{"id":3239,"date":"2014-07-09T13:26:48","date_gmt":"2014-07-09T19:26:48","guid":{"rendered":"http:\/\/peaceeconomyproject.org\/wordpress\/?p=3239"},"modified":"2014-07-09T13:26:48","modified_gmt":"2014-07-09T19:26:48","slug":"pentagon-found-to-pay-textron-unit-8124-for-a-445-gear","status":"publish","type":"post","link":"https:\/\/peaceeconomyproject.org\/wordpress\/pentagon-found-to-pay-textron-unit-8124-for-a-445-gear\/","title":{"rendered":"Pentagon Found to Pay Textron Unit $8,124 for a $445 Gear"},"content":{"rendered":"

by Tony Capaccio and Jonathan D. Salant, Bloomberg
\nclick here for original article<\/a><\/p>\n

The Pentagon paid\u00a0Textron Inc. (TXT)<\/a>\u2019s Bell Helicopter unit $8,123.50 each for gears that should have cost $445.06, according to\u00a0a report<\/a>\u00a0by the Defense Department\u2019s inspector general.<\/p>\n

The bevel gears that were marked up 18-fold were part of $9 million in excess payments by taxpayers cited by the watchdog office.<\/p>\n

This is the latest case in which the inspector general said Pentagon agencies allowed contractors to overcharge for parts. For decades, the Defense Department has periodically been the subject of ridicule from lawmakers, and even late night comedians, after reports of inflated prices for items such as a coffee pot and toilet seat.<\/p>\n

In the Bell case, the inspector general recommended that the\u00a0Defense Logistics Agency<\/a>\u00a0seek to recoup the excess money and analyze prices to ensure taxpayers aren\u2019t further overcharged. Otherwise, the excess payments may increase by an additional $2.6 million under Bell\u2019s noncompetitive contract, the report found.<\/p>\n

\u201cThe contracting officer did not sufficiently determine whether prices were fair and reasonable,\u201d according to the July 3 report, signed by Jacqueline Wicecarver, assistant inspector general for acquisition. The report, obtained by\u00a0Bloomberg News<\/a>, was labeled \u201cFor Official Use Only.\u201d<\/p>\n

 <\/p>\n

Bell Helicopter \u201cdoes not agree with the findings or recommendations,\u201d Andy Woodward, a spokesman for the unit of Providence, Rhode Island-based Textron, said in a statement.<\/p>\n

\u201cBell Helicopter has fully complied with all applicable regulations, and continues to adhere to its policy, which ensures that the U.S. Government consistently receives the best price on commercial items acquired for its use,\u201d he said.<\/p>\n

\u2018Noncompetitive Environment\u2019<\/h2>\n

The alleged overcharges were incurred on Bell\u2019s 2012 sole-source, $128 million contract to support Navy and Marine Corps H-1 and Army OH-58 Kiowa helicopters. The contract is in place until February 2017.<\/p>\n

\u201cPrices were not sufficiently determined fair and reasonable because the contracting officer did not perform an adequate analysis when procuring sole-source\u201d parts, accepting the company\u2019s pricing \u201cin a noncompetitive environment,\u201d the inspector general\u2019s report found.<\/p>\n

The agency \u201cpotentially overpaid Bell Helicopter Textron about $9 million out of $13.4 million on 33 of 35 sole-source spare parts\u201d reviewed, Wicecarver wrote.<\/p>\n

Auditors for the inspector general calculated the potential overpayments based on cost data that Bell Helicopter provided under an administrative subpoena, according to the report.<\/p>\n

Cost Data<\/h2>\n

In response to the inspector general\u2019s recommendation that the Defense Logistic Agency pursue options including a voluntary refund from Bell, Matthew Beebe, the agency\u2019s director of acquisition, told auditors that \u201cBell has consistently refused to provide cost data for commercial parts\u201d it sells the Pentagon.<\/p>\n

Agency officials do \u201cnot believe they have the ability to obtain cost data,\u201d the report said.<\/p>\n

In June 2013, the Defense Logistics Agency asked\u00a0Boeing Co. (BA)<\/a>, based on another audit, to refund $13.7 million for what it called excessive prices for spare parts, including a $10 aluminum sleeve for which the Pentagon paid $2,286.<\/p>\n

Chicago-based Boeing this year agreed to provide the agency with $3.2 million in parts to settle the case.<\/p>\n

\u2018Inflated\u2019 Price<\/h2>\n

The Bell audit found that the Defense Department paid the company $2,355.85 for a round inner cap — an \u201cinflated unit price that should have been $297.08.\u201d In another case \u201cBell proposed and DLA accepted a unit price of $492.17\u201d for a $51.67 pin.<\/p>\n

Bell Helicopter also charged the agency $295.57 apiece for one-inch bushings the inspector general determined should have cost an average $25.72 each.<\/p>\n

The\u00a0Defense Logistics Agency<\/a>\u2019s Beebe said in his written response to the report that the agency followed \u201ccurrent commercial contracting procedures and pricing methodology\u201d and paid 35 percent less than the company charged commercial customers.<\/p>\n

The deal with Bell also provided for additional price cuts if commercial customers were charged less for the same item, Beebe said.<\/p>\n","protected":false},"excerpt":{"rendered":"

by Tony Capaccio and Jonathan D. Salant, Bloomberg click here for original article The Pentagon paid\u00a0Textron Inc. (TXT)\u2019s Bell Helicopter unit $8,123.50 each for gears that should have cost $445.06, according to\u00a0a report\u00a0by the Defense Department\u2019s inspector general. The bevel gears that were marked up 18-fold were part of $9 million in excess payments by […]<\/p>\n","protected":false},"author":1,"featured_media":0,"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-3239","post","type-post","status-publish","format-standard","hentry","category-news"],"acf":[],"aioseo_notices":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/3239","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=3239"}],"version-history":[{"count":1,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/3239\/revisions"}],"predecessor-version":[{"id":3241,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/posts\/3239\/revisions\/3241"}],"wp:attachment":[{"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/media?parent=3239"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/categories?post=3239"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/peaceeconomyproject.org\/wordpress\/wp-json\/wp\/v2\/tags?post=3239"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}