It's not even close to that cheap for an S1.  Bitmain has them for $2.59 per GH as of right now.  PBMining is mining at $2.20 per GH.  You're saying that PBMining worked out some kind of deal that got them a price lower than that, that factored in the 1100watts per unit power charge and somehow gives them a profit that pays for the management of this operation for a bunch of full time workers? 

Use your head.  It's a scam.