Executive Briefings

The Tale of the Supplier (Boeing) Who Sold the Shipper (the Pentagon) Old Parts But Charged for New Ones

Four times in the last five years, the Pentagon's inspector general has found that Boeing Co. collected excessive or unjustified payments on U.S. defense contracts. In the latest of four audits since 2008, the watchdog office said the Chicago company charged the Army for new helicopter parts while installing used ones.

The Tale of the Supplier (Boeing) Who Sold the Shipper (the Pentagon) Old Parts But Charged for New Ones

"Boeing significantly overstated estimates" of new components needed for CH-47F Chinook helicopters and "primarily installed used parts instead" under a $4.4bn contract awarded in 2008, according to the report, labeled "For Official Use Only".

Although used parts were allowed in some circumstances, the July 16 report found that the company overcharged the U.S. Army by as much as $16.6m by exaggerating how many new ones were required while installing refurbished equipment salvaged from old aircraft. The report also faults defense agencies and military services for lax negotiations and contract management.

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"Boeing significantly overstated estimates" of new components needed for CH-47F Chinook helicopters and "primarily installed used parts instead" under a $4.4bn contract awarded in 2008, according to the report, labeled "For Official Use Only".

Although used parts were allowed in some circumstances, the July 16 report found that the company overcharged the U.S. Army by as much as $16.6m by exaggerating how many new ones were required while installing refurbished equipment salvaged from old aircraft. The report also faults defense agencies and military services for lax negotiations and contract management.

Read Full Article

The Tale of the Supplier (Boeing) Who Sold the Shipper (the Pentagon) Old Parts But Charged for New Ones