An anonymous reader writes
"In a letter to Senator Grassley of the Senate Judiciary Committee, NASA 'admits the agency was selling jet fuel at below market rates to H2-11, a company owned by the founders of Google.' The agency has since raised its rates to reflect market prices but has informed the Senator that it would be impossible for NASA to recoup the money that tax payers have paid in order to subsidize Google's jet fuel discounts."
Re:Why
By sumdumass
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2014-Mar-7 22:50
• Score: 5, Informative
• Thread
The fuel wasn't surplus. But the problem was altogether different.
An audit was conducted concerning Google's aircraft being stored that the ames facility. It turns out that they lease a hangar from NASA as market rates but also allow their aircraft to be used by NASA for Earth Science projects.
http://oig.nasa.gov/Special-Re...
In the course of this, the supplier of fuel for the site charges a market rate for everyone but NASA who gets charged a cost plus rate. NASA had them fueling the aircraft (which is more then just their jet) on the cost plus rate for the NASA projects but an oversight happened and they ended up being charged cost plus for everything including private non-government flights. The audit doesn't place blame or malice in it and writes it off as a misunderstanding. The letter in the article is confirmation that NASA was doing it, didn't have anything in place to detect it, cannot go back and fix it, but have that all taken care of now and the separate rates will be applied appropriately.
Re:Red Herring
By kqs
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2014-Mar-7 23:12
• Score: 4, Informative
• Thread
From what I have heard, some years ago the government cut funding to NASA and told them "you need to have public/private partnerships to make money".
As part of this initiative, NASA leased part of AMES which they were not using to Google (for quite a lot of money), and did a deal where they could use planes for NASA science missions. Note that they didn't do this because they wanted to; they did this because the US govt told them to do this sort of thing.
So Google got preferential treatment by... renting excess space at market rates. A good deal for Google since it is close to their headquarters, and a good deal for NASA because they could continue doing science even when Congress cut their funding.
I suspect that if Apple, Cisco, and Facebook had wanted to pay the same market rates then they could have also leased space at AMES, though since that is a farther distance from their headquarters (especially with Bay Area traffic) it would be less tempting to them.
Re:Not a subsidy?
By sumdumass
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2014-Mar-7 23:18
• Score: 5, Informative
• Thread
It doesn't appear to be. It seems that it is a complete misunderstanding by the fuel company. From the audit,
"We found that a misunderstanding between Ames and DLA-Energy personnel rather than intentional misconduct led to H211 enjoying the discounted fuel rate for flights that had no NASA-related mission. From September 2007 until August 2013, H211 purchased fuel at Moffett from DLA-Energy either directly or through NASA for both its personal (non-NASA related) flights and NASA science flights at a rate intended only for government agencies and their contractors. Even though Ames officials accurately reported to DLA-Energy the nature of the Centerâ(TM)s agreement with H211, DLA-Energy misunderstood that H211 was drawing fuel for both private and NASA-related missions."
The audit also says that the h211 company has flown over 200 missions for NASA at no cost to NASA and as a result of the misunderstanding, H211 paid between 3.3 and 5.3 million less than market rate for fuel in the time frame because of it. It's a pretty interesting read once you start into it.
Re:They sold it at cost?
By JakartaDean
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2014-Mar-7 23:38
• Score: 5, Informative
• Thread
You have the mentality of a peasant. Whatever the nobles do, it must be OK because they would never take advantage of their position at your expense. They're so much more deserving then you.
Let's use a car analogy: suppose that you buy gas at the same station that Google execs do. They get charged the rate that the gas costs at the refinery, and you pay retail. Their gas is 25% cheaper (made up value) then yours. You have to pay for shipping costs, infrastructure costs for the service station (electricity, upkeep), the salaries of everyone involved between the refinery and the pump, etc. All that stuff has to be paid for to get the gas to the pump, so you are subsidizing their gas.
Except it's not a private company selling the gas, it's government services paid for by your taxes.
+5 Insightful? I could see +5 Vituperative, but your post lacks both insight and manners. Rather than calling him a peasant, why didn't you spend time reading the linked letter and article widely cited above? NASA says, for example, "While we concluded that the fuel arrangement between Ames and H211 did not result in an economic loss to NASA or DLA-Energy..." The cost H211 paid was the fully loaded cost. Go look that up in an management accounting text. There were no government services paid for by anyone's taxes. The price they paid was below market rates -- at the time the deal was signed all fuel was provided by DoD and sold at subsidized price (DoD craft) or fully loaded cost (non-DoD craft, including the H211 craft that NASA sometimes used). Here's a flash for you: sometimes these craft just flew in the air, so they didn't have the option of going to another "gas station" down the road -- Moffet Field was the only game in town for NASA, and was often convenient for H211 folks. Cost recovery is the default option for charges at most airports, and managers are very good at calculating fully loaded costs.
The problem is that H211 was getting a better deal than other craft at other airports in the area, not that the government or taxpayer was losing money. Given how much NASA was saving by having easy access to H211's aircraft, everyone was winning. However, NASA decided it looked bad, so to avoid any allegations of impropriety (like yours), it was in the government's interest to collect market rates and pass the profit on to the Treasury, so they've been doing that since September 2013. Mr. Schmidt's compensation is irrelevant.
Re:Not a subsidy?
By camperdave
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2014-Mar-8 00:42
• Score: 4, Interesting
• Thread
NASA's Moffett field is only a ten minute from Google Headquarters. H2-11 is paying $108,000+ a month to rent hangar space at the airport PLUS NASA gets to use the aircraft for science missions. That's $1.3million per year plus an obligation to fly science missions for NASA. When they're fuelling up at Moffett, they pay full price for the only fuel available: non-taxed government fuel. I don't see the problem. Any other civilian organization could have organized similar arrangements. This isn't any sort of "billionaires only" club. Essentially it's no different than civilian workers eating government chow at Federal cafeterias.