and protect taxpayers. Improved contract negotiations and access to cost or pricing information are a must. Bad deals must be redone. Until those solutions occur, the Defense Department should explore its rights to obtain these items at a cheaper price. It’s about time the Pentagon placed taxpayers first and stopped this three-decades-long spare-parts horror story. No one needs a $10,000 toilet seat cover. It just plain stinks.

Dan Grazier is the Jack Shanahan Military Fellow at the Project on Government Oversight. He is a former Marine Corps captain who served tours of duty in Iraq and Afghanistan during the war on terror. His various assignments in uniform included tours with 2nd Tank Battalion in Camp Lejeune, North Carolina, and 1st Tank Battalion in Twentynine Palms, California.

18 Comments (Open | Close)

18 Comments To "Why Do Air Force Planes Need $10,000 Toilet Seat Covers?"

#1 Comment By Fazal Majid On June 14, 2018 @ 12:19 am

There’s a similar situation in the radios used for public safety like police or firefighters. San Francisco is spending $150M to outfit its public transit with those digital radios, or over $10,000 per radio. They have to comply with “Project 25” standards mandated by the Federal government, who outsourced development of the standards to the Telecommunication Industry Association.

They baked into the standard proprietary voice encoding software from a MIT spin-off called Digital Voice Systems, without negotiating a cap on license fees. DVS now has a government-issued license to print money, and most of the grossly inflated cost of the radios comes from those license fees.

#2 Comment By Lars On June 14, 2018 @ 6:56 am

I have a solution: if the military can’t control this type of misuse of public funds, then the defense budget should be cut. This will give them plenty of incentive to stop these abuses. Right now, it seems to be a cozy relationship between the military and the contractors, supported by their stooges in congress who should be voted out of office. This is a bi-partisan issue.

#3 Comment By Kent On June 14, 2018 @ 7:29 am

Thorough waste of electronic ink. The DOD is supposed to overpay for stuff. Maximizing the profits of defense contractors is the real role of the Defense Department. Pushing them to do that is the role of Congress. How do you win elections and get rich without campaign bribes from the defense community? You can’t.

I don’t actually believe this author even really cares about this subject. Notice no names are given. Which defense contractors? Who are the owners of same? Which members of the Armed Services Committee? How much did they receive in bribes and from whom? Nothing actionable here. Just blowing smoke.

#4 Comment By Whine Merchant On June 14, 2018 @ 8:22 am

Maybe the Pentagon get raise a tariff on what it buys from US companies. That makes about as much sense as the other tariff move’s coming from this administration.

#5 Comment By Marie On June 14, 2018 @ 9:12 am

Or, of course, new military stuff (toilets, for example) could be produced to match the specs of the bits and parts you can pick up at the Big Orange Monster for a couple of bucks.

#6 Comment By john On June 14, 2018 @ 9:31 am

I know it looks bad, but absurd military pricing is pro-peace. Imagine if the Air Force was charged a roughly sensible amount for a toilet seat cover, like say $11. Multiply that by every component on the plane, the effect would be enormous. Sounds good, but the problem is now our military budgets would buy waay to much hardware. Instead of having 12 carrier battle groups we would have 40, and so on. As it is we have too strong an urge to poke our nose where it doesn’t belong, imagine how much stronger that urge would be if we had 3x the military.

If I ever get involved in a military project, I always use the most expensive parts and processes in an attempt to drive the cost as high as possible.

Remember cost-overruns are patriotic

#7 Comment By Paul Blase On June 14, 2018 @ 12:20 pm

Sigh. Come on, people, actually study a topic before writing about it! You don’t put anything from a hardware store into an airliner, even a commercial one, much less a military one. Everything in an aircraft is flight rated, proven to be safe for the aircraft and crew – even under extreme conditions. Very few of these items are off-the-shelf, most are specifically designed for the aviation industry and made with limited (and thus more expensive) production runs. (It’s also not just the “seat” but the entire assembly).

In general, when you run into one of these “why is it so expensive” things there are three possible explanations.

1) It isn’t what you think it is. Flight-rated toilets, coffee makers, wrenches, hammers, and other pieces of equipment used in aviation and other specialized fields are specially made for particular applications. These aren’t generally available at your local Sears!

2) Low production. I can purchase an Amphenol connector from Digi-Key for $0.35. The crimp tool for that connector costs $400, and it’s not even a particularly complicated one. Specialty tooling, especially that used in fields such as avionics, always costs more simply because it’s not sold in large quantities.

3) Government procurement regulations. Blame Congress for this one. If a government entity, especially a military one, needs a piece of equipment – even a Sears socket wrench, they – with very few exceptions – cannot simply go and buy one with a credit card. Everything must be purchased by competitive bid. For most purchases this means that a service company such as SAIC, MTEQ, or DCS has won a competitively bid service contract and will purchase the item for the government – with a previously negotiated markup. It’s not robbery, it’s simply how government procurement works.

Do try and get the entire story before criticizing.

#8 Comment By GregR On June 14, 2018 @ 12:56 pm

Complain all you want, but this is a feature not a bug. The DoD has a revolving door to the defense industry, who then sell overpriced stuff to their former subordinates with a wink and nod that when they retire there will be a cushy job available for them. Congress doesn’t really care because those same profits fund their re-election campaigns, and American Patriotism is now defined by the amount of money spent of the DoD not by what it buys.

Do you really think it is happenstance that the F-35 is built in 45 different states (it certainly isn’t for manufacturing economy)? It is all driven by a need of the MIC to bend lawmakers to its own economic benefit.

#9 Comment By Bob On June 14, 2018 @ 3:13 pm

Mainly because of the procurement methods the military must meet. Most of the cost is re-opening a procurement for an item which must meet many specifications and which the number of spares in the earlier contract were used up. An manufacturer must set up to make a number of seats but the brilliant procurement rules He must follow. Build, test, and inspect for a single item. That is unnecessarily expensive. Change foolish regs.

#10 Comment By Paul On June 14, 2018 @ 5:12 pm

You mischaracterize “march-in rights” under Bayh-Dole – the provision *only* applies to technologies that were originally invented by a government entity and/or under government funding, and subsequently licensed by an agency of the government to a third party for commercialization. It does not give the government unfettered rights to march-in on *any* patent. And it was written to insure the technologies being licensed were actually being commercialized, not a a cudgel against “high prices”.

#11 Comment By Nelson On June 14, 2018 @ 10:19 pm

Paul Blase has a lot of good points. Unfortunately, Congress is the only body capable of changing the rules. They actually got close once but with the Citizens United decision, they’ve become permanently entrenched in the system of helping corporations in exchange for campaign contributions (all at taxpayers’ expense of course).

#12 Comment By EliteCommInc. On June 15, 2018 @ 12:31 pm

First, put congressional reps on a fixed salary and remove them from being boards or owning stocks and bonds of any kind — period.

second, no nonpublic meetings hearings or conferences with lobbyists of any kind on any occasion

third, no contributions beyond $1000 for any campaign from any individual or entity, including subsidiaries of parent companies

fourth, I bought an oversized toilet, that is very functional, but is probably too large for the space — I am happy to donate it for use by any of our armed forces branches.

I think you can buy toilets any home supply and other store for less than seventy dollars even buying strictly US product.

#13 Comment By connecticut farmer On June 15, 2018 @ 3:45 pm

…or $200 screwdrivers with which to install ’em.

#14 Comment By Gerald Arcuri On June 16, 2018 @ 2:46 pm

Well, to torture an old motorcyclist adage, “If you have a $10,000 ass, get a $10,000 toilet seat cover.” Obviously, we need the very best money can buy for our military. But I think common sense really ought to play a larger role in these procurement decisions.

#15 Comment By Brunorueful On June 17, 2018 @ 1:52 pm

Time to just state simply that the US military is the best organized crime scheme in the history of the world. It is a beautiful thing ! Which is not to say that it doesn’t perform an absolutely essential function: draining the wealth from our lunatic capitalist abundance. Waste is actually the most important economic activity there is. Why don’t economists appreciate and study it ? God forbid that we should use our fantastic wealth to create a sustainable economy, abolish poverty and create a world that makes sense !

#16 Comment By Wizard On June 19, 2018 @ 10:09 am

Citzens United had nothing to do with it, Nelson. The government/contractor/lobbyist revolving door, political engineering (the practice of spreading a project out over as many congressional districts as possible) and a shameful tendency to paint any questions about defense spending as unpatriotic? These and other tricks were standard practice long before SCOTUS correctly decided Citizens United. It is fascinating, though, to see how many people of widely varied political persuasions manage to make a hobbyhorse of this case.

#17 Comment By Antonia On June 20, 2018 @ 5:11 pm

Didn’t any of you see Independence Day???
It’s all very simple. $5000 hammers, $10,000 toilet seats, etc. is how you get funds for secret projects.

#18 Comment By Miles On July 15, 2018 @ 3:50 am

So why can’t the Air Force simply get one of the toilet seat covers from a C-5 sitting in the boneyard in Tucson? That’s why they are there. There are no license fees needed as the covers are already purchased. It’s unlikely that all of the covers on the boneyard C-5s are missing. There’s no new production involved, no contracts to bid out, no money to spend other than the cost of FedExing the part to the airbase where it’s needed.