Boeing $13.7 Million Repay: Company Accused of Overcharging the Pentagon for Parts
The Pentagon has ordered a $13 million refund from the Boeing Co. after accusing it of overcharging for parts.
Addressing an audit conducted by the Pentagon's Inspector General, the Defense Logistics Agency has accused Boeing of overcharging for a number of spare parts. This is the second time in two years that an audit report of Boeing has resulted in accusations that the company is overcharging for parts.
The Defense Logistics Agency "is seeking a refund from Boeing," spokeswoman Michelle McCaskill said in an e-mailed statement to Bloomberg. "The refund will be for the full $13.7 million identified" and will be requested by July 31, she said.
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The agency's excessive spending was blamed on oversight by the department and Boeing's failure to pass on discounts it secured from other contractors.
Boeing "has been working with the Defense Logistics Agency" and the inspector general "throughout the audit process," Ellen Buhr, a spokeswoman for Boeing's Global Services and Support unit, wrote to Bloomberg in an e-mailed statement. "We are working with DLA to review the official report and to understand the issues identified."
Boeing has seen a continued improvement in the market over the past six months; stocks on Wednesday dropped only a couple of dollars from their opening mark of about $104. Boeing also introduced its new 787 Dreamliner at the Paris Air Show this week.
"The 787-10 is 25 percent more efficient than airplanes of its size today and more than 10 percent better than anything being offered by the competition for the future," said Boeing Commercial Airplanes Chief Executive Ray Conner in a statement.
The company also announced that customers have agreed to purchase at least 102 of the newer 787-10 models, which will hold more passengers than any of the previous models.
