NASA's million-dollar pen

[gmeazell]

A while ago, I heard a story that NASA spent millions developing a pen that would write in a weightless environment while the Russians gave their cosmonauts pencils. It certainly sounded like something a huge bureaucracy would do. Now, I'm hearing that it was all an urban legend. What's the true story? BTW, I was told the story upon being given a pen that would write upside down, the technology to accomplish this feat having been developed by NASA.

[Lsura]

Snopes (http://www.snopes.com/business/genius/spacepen.asp) claims that it's false.

[Padeye]

This has been covered before and isn't true in the way you heard it. IIRC the Fisher space pen was developed provately and didn't cost nearly that much. Pencils seem like a low tech solution but they break and need sharpening which causes floating debris, a serious problem.

http://boards.straightdope.com/sdmb/showthread.php?t=133950&highlight=space+pen

[GawnFishin']

I was watching a recent episode of "Rocket Science" on the Learning channel or something like that, one of the astronauts interviewed mentioned the space pen and how it was used on one of the appollo missions to open a switch that had been broken off flush while one of the Astronauts was trying to extricate themselves from their space suits. He also mention that the Russians only got a pencil so?????

Damn now I'm going to have to go and search again. I hadn't believe this story until I'd seen this show which was only in the last few weeks. Maybe NASA didn't develop the pen. Maybe there's more to the story than we hear, I don't know.

[alterego]

I own one of these nifty pens - it's key features being no breaking parts and the ability to write on nearly anything, grease included, upside down. They accomplish this feat by pressurizing the metal ink cartridge.

It's inventive, but nothing meriting a million dollars, let alone more than say, 10,000 for R & D.

My WAG.

[David Simmons]

One of the problems with stories like this is that you have to know how the development cost was computed according to the contract terms.

For example. On many government contracts overhead and general and administrative (G and A) costs can be charged to an item on a uniform basis which means that the total overhead and G and A is divided by the number of items in the contract and that amount is charged to each item. This method probably arose when computing was time-consuming and to proportion such costs according to the value of the item being developed would actually increase the total contract cost because of the bookkeeping involved.

For example, suppose someone has a $100 million contract to develop support equipment for NASA that includes 100 items to be developed. If overhead and G and A are 10% of the total that means each item is charged $100,000 for it. So a simple item that only costs $10,000 winds up with a contract cost of $110,000 which is meat for those who want to make NASA look bad.

[Knighted Vorpal Sword]

[Uncle Leo voice ON]

Take the pen, Jerry. Go ahead, take the pen!

[Uncle Leo voice OFF]

:D

[aeropl]

It's also a myth that you need a pen that is pressurized to work in space. Most cheap ballpoint pens work fine. That is according to thiseuropean astronaut (http://www.esa.int/export/esaCP/SEM9YN7O0MD_index_0.html)'s journal.

[Harmonix]

It's also a myth that you need a pen that is pressurized to work in space. Most cheap ballpoint pens work fine. That is according to thiseuropean astronaut (http://www.esa.int/export/esaCP/SEM9YN7O0MD_index_0.html)'s journal.

eh? Ball point pens rely on gravity to work.

Then again, I suppose surface tension would work for a while. Shaking the pen might work too. But it wouldn't be reliable thats for sure.

[glilly]

One of the problems with stories like this is that you have to know how the development cost was computed according to the contract terms.

For example. On many government contracts overhead and general and administrative (G and A) costs can be charged to an item on a uniform basis which means that the total overhead and G and A is divided by the number of items in the contract and that amount is charged to each item. This method probably arose when computing was time-consuming and to proportion such costs according to the value of the item being developed would actually increase the total contract cost because of the bookkeeping involved.

For example, suppose someone has a $100 million contract to develop support equipment for NASA that includes 100 items to be developed. If overhead and G and A are 10% of the total that means each item is charged $100,000 for it. So a simple item that only costs $10,000 winds up with a contract cost of $110,000 which is meat for those who want to make NASA look bad.

HIJACK

Very good point. This is also a common explanation for why the military pays $600 for a toilet seat and NASA pays $100 for a hammer.

The contractor says a big job will cost $10,000,000.00 to supply a number of items. Gov't says contractor must also account for each individual item. Contractor says rent and electricity and heat costs for the facility they'll use to produce items are included in the $10,000,000. How do we account for these on a part-by-part basis? If you make us do some crazy accounting, it will cost more than $10,000,000. Can we just divide equally? Gov't says yes.

Politician goes red in the face about a $600 toilet seat.

END HIJACK

[alterego]

It's also a myth that you need a pen that is pressurized to work in space.


All I was saying is that to write upside down for any amount of time and to write on grease it would need to be pressurized ink - and it is! The reason this pen was invented in the first place is because others - not pressurized - have been sent up before and didn't work according to needs, so i'm not sure where the myth is.

[gregongie]

Knighted Vorpal Sword--It wasn't Uncle Leo. It was Jack Klompus, a neighbor of Morty and Helen's in Flordia.

Phew, I'm glad I corrected that egregious error. Yes, I have certainly bettered the world with my superior knowledge of sitcom trivia. Indeed, future generations...will never again...make the mistake...of...[Cries inside]

Carry on.

[Chronos]

One of the problems with stories like this is that you have to know how the development cost was computed according to the contract terms.Logically, then, there must be other items listed at less than their proper value, to make up for the $600 hammer and the $1000 toilet seat. Does anyone know of any of the examples of such items?

[drachillix]

Can we just divide equally? Gov't says yes.
Politician goes red in the face about a $600 toilet seat.

With present day accounting and inventory practices this is childs play. Each item can show a markup of X% for storage and handling fees based on the % of total dollar value or by volume of space occupied @ cost per unit volume. Pre computer and relational database, yeah it would be a bear.

Paying $500 in storage fees for a toilet seat would be piss poor planning nowadays.

Drach, whos gonna get a CPIM cert someday

[TellMeI'mNotCrazy]

[Uncle Leo voice ON]

Take the pen, Jerry. Go ahead, take the pen!

[Uncle Leo voice OFF]

:D

Damn beat me to it. I bought myself one of the pens, and every time I see it, I hear Jerry's mother.

What did you take his pen for?

[David Simmons]

Logically, then, there must be other items listed at less than their proper value, to make up for the $600 hammer and the $1000 toilet seat. Does anyone know of any of the examples of such items?

I don't understand why you say this. Each item is priced at its cost plus overhead and G & A. So in my example an item that costs $1 million to develop would be priced at $1.1 million. And item, as I said, that costs $10,000 to develop, like a special hammer maybe, would be priced at $110,000.

And of course such account would be simple today. The system, as I said, is probably a holdover from the days when accounting was done on a Marchant calculator.

[El Zagna]

My little hometown newspaper, The Calvert Moment, used this little urban legend as a filler article about a month ago, and the next week I wrote an article (http://home.austin.rr.com/hammondhouse/Baloney%20Radar.htm) politely pointing out that it was untrue and that all of us should be diligent in looking out for stories like this.

Anyway, as others have said, the space pen was developed ny Paul Fisher of the Fisher Pen Company at a cost of about $2 million of his own company's money. NASA no doubt spent some of their own money in testing it in outerspace conditions, and ended up buying 400 of them from Fisher at $2.95 each. That's a pretty good deal for everbody.

[El Zagna]

Holy cow, that was my 1,000th post!

[glilly]

With present day accounting and inventory practices this is childs play. Each item can show a markup of X% for storage and handling fees based on the % of total dollar value or by volume of space occupied @ cost per unit volume. Pre computer and relational database, yeah it would be a bear.

Paying $500 in storage fees for a toilet seat would be piss poor planning nowadays.

Drach, whos gonna get a CPIM cert someday

Though computer packages make the calculation of fixed costs easier, they do not address the fundamental allocations.

We'll take extreme examples. A supplier is supplying bars of lead and platinum to the pentagon. They are allocating fixed costs by product costs. Politician finds out that the supplier is charging 100x as much on overhead on the platinum, even though it takes the same space and the same handling in the warehouse. Politician goes red in the face because the supplier seems to be price gouging on platinum (compared to the lead).

Supplier learns this lesson and allocates fixed cost based on sqaure feet in the warehouse. Supplier also begins supplying large plastic automobile bumpers. Politician finds out that company is charging much more for cheap bumpers than bars of platinum and goes red in the face.

OK, you can do hybid models, activity based accounting, etc. But these do cost time and money to set it up. But who benefits? Typically, the allocation of overhead does not get sent out to the world -- it's there for the company to decide which products to carry, what price to charge, etc. Customers don't care. They just want the final price.

The government sometimes does want the numbers, for whatever reason. The simplest allocation is what will cost the government the least money (unless the supplier can reduce his costs by implementing a more complex system on his own). No matter how "good" the allocation scheme, costs will seem out of line depending on how you look at them.

Wait, were we talking about pens?

[glilly]

Logically, then, there must be other items listed at less than their proper value, to make up for the $600 hammer and the $1000 toilet seat. Does anyone know of any of the examples of such items?

Yes, there have to be. But finding out that the government gets charged $12,300,321 for a jet engine instead of $12,301,321 isn't as newsworthy as a $1000 toilet seat.

[Garfield226]

Yes, there have to be. But finding out that the government gets charged $12,300,321 for a jet engine instead of $12,301,321 isn't as newsworthy as a $1000 toilet seat.

No, there aren't. Read David Simmons' post. The items are ALL marked up by a percentage of the company's overhead. Thus a $50 dollar toilet seat and a $50 hammer and a $500,000 jet engine all get a surcharge of a certain amount tagged onto them.

[quothz]

eh? Ball point pens rely on gravity to work.

Apparantly, that is not the case, as they do in fact seem to work in space.

[glilly]

No, there aren't. Read David Simmons' post. The items are ALL marked up by a percentage of the company's overhead. Thus a $50 dollar toilet seat and a $50 hammer and a $500,000 jet engine all get a surcharge of a certain amount tagged onto them.

I quite understand that all items get an allocation of overhead. I suggest you read my post preceeding the one you responded to.

If someone is expecting a certain type of allocation, say proportional to acquisition cost, then low-priced items (toilet seat, hammer) have too high an allocation (according to what they're expecting), and expensive items will seem to be too low. Of course, no one notices the costs that seem too low.

This is rarely an issue because, again, no one outside a company is interested in how costs are allocated. Do you ask Best Buy how they allocate their store air conditioning costs between DVD players and dishwashers? No, you just want the price (and you want them to stop blathering about their additional warranties).

I don't know why the government would want overhead breakdowns, anyway, especially if a simplistic accounting is used. Maybe they don't anymore. I haven't heard any hammer or toilet seat stories recently.

[Garfield226]

I quite understand that all items get an allocation of overhead. I suggest you read my post preceeding the one you responded to.

If someone is expecting a certain type of allocation, say proportional to acquisition cost, then low-priced items (toilet seat, hammer) have too high an allocation (according to what they're expecting), and expensive items will seem to be too low. Of course, no one notices the costs that seem too low.

I'm still not quite sure exactly what you mean here.

If you mean that the public would expect a proportional markup on items and thus a toilet seat's markup should be less than the markup on a jet engine, and thus when the markup is actually a flat price on all items it makes the toilet seat seem absurd and the jet engine not so much, then I get your point. I suppose it all hinges on what Chronos meant by "listed at less than their proper value."

I took that to mean that if a toilet seat which normally costs $50 is listed for $600, then another item (or a combination of items) should be listed at a discount of $550 to make up for it, which (as far as I can tell, I'm not a military contractor or anything...), isn't true.

[glilly]

I'm still not quite sure exactly what you mean here....
This is an oversimplification, and bids don't quite happen this way, but it's close enough for SDMB work:

What happens is the gov't asks for bids for remodling a submarine. They send out bid packages that detail the work to be done. Contractors bid on the work. Lets say that the winning bid is for $11,000,000.

The government accepts that bid, but they want a full accounting of where that money went.

Let's also say that of the $11MM, $6 million were for parts the contractor has to buy, the other $5 million for design work, transporting and tracking parts, warehousing parts outside the dock, rent, administration, supervision, phones, and hopefully profit.

Let's also say that 10,000 parts are ordered. So, the government may want a cost per part (including overhead), and they expect the sum of the parts to equal that $11,000,000.

The easiest thing for the company to do is to divide the overhead by the number of parts. $5MM/10,000 = $500/part. So a $20 toilet seat is now $520. A $3,000,000 reactor core is now $3,000,500. The overhead for the toilet seat seems horribly high and the reactor a bargain.

Obviously, the toilet seat didn't need nearly as much work to secure, design around, transport, or warehouse than the reactor. The company could do some accounting summersaults to get numbers that seem more reasonable. But what would be the benefit? They already have won the contract for having the lowest overall price. Would it help the government? Maybe, but they'd probably rather have the company spend its time to get the job done on time than try to allocate overhead differently.

Taken out of context, the $520 toilet seat seems like a rip off. The only way to make it not "look bad" would be to require a more complex accounting scheme, which would drive up the costs of the bids. Or the gov't could stop asking for breakdowns of costs and just look at the grand totals. But the government likes to micromanage.

[PatriotX]

The way I heard it, We spent the millions to make the space pen, and the Soviets decided to use pencils.