Boeing Accused of Overcharging the Air Force

The Department of Defense Office of Inspector General has accused Boeing of significantly overcharging the Air Force for C-17 aircraft spare parts. Among these allegations is a price increase of 7.943% for soap dispensers. A report published on Tuesday details that approximately $1 million was overpaid for various spare parts.

According to Inspector General Robert Storch, the Air Force paid $149,072 for an unspecified number of soap dispensers from Boeing. Storch emphasized that the Air Force needs to improve its internal controls to prevent future overpayments for the remaining duration of the contract, which will extend until 2031. He warned that such overpayments could reduce the number of spare parts that can be purchased under the contract and potentially affect the readiness status of the global C-17 fleet.

In response to the audit findings, Boeing stated on Tuesday that they are reviewing the report. The company suggested that the report may be erroneous, claiming that there was an "inappropriate comparison" made between the prices of military-specific parts and those of basic commercial products that do not meet requirements for C-17 usage. Boeing also noted that the parts in question were significantly modified to comply with military specifications, adding that they plan to provide a detailed written response soon.

This issue of overpricing is not an isolated incident, as the Pentagon's budget exceeded $900 billion last year, and overpricing by defense contractors has proven to be a recurring challenge for internal auditors. The report also criticized the Air Force for lacking a historical pricing database, not obtaining supplier bids, or being unable to identify commercially similar parts. This has resulted in an inability to determine whether fair prices were paid for spare parts valued at $22 million.