Fort Wayne, Indiana
What Happened to the Grace Commission?
Carl D. Rolfsen
February 16, 1990
LET ME BEGIN WITH A STORY ABOUT THE $7 HAMMER !
One day the U.S. Navy decided to buy a hammer, the kind you buy
for $7 at the corner hardware store. However, the navy couldn't go to
the corner hardware store because it had procedures and regulations to
follow. Since the navy wanted the hammer, it proceeded by complying
with its mandated procedures and regulations. In addition to the $7,
the Navy incurred the following costs.
* $41 to order the hammer and figure out how to use it.
* $93 to make sure the hammer worked.
* $102 for "manufacturing overhead."
* $37 to make sure there were spare parts for the hammer.
* $3 for packing the hammer for shipment.
* $90 for the contractor's "general administrative costs."
* $56 for the finder's fee.
* $7 for the "capital cost of money."
The U.S. Navy ended up buying a $7 hammer for $436, and who paid for
it? You and I did - of Course !
This is one example of waste found by the Grace Commission. Then
there is the story about the 60 cents light bulb for which the navy
paid $511. Or how about the 5 cents aircraft simulator part for which
the navy paid $100. These incredible, but true, examples of government
waste and inefficiency are only three examples of the many described in
a book written by J. Peter Grace, Chairman of the President's Private
Members of the Quest Club authorize the Allen County Public Library to digitize and publish past, present and future Quest Club papers for dissemination on the Allen County Public Library website (Board of Directors of Quest Club, Inc., Resolution of May 2010).