Boeing charged the Army excessive prices for helicopter spare parts, including $644.75 for a tiny black plastic motor gear that cost another Pentagon agency $12.51, according to a report by the Defense Department’s inspector general.
Boeing earlier this year refunded $556,006 on the “spur gear” after an audit draft was issued. The second-largest defense contractor issued an additional $76,849 refund to the Army for a dime-sized, plastic “roller assembly” that costs $7.71; Boeing charged the Army $1,678.61 apiece. Both are installed on the CH-47 Chinook helicopter.
The refunds were among $1.6 million that Boeing made during the auditing phase or after the draft was issued. The audit cites excessively priced parts or costs based on pricing data that weren’t current, complete or accurate from Boeing’s two Corpus Christi, Texas, Army depot contracts valued at about $970 million. The initial award of the contract was made in June 2004.
The Army also is failing to tap as much as $277 million in excess inventory maintained by the Defense Logistics Agency that costs less in many cases, the audit said.
“Anytime we see indications that DOD is paying inflated prices for parts that it already has in inventory, we are concerned,” said Deputy Inspector General for Auditing Daniel Blair.
Boeing Global Services & Support spokesman Bob Algarotti said, “We are cooperating fully with every aspect of the audit. . . . The handful of errors cited by the IG’s report represents an extremely small part of our outstanding support to our customer.”
