{"id":1730,"date":"2013-06-19T13:33:02","date_gmt":"2013-06-19T19:33:02","guid":{"rendered":"http:\/\/peaceeconomyproject.org\/wordpress\/?p=1730"},"modified":"2013-06-19T13:33:56","modified_gmt":"2013-06-19T19:33:56","slug":"boeing-told-to-repay-after-charging-2286-for-10-part","status":"publish","type":"post","link":"https:\/\/peaceeconomyproject.org\/wordpress\/boeing-told-to-repay-after-charging-2286-for-10-part\/","title":{"rendered":"Boeing Told to Repay After Charging $2,286 for $10 Part"},"content":{"rendered":"

By\u00a0Tony Capaccio, Bloomberg
\nclick here for original article<\/a><\/p>\n

The Pentagon\u2019s purchasing agency says\u00a0Boeing Co. (BA)<\/a>\u00a0must refund $13.7 million in excessive prices charged on spare parts, including a $10 device for which the defense contractor charged $2,286 apiece.<\/p>\n

The Defense Logistics Agency \u201cis seeking a refund from Boeing,\u201d spokeswoman Michelle McCaskill said in an e-mailed statement. \u201cThe refund will be for the full $13.7 million identified\u201d and will be requested by July 31, she said.\u00a0<\/span><\/p>\n

\n
\n
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A logo sits on a pilot’s seat in the cockpit of a Boeing aircraft on the first day of the Paris Air Show on June 17, 2013. Photographer: Chris Ratcliffe\/Bloomberg<\/p>\n<\/div>\n<\/div>\n

The agency overpaid about $1.3 million for 573 of the aluminum \u201cbearing sleeves\u201d used on an aircraft\u2019s main landing-gear door that should have cost $10 each, the Pentagon\u2019s inspector general said in an audit labeled \u201cFor Official Use Only.\u201d<\/p>\n

Wasteful spending resulted from agency personnel failing to negotiate good deals or to perform adequate oversight, and from Boeing\u2019s failure to pass on savings it won from subcontractors, according to the complete audit report.\u00a0A summary<\/a>\u00a0of the findings was reported by Bloomberg News on June 7.<\/p>\n

Boeing \u201chas been working with the Defense Logistics Agency\u201d and the inspector general \u201cthroughout the audit process,\u201d Ellen Buhr, a spokeswoman for Boeing\u2019s Global Services and Support unit, said in an e-mailed statement. \u201cWe are working with DLA to review the official report and to understand the issues identified.\u201d<\/p>\n

Second Time<\/h2>\n

The audit marks the second time in two years that the inspector general has cited excessive parts pricing by Chicago-based Boeing, the Pentagon\u2019s second-biggest contractor afterLockheed Martin Corp. (LMT)<\/a>\u00a0A May 2011 inspector general\u2019s audit of two Boeing contracts for an Army depot in Corpus Christi,\u00a0Texas<\/a>, found about $13 million in overcharges on $23 million in orders.<\/p>\n

The Pentagon has recovered $2.67 million in that case, according to Bridget Serchak, a spokeswoman for the inspector general\u2019s office. The Defense Contract Audit Agency is reviewing the contract to see if more refunds are in order, another spokeswoman, Army Lieutenant Colonel Elizabeth Robbins, said in an e-mailed statement.<\/p>\n

In the more recent audit, the inspector general took what it described as a \u201cnonstatistical sample\u201d of 60 spare parts on 2,659 delivery orders valued at about $81.1 million and found issues involving prices for parts on 1,469 orders valued at $27.2 million.<\/p>\n

The sample was part of almost 3,400 spare parts valued at about $142 million that the agency had purchased.<\/p>\n

Aircraft Parts<\/h2>\n

The excessive prices were found on a sample of parts requested under a 2009 \u201cbasic ordering agreement\u201d for components and assemblies used on B-1B and B-52 bombers, E-3 surveillance aircraft, KC-135 tankers, Minuteman nuclear missiles and AC-130U gunships.<\/p>\n

Boeing overcharged the Defense Logistics Agency\u2019s aviation unit the $13.7 million on 1,469 delivery orders after government personnel failed to negotiate \u201cfair and reasonable prices,\u201d according to the inspector general\u2019s audit.<\/p>\n

\u201cIf prices are not corrected, DLA Aviation will continue to overpay on future sole-source spare parts procured from Boeing,\u201d it said.<\/p>\n

Boeing \u201cdid not maintain complete cost and pricing data for 20 delivery orders valued at $3.4 million\u201d because of inadequate agency oversight, the inspector general found. The company issued internal guidance in December emphasizing the need to maintain adequate documentation, it said.<\/p>\n

In addition, inspectors found cases in which Boeing failed to pass on savings it obtained.<\/p>\n

Negotiating Prices<\/h2>\n

\u201cBoeing either negotiated for lower prices from its suppliers or obtained spare parts at lower prices from different suppliers,\u201d the audit found. The company \u201cis not required to notify\u201d the agency \u201cwhen the subcontractor changes its prices, and Boeing did not pass on any cost savings.\u201d<\/p>\n

In one example cited, Boeing in February 2008 cited a price of $8,474 each for a \u201ccontrol surface part kit\u201d that attaches to an aircraft\u2019s left elevator.<\/p>\n

Auditors obtained Boeing purchase orders indicating it paid about $4,080 for the kit, \u201cresulting in an overpayment of approximately\u201d $4,394 per kit — or about $1.2 million for 273 of them.<\/p>\n

Boeing charged the defense agency $17,628 apiece for a \u201cchannel\u201d engine structural support on the AC-130U gunship that company documents showed cost about $1,354 each, or an overpayment of more than $16,000, according to the audit.<\/p>\n

The logistics agency overpaid about $22,600 for two metal tube assemblies that cover aircraft engine struts. The Defense Logistics Agency accepted as \u201cfair and reasonable\u201d Boeing\u2019s proposed price of $12,467 each.<\/p>\n

\u201cBased on our review of Boeing\u2019s purchase order,\u201d the agency \u201cshould have paid a unit price of approximately $1,167,\u201d according to the audit.<\/p>\n","protected":false},"excerpt":{"rendered":"

By\u00a0Tony Capaccio, Bloomberg click here for original article The Pentagon\u2019s purchasing agency says\u00a0Boeing Co. (BA)\u00a0must refund $13.7 million in excessive prices charged on spare parts, including a $10 device for which the defense contractor charged $2,286 apiece. The Defense Logistics Agency \u201cis seeking a refund from Boeing,\u201d spokeswoman Michelle McCaskill said in an e-mailed statement. […]<\/p>\n","protected":false},"author":1,"featured_media":1731,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"nf_dc_page":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[8],"tags":[],"class_list":["post-1730","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"acf":[],"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/peaceeconomyproject.org\/wordpress\/wp-content\/uploads\/2013\/06\/images-4.jpeg?fit=137%2C168&ssl=1","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/1730","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/comments?post=1730"}],"version-history":[{"count":3,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/1730\/revisions"}],"predecessor-version":[{"id":1734,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/1730\/revisions\/1734"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/media\/1731"}],"wp:attachment":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/media?parent=1730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/categories?post=1730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/tags?post=1730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}