Boeing Overcharged U.S. Army $13M: IG Report

28 Jun 2011 By MICHAEL HOFFMAN DefenseNews

Boeing overcharged the U.S. Army $13 million on spare parts that Army officials could have purchased from the Defense Logistics Agency (dla), according to a Department of Defense Inspector General report released on the Project on Government Oversight's website.

In one case, Boeing charged the Army $71 for a straight pin that would have cost the service 4 cents if the service had bought the same part from DLA, according to the report.

The Army's Aviation and Missile Life Cycle Management Command bought the 18 parts highlighted in the report, which made up the $13 million in overcharges. Soldiers and civilians used the parts at Corpus Christi Army Depot, Texas.

Boeing charged the Army $1,626.49 for a roller assembly not much larger than the size of a coin. If the Army had bought it from DLA, it would have cost $10.25.

In another example, the report highlighted how Boeing charged $381.78 for a bolt retainer for which the DLA charges $6.77.

The Corpus Christi Army Depot is a maintenance center used mainly for Army helicopters. A similar audit is taking place concerning purchases made for the same depot from Sikorsky Aircraft, according to the report.

After the Defense Department IG released the report, Boeing issued the Army a voluntary refund of $1.6 million for six types of parts, a Boeing official said.

"The handful of errors cited by the IG's initial report represents an extremely small part of our outstanding support to our U.S. Army customer," said Bob Algarotti, a Boeing spokesman. "Boeing voluntarily reimbursed the government for the items cited and already improved our process, which will prevent reoccurrence of these errors."

Boeing builds the Army's AH-64 Apache attack helicopter and the CH-47 Chinook twin-rotor utility helicopter.

The Army had not replied to a call for comment as of 1 p.m. June 28.