WASHINGTON — WASHINGTON (AP) — Boeing has overcharged the Air Force by nearly $1 million for spare parts for C-17 cargo planes, including an 8,000% surcharge for basic toilet soap dispensers, the Pentagon’s inspector general said.
The accountant of the Ministry of Defense revised prices paid for 46 spare parts for the C-17 from 2018 to 2022 and found that 12 were overpriced and nine were reasonably priced. It could not determine the fairness of the prices for the other 25 items.
The Office of the Inspector General said it had revised the prices of the soap dispensers after receiving a tip from the hotline.
Boeing disputed the findings.
“We are reviewing the report, which appears to be based on an incorrect comparison of prices paid for parts that meet aircraft and contract specifications and designs versus commercial commodity items that would not be qualified or approved for use on the C-17,” Boeing said in a statement: “We will continue to work with the OIG and the U.S. Air Force in the coming days to provide a detailed written response to the report.”
The C-17 Globemaster is one of the military’s largest cargo aircraft. It can transport several military vehicles, large pallets of humanitarian supplies or, in extreme conditions, hundreds of people. The Air Force flew C-17s nonstop for two weeks during the hectic withdrawal from Afghanistan in August 2021. evacuating more than 120,000 civilians fleeing the Taliban.
Since 2011, the U.S. government has awarded Boeing more than $30 billion in contracts to purchase necessary spare parts for the C-17 and be reimbursed by the Air Force.
Boeing is still trying to recover from the financial and reputational damage caused by two fatal accidents in 2018 and 2019 from its best-selling aircraft, the 737 Max.
This has been one particularly volatile year for the aerospace giant. It came under renewed scrutiny and federal investigation after a door plug flew off a 737 Max an Alaska Airlines flight in January. Federal regulators restricted Boeing’s production of the plane.
In July, Boeing agreed plead guilty to a misdemeanor count of conspiracy to defraud the government for misleading regulators who set pilot training rules for the Max. That plea deal is pending before a federal judge in Texas.
Boeing is its third CEO in five years, after hiring an outsider who joined the company in August. Last week, Boeing reported a third-quarter loss of more than $6 billion due to costs for various commercial, defense and space programs.
A strike by 33,000 union engineers is now seven weeks old and has crippled production of the 737s, 777s and 767 freighters, halting much-needed cash. New CEO Kelly Ortberg has announced about 17,000 layoffs, and the company will issue new shares to raise up to $19 billion to shore up its debt-laden balance sheet.
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Koenig reported from Dallas.