Guess she should have paid more attention in Econ 101.
Cost of actual product in materials may be $32. But there was RnD, labor, equipment, benefits for workers, insurance, transportation, etc...involved in all other cost. And that there were probably other bids.
*facepalm.
So, she can pay $137/vial for insulin, but I have questions:
1. How much does it cost to make the insulin if she applied her non-comprehensive analysis to that the way she did the clutch? $50? $30? Much less?
2. Is there more demand for insulin than for those specialized clutch disks? Economies of scale.
3. Did she read the government's RFP for the clutch disk? Does the gov't demand the part exceed the OEM standards used for commercial production? Is quality control for these parts going to cost more? What about testing? What about ongoing replacement part supplies? What happens when the gov't needs 50 of these to upgrade the consumer parts for better reliability, and the production facilities are no longer tooled for them?
4. She didn't mention if the same company in her print out is the same company that was awarded the contract. If not, then why did the cheaper company not submit a bid?
5. Is she aware the gov't has laws (passed by Congress) on who gets gov't contracts? Small, minority owned & veteran owned companies often take priority. Then there's the sole source rules, but that might not apply here. Basically, the gov't is required by law to publish an RFP: and choose from the proposals who they buy from. They are not allowed to simply buy from a commercial source.
We learned that trying to save 50% of a $20K furniture programmed (scheduled) purchase. We found the same chairs locally for 1/2 what the cheapest GSA price was. When the request for purchase was denied, the reason given was:
"Saving funds is not adequate justification for selecting a non-GSA-approved vendor."
