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On Mar 26, 12:25 pm, "Ed Huntress" wrote:

Defense procurement certainly is stupid, but what I said is correct, and
documented. What you've said about Lockheed Martin's contracting is
stupid,
and incorrect.

--
Ed Huntress

I prefer to think that you, someone who studied the defense
procurement for a good six months, do not have a clue. The defense
contractors compete on many levels. Buying weapons systems is
somewhat like buying a car. Most all cars will take 4 people down the
road at 60 mph. But there is a difference between buying a Ford and
buying a BMW or Mercedes. Some will perform better than the required
minimum. Some are easier to maintain. Some will last longer than
others. Buying a weapons system is not like buying bolts where every
ones product is essentially fungible. The military contract
specifications provide a minimum requirement.

Let's get back for a moment to the original point of contention. You showed
that Lockheed Martin pays nearly 30% of their profit in income taxes. Aside
from the suggestion that Lockheed Martin is truly stupid compared, for
example, to GE, who pays no income taxes, one wonders what point you were
making, given that we know that most companies pay far less.

I pointed out that they don't care how much tax they pay, because they're
not really in competition for most of their contract dollars and they can
just lay the taxes on top of their charges. They're easy to justify and no
one is going to underbid them on that basis.

To which you said, my statements are stupid. To which I replied that your
figures are cockeyed, starting with your initial claim that "Most of
Lockheed Martin's defense work is on contracts which were competitively
bid." This is patently false. Anyone who has dealt with the economics of
defense contracting knows immediately that it's false. You can't spend any
time investigating the defense industry and not learn that the big
contractors derive most of their revenue from no-bid projects.

Take a look at the thread on the C-130.

Boeing designed a cargo plane that out performed the current Lockheed
cargo plane in almost every category. However the Lockheed plane
could be loaded and unloaded much faster than the Boeing plane. So
while the Boeing plane could fly faster and carry more, the Lockheed
plane could make two trips for every one trip the Boeing plane could
make and land on unimproved airfields closer to where the supplies
were needed.

So are you now saying there are justifications for no-bid contracts? That's
a separate issue. I'm not arguing with you about that. What I said is that
the nature of the bidding and contracts that Lockheed Martin is awarded
makes the taxes they pay a non-issue. They pay a lot of taxes -- with our
tax money. And they have no incentive to minimize their taxes. because it's
not a competitive issue for them. The taxes don't come out of their pocket,
either directly or indirectly. They're just pass-alongs.
--
Ed Huntress