Boeing Routinely Overcharges Pentagon, Robbing Taxpayers Blind

John Glaser, October 22, 2013


The Pentagon’s inspector general found defense contractor Boeing deliberately overcharged for military equipment four times in the past five years, according to Bloomberg News.

In 2008, for example, Boeing charged an extra $16.6 million on a $4.4 billion CH-47F Chinook Helicopter contract by invoicing new and updated parts while “primarily install[ing] used parts instead.”

This past June, Boeing got paid “$13.7 million more than it should have for spare parts, including $2,286 a piece for an aluminum ‘bearing sleeve’ that should have cost $10.”

“A May 2011 audit found about $13 million of overcharges on $23 million of orders from a Texas army depot,” Bloomberg adds. “That report said Boeing charged $644.75 for a plastic motor gear used on Chinook helicopters, which another Pentagon agency purchased for $12.51.”

The latest July audit found that Boeing charged $2.6 million for 142 Chinook engine transmission housings that the Pentagon didn’t even need.

The Army, Bridget Serchak, a spokeswoman for the inspector general, told Bloomberg, paid Boeing for parts “that were proposed but never installed,” and “is paying for additional parts that they do not need and may not use.”

This is a regular feature of the military industrial complex, as the infamous Reagan-era story of the $400 hammer the Pentagon paid for illustrates. In any other environment, if a company charged you $2,286 for something that you could get elsewhere for $10, that company would either go out of business or quickly slash its prices. But in this system, there is no downward pressure on prices, and the defense corporations have a hold on the politicians, so there won’t be anything done about this egregious profligacy.

As I wrote last week, even when there aren’t deliberate overcharges, the Pentagon is often forced to pay for weapons and equipment that military leaders say they don’t want or need.

And we’re all supposed to believe the defense budgets have been cut too much.

8 Responses to “Boeing Routinely Overcharges Pentagon, Robbing Taxpayers Blind”

  1. "Boeing Robbing Taxpayers Blind", "according to Bloomberg News". Pretty serious stuff, John. People or firms who rob taxpayers blind are generally charged, convicted and sentenced in a court of law. How are the legalities proceeding, John? Convictions? Indictments? No and no? Mercy on us. Something else -it seems you've neglected to mention a minor issue in your report, John: what does the Boeing Co. have to say about these dastardly taxpayer ripoffs? It's not important ..I know. Just curious. Have a great day John.

  2. Turn on some corporate TV news and you'll find out pretty quick that Boeing has no recollection of the events in question, but if they did occur, there will be an investigation and those responsible will be treated accordingly. :) Nothing to see, here. They promise.

  3. The vulture capitalism at work.

  4. Applying for a boeing spokesperson position?

  5. [...] Boeing Routinely Overcharges Pentagon, Robbing Taxpayers Blind [...]

  6. Boeing has some very good lawyers.

  7. So, obviously, you didn't bother to follow the link to the Bloomberg article where it clearly reports that Boeing “disagrees with the IG’s conclusions,” and were "…fully compliant with all government contract policies and guidance…"

    And no, "…People or firms who rob taxpayers blind" are not generally charged, convicted, and sentenced…they are, if caught, are usually slapped on the wrist with a fine, but rarely is anyone tried and convicted – nor is the contract usually terminated and the work stopped. But, that's not John's fault though you try and make it so.

  8. You asked: "what does the Boeing Co. have to say about these dastardly taxpayer ripoffs?"

    I answer: "haha and we'll just keep doing it."

    If you really think that a firm in the MilIndComp wouldn't rip taxpayers off, then you sir are a moron. Might I recommend Dwight Eisenhower's farewell address? After that, study rent-seeking and war profiteering. Afterwards, you may just be less of a moron.