Transterrestrial Musings

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Someone?

Neal Boortz has been trumpeting this theme forever.

Posted by Mike Puckett at September 2, 2005 02:48 PM

Excuse me, Rand, but I'd like to share this Keith Cowing nasawatch.com piece with you as well as with Jeff Foust. Market signals at NASA? No thankee:

"Competition is impracticable for the following reasons: ... "

"... The cost to bring another contractor up to speed would represent substantial duplication of cost to the government which is not expected to be recovered through competition. ... "

More CEV Work for CSC

NASA MSFC Solic***n: Additional Operations, Engineering, and Integration Work In Support of the Crew Launch Vehicle Project

"NASA/MSFC intends to contract with CSC for the proposed effort on a sole-source basis by awarding a modification to the current purchase order to add this work, which has an estimated period of performance by three months (October 01, 2005, through December 31, 2005)."
Posted by kcowing at 11:35 AM | Permalink

http://www.nasawatch.com/

leads to:

http://www.comspacewatch.com/news/viewsr.html?pid=17943

STATUS REPORT

Date Released: Thursday, September 1, 2005
Source: Marshall Space Flight Center

NASA MSFC Solic****n: Additional Operations, Engineering, and Integration Work In Support of the Crew Launch Vehicle Project

Synopsis - Sep 01, 2005

General Information

Solici***n Number: NNM05128524Q
Posted Date: Sep 01, 2005
FedBizOpps Posted Date: Sep 01, 2005
Original Response Date: Sep 08, 2005
Current Response Date: Sep 08, 2005
Classification Code: R -- Professional, administrative, and mgmt support services
NAICS Code: 541710 - Research and Development in the Physical, Engineering, and Life Sciences

Contracting Office Address

NASA/George C. Marshall Space Flight Center, Procurement Office, Marshall Space Flight Center, AL 35812

Description

NASA/MSFC's Operations Integration Office has a requirement for additional operations, engineering, and integration work in support of the Crew Launch Vehicle (CLV) project. This work includes the development of the CLV Concept of Operations Document, Operations Timeliness, and Functional Flow Block Diagrams. This work is currently being performed by Computer Science Corporation (CSC) under NASA MSFC Purchase Order NNM05AB08P in conjunction with NASA MSFC personnel.

NASA/MSFC intends to contract with CSC for the proposed effort on a sole-source basis by awarding a modification to the current purchase order to add this work, which has an estimated period of performance by three months (October 01, 2005, through December 31, 2005).

Competition is impracticable for the following reasons:

1. The operation engineering and integration work supporting the CLV relies heavily upon the processes and technical expertise obtained by CSC during current operations; therefore, continuity in support from CSC is critical in order to meet the aggressive Systems Requirement Review (SSR) schedule.

2. Any disruption to schedules would adversely impact critical deadlines and potentially disrupt the SSR. Specific expertise gained in the prior months by CSC cannot be duplicated or communicated to another vendor in a timely manner; therefore, only CSC can provide necessary effort to support near term requirements without impacting the schedule.

3. The cost to bring another contractor up to speed would represent substantial duplication of cost to the government which is not expected to be recovered through competition.

The Government intends to acquire a commercial item using FAR Part 12.

Interested organizations may submit their capabilities and qualifications to perform the effort in writing to the identified point of contact not later than 4:00 p.m. local time on September 08, 2005. Such capabilities/qualifications will be evaluated solely for the purpose of determining whether or not to conduct this procurement on a competitive basis. ...

Posted by David Davenport at September 2, 2005 03:34 PM

David, if you want to "share" things, post a link to them. I really don't want to spend my disk space and bandwidth rehosting things that are already on line. Please confine your comments in the future to your comments, not pastes from other web sites. Particularly when you're changing the subject of a post. I suspect that Jeff Foust would appreciate this, too.

Posted by Rand Simberg at September 2, 2005 03:40 PM

Yea!

Posted by Sam Dinkin at September 2, 2005 09:38 PM

Similarly, if ice prices rise to the market, the man who needs to keep his insulin cold for his diabetes treatment will place a higher value on it than the man who wants to keep his beer cold, and will have a better chance of getting it.

In the first place, the diabetic does not place a higher value on ice because prices rise. The diabetic places a higher value on ice because the diabetic's life depends on it. The price has nothing to do with it.

In the second place, the diabetic having a greater desire for ice has a greater chance of getting it only if all else is equal. But all else is usually not equal. When there are large income (or net worth) disparities, a rich boozer may very well choose to keep his beer cold at the expense of a poor diabetic. That is in fact exactly what is happening. There were a lot of white folks in New Orleans a week ago. Now there are nearly none. Wherever they have gone I'll wager at least some of them have easy access to cold beer (to say nothing of insulin) if they want it.

The market does a good job at encouraging people to produce. It might even do a good job of allocating resources efficiently. But it does a lousy job of allocating them equitably.

Posted by Anonymous Coward #521 at September 3, 2005 01:03 AM

That was poorly phrased. I meant that, given high prices, since he did place a higher value on it, he would be more willing to pay the higher price.

The market does a good job at encouraging people to produce. It might even do a good job of allocating resources efficiently. But it does a lousy job of allocating them equitably.

The problem with non-market alternatives is that, while more "equitable" (which is itself a subjective term), they tend to make everyone equally poor, because the absolute amount of wealth is minimized, rather than maximized.

Posted by Rand Simberg at September 3, 2005 06:03 AM

I've never heard anyone use the term "equitably" in a way that didn't finally come down to "the way I want it to" in the end. Calling something "equitable" is simply dressing up your own personal preferences for how to run other peoples lives in some fictional aura of nobility and "Liberté, Egalité, Fraternité"...

So you can keep your "equitable" allocation: history has proven it is only provided by dictatorships and results in increased misery for all.

Posted by Michael Mealling at September 3, 2005 06:03 AM

The thing about charging more for stock on hand is to think about inventory as an investment. Do you pass up selling your stock in amazon.com at the market just because you bought it at the IPO for a fraction of what it's worth now? It's been sitting in your "inventory" the whole time, and by selling it now, you are passing it along to someone who values it at the market, and is willing to pay. If you buy new stock in another company with your "obscene profits", that stock will be bought at the market price again, not at its IPO price, too.

Price gougers canalso be the people who had the foresight to stock up, and are willing to take that risk for those who don't (or won't) do it themselves. If the storm passes without major power failures, that guy with a truck full of ice can't force you to buy it from him at $10 a bag or even $1 a bag, and eventually ends up with a truck full of water.

Posted by Raoul Ortega at September 3, 2005 09:52 AM

Those are both good points, Raoul, with the latter being an example of the risk for which he should be compensated. There was another one in the comments at TCS:

TCS is exactly the place I would expect to see an apologia for price gouging. Tell you what. I would suggest that every reader smacking his fist on the keyboard now and saying 'right on' go out, rent a truck and take a load of water down to New Orleans, where he can sell it for five bucks a jug. Conditions are right for an entrepreneur to take advantage of short supply and high demand right now.
Let him have a taste of how people in the real world deal with such market-driven slime.

Having to deal with anti-capitalist "slime" like him and those who think like him in "the real world" (he must be another one of those members of the "reality-based community") is another risk for which compensation would be justified.

Posted by Rand Simberg at September 3, 2005 10:16 AM

I've never heard anyone use the term "equitably" in a way that didn't finally come down to "the way I want it to" in the end.

I think most people share an intuition that if someone is able to keep a beer cold at the expense of someone's life that something is wrong.

The market works well to allocate non-necessities (like Amazon stock). But there are strong non-linearities that come into play at the fringes of survival that call for less facile solutions than lassez-faire.

Posted by Anonymous Coward #521 at September 3, 2005 10:35 AM

...there are strong non-linearities that come into play at the fringes of survival that call for less facile solutions than lassez-faire.

My article excluded situations "at the fringes of survival" (e.g., New Orleans right now). For those, you collectively get necessities of life in as quickly as possible. If someone wants to try to sell ice at high prices there when the government's giving it away, more power to them.

I was referring to gas prices in Atlanta, or New England (or even some of the hard-hit, but not devastated areas of Mississippi).

Posted by Rand Simberg at September 3, 2005 10:58 AM

I was referring to gas prices in Atlanta, or New England (or even some of the hard-hit, but not devastated areas of Mississippi).

Yes, I actually agree with your general thesis. (I'm often irritated by people ranting about how "outrageous" gas prices are.) I just think you chose a poor example (ice for beer vs insulin) to make your point.

Posted by Anonymous Coward #521 at September 3, 2005 11:58 AM

While I agree with your article in large part, there is a particular quibble I'd like to air, and that relates to the subject of "barriers to entry". Market pricing influences supply and demand to meet a reasonable equilibrium only under circumstances where both the supply and demand are free to change dynamically. As soon as either is constrained, odd effects can occur.

To the limited extent your "market-driven slime" friend has a point -- and I don't see much of one -- it is in cases where any average Joe *can't* publicly load up his truck with water and drive into town. While the first such truck may make a large profit, this signal would soon result in a fleet of trucks providing the desired water service much more reasonably. And this, of course, means that there is a premium for being "first", which speeds such aid to its recipients.

Only in cases with artificial restrictions on goods or information -- which are almost always created by government fiat -- can there be a continuous bout of "price gouging".

Posted by cthulhu at September 3, 2005 02:47 PM

It is my understanding that the Gas "gouging" has
happenend in places where the gas stations can't get more gas at any price.

So suppose I run a gas station.
I sell 20,000 gal a week and gross proffit is 20c per gal.
That's 4000/wk, now pay rent, insurance, payroll,
electricty etc... Maybe I net $400.00

Now we have a shortage I can only get 2000 gal.
I know that is all I'm going to get this week,
no matter what price I pay.

If I don't raise my prices significantly I loose
I'd have to raise my gas prices by more than 1.00
just to break even.

Yet even raising it $1.00 I'll have people at the end of the week that would be willing to pay +$2.00, yet I've sold all my gas.

I'm the owner of a scare commodity,the government should not be allowed to tell me how to run my business.

what other rationing scheme other than price is fair?

Posted by Paul Breed at September 3, 2005 03:05 PM

Exampes of greed paying off:

http://ww2.scripps.com/cgi-bin/archives/denver.pl?DBLIST=rm05&DOCNUM=20000

"Date: Saturday, September 3, 2005

Section: Commentary/Editorial

Page: 25B

Source: By Linda Seebach, Rocky Mountain News

Memo: Linda Seebach is an editorial writer for the News. She can be reached by telephone at (303) 892-2519 or by e-mail at seebach@RockyMountainNews.com.
COLUMN

Edition: Final

When oil prices last touched record highs - actually, after adjusting for inflation we're not there yet, but given the effects of Hurricane Katrina, we probably will be soon - politicians' response was more hype than hope. Oil shale in Colorado! Tar sands in Alberta! OPEC be damned!

Remember the Carter-era Synfuels Corp. debacle? It was a response to the '70s energy shortages, closed down in 1985 after accomplishing essentially nothing at great expense, which is pretty much a description of what usually happens when the government tries to take over something that the private sector can do better. Private actors are, after all, spending their own money.

Since 1981, Shell researchers at the company's division of "unconventional resources" have been spending their own money trying to figure out how to get usable energy out of oil shale. Judging by the presentation the Rocky Mountain News heard this week, they think they've got it.

Shell's method, which it calls "in situ conversion," is simplicity itself in concept but exquisitely ingenious in execution. Terry O'Connor, a vice president for external and regulatory affairs at Shell Exploration and Production, explained how it's done (and they have done it, in several test projects):

Drill shafts into the oil-bearing rock. Drop heaters down the shaft. Cook the rock until the hydrocarbons boil off, the lightest and most desirable first. Collect them.

Please note, you don't have to go looking for oil fields when you're brewing your own.

On one small test plot about 20 feet by 35 feet, on land Shell owns, they started heating the rock in early 2004. "Product" - about one-third natural gas, two-thirds light crude - began to appear in September 2004. They turned the heaters off about a month ago, after harvesting about 1,500 barrels of oil.

While we were trying to do the math, O'Connor told us the answers. Upwards of a million barrels an acre, a billion barrels a square mile. And the oil shale formation in the Green River Basin, most of which is in Colorado, covers more than a thousand square miles - the largest fossil fuel deposits in the world.

Wow.

They don't need subsidies; the process should be commercially feasible with world oil prices at $30 a barrel. The energy balance is favorable; under a conservative life-cycle analysis, it should yield 3.5 units of energy for every 1 unit used in production. The process recovers about 10 times as much oil as mining the rock and crushing and cooking it at the surface, and it's a more desirable grade. Reclamation is easier because the only thing that comes to the surface is the oil you want.

And we've hardly gotten to the really ingenious part yet. While the rock is cooking, at about 650 or 750 degrees Fahrenheit, how do you keep the hydrocarbons from contaminating ground water? Why, you build an ice wall around the whole thing. As O'Connor said, it's counterintuitive.

But ice is impermeable to water. So around the perimeter of the productive site, you drill lots more shafts, only 8 to 12 feet apart, put in piping, and pump refrigerants through it. The water in the ground around the shafts freezes, and eventually forms a 20- to 30-foot ice barrier around the site.

Next you take the water out of the ground inside the ice wall, turn up the heat, and then sit back and harvest the oil until it stops coming in useful quantities. When production drops, it falls off rather quickly.

That's an advantage over ordinary wells, which very gradually get less productive as they age.

Then you pump the water back in. (Well, not necessarily the same water, which has moved on to other uses.) It's hot down there so the water flashes into steam, picking up loose chemicals in the process. Collect the steam, strip the gunk out of it, repeat until the water comes out clean. Then you can turn off the heaters and the chillers and move on to the next plot (even saving one or two of the sides of the ice wall, if you want to be thrifty about it).

Most of the best territory for this astonishing process is on land under the control of the Bureau of Land Management. Shell has applied for a research and development lease on 160 acres of BLM land, which could be approved by February. That project would be on a large enough scale so design of a commercial facility could begin.

The 2005 energy bill altered some provisions of the 1920 Minerals Leasing Act that were a deterrent to large-scale development, and also laid out a 30-month timetable for establishing federal regulations governing commercial leasing.

Shell has been deliberately low-key about their R&D, wanting to avoid the hype, and the disappointment, that surrounded the last oil-shale boom. But O'Connor said the results have been sufficiently encouraging they are gradually getting more open. Starting next week, they will be holding public hearings in northwest Colorado."

And:

"Major Oil Discovery In Central Utah
LAST UPDATE: 5/4/2005 7:56:30 PM

SALT LAKE CITY (AP) -- Geologists are calling it a spectacular find in an unlikely place. A tiny oil company says there could be as much as one billion barrels of oil in central Utah.

Wolverine Gas and Oil has snapped up leasing rights to a half-million acres in a part of the state that major oil companies gave up on long ago. Geologists are calling it the largest onshore discovery in at least 30 years.

The area contains high-quality oil that is already commanding a premium at refineries. But some industry analysts have their doubts. Oppenheimer senior oil analyst Fadel Gheit calls the expectation of one billion barrels "highly unlikely."

Industry players expect the find will prompt a bidding war at the next Utah leasing auction in two weeks."

Posted by at September 3, 2005 06:54 PM

Few people seem to understand the utility of price gouging. Supply and demand work especially well when things get rough, because the first people to notice an impending shortage or changed utility are the buyer and seller.

This is also the time when normal distribution channels have been disrupted, and when normal distributers are busy with their own personal disasters. Out of normal human compasion most people will help those around them, but only a very few will normally assume great risk to establish themselves as a delivery network. If you allow profit to kick in, vastly more people devote themselves to filling any strange niche they hear about on the radio.

To put it bluntly, more gets done when saints and "sinners" are both trying to fill unmet needs. Eventually, most of those who've been giving things away either run out of stuff, being obviously short on cashflow, or finally decide that they've done their part, their conscience assuaged. Those still raking in money, however, will continue as long as the needs are unmet and meeting them is profitable. When filling those needs becomes only marginally profitable, it indicates that the normal distribution channels are once again in operation, as the system is self-correcting and self-limiting.

I need not point out that profit remains an incredible motivator even during the worst kinds of crisis, as evidenced by the rampant looters running around in New Orleans. Though shooting them is fine by me, you can't deny that they show tremendoust personal initiative in the face of adversity. Unfortunately they also don't show much sense, stealing beer they can't chill and big screen TV's they can't very well conceal on a bus ride out.

So let me take a bizarre look at criminal economics.

Instead of looting a shopping cart from a grocery store, some of them should've occupied the cash register and "opened for business", essentially acting like the mafia in restoring order and eliminating violence by establishing a temporary monopoly on it. If the role of store manager and clerk is abandoned, someone needs to take the helm, and the city was potentially full of willing Fletcher Christians who would seize the Bounty, The people would then have a safe place to shop, at either cut-rate or cut-throat prices, and either way much of the suffering would've been alleviated. A particularly enterprising criminal would've come up with a way to transport the contents of the city's food aisles all the way to the Superdome and convention center.

Others who showed foresight in stockpiling emergency supplies, and less bent on criminal enterprise, could've set up their little lemonade stands and BBQ tents, making money until driven out of business by the arrival of outside help, and using their high prices to limit secondary hoarding. I'm sure many would ask "what about the poor children?" Well, if I see a hungry crying child and hot-dogs are selling for $10, I'd still buy her one. The problem in a disaster isn't price, it's availability.

Posted by George Turner at September 3, 2005 09:06 PM

Mr. Simberg,

I get almost as angry when politicians demogogue price gougers as when they blame racism for bad weather! Thanks for the TechCentral article. All we can do is keep writing. I live in GA where the governor has signed an executive order against "price-gouging" and waived the state gas tax to ensure that supply meets demand (said with sarcasm). Every gas station in my area has been out of fuel since Thursday. Some of my favorite quotes from news coverage:
----------
The governor gave no specific examples of price gouging but said prices at some stations rose from $3 per gallon to $5 and $6 per gallon by Wednesday afternoon. He acknowledged consumers may not always know if they are being gouged as gas prices change. "You just have to report this and our Office of Consumer Affairs will investigate," he said.
----------
Cloud said it's difficult to say whether a retailer is gouging customers, since there is no price cap. But those who are accused of gouging may be forced to justify their price increases, Cloud said.
----------

Regards,
Ashley Tate

http://bilges.blogspot.com/2005/09/commissar-perdue.html

http://bilges.blogspot.com/2005/09/who-are-real-looters.html

http://bilges.blogspot.com/2005/08/gas-prices-need-to-rise-faster.html

Posted by Ashley Tate at September 3, 2005 09:23 PM

This reminds me of a column on rent control several years ago by Paul Krugman. (Yes, that Paul Krugman. He actually wrote some interesting essays before he was driven insane by Bush hatred.)

Inspired by an article about controls in San Francisco, he explained that such price restrictions are almost always counterproductive. It discourages new construction since apartment building developers/buyers see an artificial limit on their potential return. Similarly, apartment building owners are discouraged from improving their buildings and expanding them.

Shortages follow and so the current renters, who hang onto their places as long as they possibly can, benefit while those looking to move to a better place must wait forever for something to become available.

If rent control is lifted, prices will almost certainly spike upward but that is the enticement that brings on new construction. Eventually a surplus of apartments results and prices drop.

Krugman did an informal survey of economist friends of both liberal and conservative leanings and they almost all said rent control was a terrible idea.

But it doesn't matter. Rent control is nearly impossible to get rid of once implemented. SF and NY still have rent control and it's widely recognized that upper middle class renters have been the major beneficiaries of the system. They vote and they know how to fight efforts to remove the controls.

The article that inspired Krugman was about a renters group fighting a plan by the local government simply to sponsor a study of rent control policies. Since a new study, like all the previous ones, would inevitably show that rent control is stupid, the renters group didn't want it carried out.

- C.

Posted by Clark at September 3, 2005 10:46 PM

You know, if the commerce clause of the constitution can be used to halt state racial restrictions on renting hotel rooms, why can't it also be used to ban rent control? Interfering in the rental market interferes with the ability of workers to move to cities in other states, doesn't it?

Posted by Paul Dietz at September 4, 2005 06:05 AM

You know, if the commerce clause of the constitution can be used to halt state racial restrictions on renting hotel rooms, why can't it also be used to ban rent control?

Given the new expanse of the clause with Raich ruling, it's hard to imagine anything that the court doesn't think that the Commerce Clause allows (and replacing Rehnquist and O'Connor won't help, given that they were already on the angel's side of the issue). The problem is not the Constitution, but getting the Congress to pass such a law. I don't see it happening, politically, with the current crop of pols.

Posted by Rand Simberg at September 4, 2005 09:00 AM

The legal community- i.e. lawyers- seem to have gotten together at some point and decided their time is worth.... oh, what's your average lawyer charging these days? 600 - 800 per hour?
Is that 'price gouging?'
If I charged 600 - 800 per hour for engineering consultation, I'd be laughed out of the business; but if EVERY P.E. started charging that rate- people would just shrug and accept it. After all, a law degree is simply a glorified Masters and passing a test. Why should not one with an engineering Masters who has passed the P.E. test be paid the same?
I'm all for price gouging!

Posted by SpaceCat at September 4, 2005 01:52 PM

The people who could afford the price gouging have already left town. It's mostly the poor who remain and I don't blame them for raiding the Wal-Marts and the Walgreens. To hell with the price-gougers. I guess something as simple as merely helping out your fellow person in times of dire need is beyond the comprehension of most people. I can't help but wonder if we need a hurricane that'll take out the whole country, a new Noah's flood metaphorically speaking.

Posted by Guess at September 4, 2005 02:47 PM

"If I charged 600 - 800 per hour for engineering consultation, I'd be laughed out of the business"

Oh I wouldn't be so sure. Some of the aerospace lobbyists in DC charge $5000 per day.

Posted by Kevin Parkin at September 4, 2005 03:18 PM

Yeah, on second thoughts it's not really engineering. Oh well.

Posted by Kevin Parkin at September 4, 2005 03:20 PM

I was in Conn. this weekend and I saw a story about a Gas Station which put up a saign saying "Out of Regular. Only Premium", but the reporter was still able to pump regular. The owner said "we are ALMOST out, so I put up the sign", but I wasn't sure is he was telling the truth or just lying (besides, he admitted having 12300 gallons left, but that may not be much for his business volume). Assuming he was lying, would you consider that acceptable "price gouging" or would it be unacceptable manipulation? On one hand, no one is stopping people from trying regular at least, but on the other it still seems shady to lie like that. Either way I can't see how a real capitalist could oppose EXPOSING such practices so that consumers can boycott those businesses in the future.

Posted by at September 4, 2005 06:13 PM

make that 1200 gallons, I mistyped when I had 12300. 1200!!

Posted by olsenflizz@yahoo.com at September 4, 2005 06:14 PM

While I'm also a big fan of free market capitalism, the gas situation isn't really a typical market, at least not in the sense of operating by supply & demand. Just before Katrina struck, there were some news reports finally revealing that there was no shortage whatsoever. The wholesale market has climbed over the last many months based largely on the psychology of (mostly) erroneous news reports. Or perhaps that was a convenient excuse to raise prices. Either way, demand and price have been relatively independent.

That said, at least the $/barrel is reaching levels that have always been quoted as the levels where oil sands, oil shale, etc. are all becoming economically viable.

- Eric.

Posted by Eric S. at September 5, 2005 07:18 AM

$30/bbl. sounds pretty good to me. But I'm a bit suspicious about the reason for keeping it quiet.

I don't really understand how there can be a thing called price gouging. If I have property and I set a price at which I'm willing to sell it... why does the governments have ANY involvement???

I spent $13/gal. one time for 5 gals. of gas. Was I upset about it? You betcha. I was also glad to have it after following signs while in the mountains to two stations that were closed and soon on an empty tank. You can imagine my frustration when I arrived at the 2nd station, miles from the first. I was also glad to find a jerkwater restaurant with lousy food that had a payphone in it that worked so I could call a towing company for some gas.

I hate tow truck companies... but I'm glad some people see it as a business opportunity... which is what it is. I believe in capitalism and less goverment because I believe in myself, even when things don't look so bright.

Quit pointing fingers and get off your own asses.

Posted by ken anthony at September 5, 2005 10:04 PM

I think we need a change of tactics. Instead of saying gasoline has stocked out, we should say that because of the anti-gouging laws it is only available on the black market for $20/gallon.

Posted by Sam Dinkin at September 7, 2005 06:47 AM

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