Boeing Told to Repay After Charging $2,286 for $10 Part

[Judi Lynn]

Source: Bloomberg News

Boeing Told to Repay After Charging $2,286 for $10 Part
By Tony Capaccio - Jun 19, 2013 10:30 AM CT

The Pentagon’s purchasing agency says Boeing Co. (BA) must 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 “is seeking a refund from Boeing,” spokeswoman Michelle McCaskill said in an e-mailed statement. “The refund will be for the full $13.7 million identified” and will be requested by July 31, she said.

The agency overpaid about $1.3 million for 573 of the aluminum “bearing sleeves” used on an aircraft’s main landing-gear door that should have cost $10 each, the Pentagon’s inspector general said in an audit labeled “For Official Use Only.”

Wasteful spending resulted from agency personnel failing to negotiate good deals or to perform adequate oversight, and from Boeing’s failure to pass on savings it won from subcontractors, according to the complete audit report. A summary of the findings was reported by Bloomberg News on June 7.


Read more: http://www.bloomberg.com/news/2013-06-19/boeing-told-to-repay-after-charging-2-286-for-10-part.html

[DeSwiss]

1. Wonder how much time I'd get......

...if I, not a corporate person, stole $13.7 million dollars from the feds.

- Think they'd let me off with probation? Home arrest?

K&R

[James48]

2. What I want to know is....

why an Inspector General's report is labled "for Official Use Only" FOUO.


That's wrong.

[James48]

3. This is wrong-

It is clearly a misuse of authority to mark this document "For Official Use Only".

It does NOT meet the criteria spefically outlined in Department of Defense criteria.

Journalists should FOIA this report and put it on the net.

The criteria is supposed to be what is found here;

http://www.dtic.mil/whs/directives/corres/pdf/520001_vol4.pdf

[bemildred]

4. SOP. 125% is a "reasonable" markup on just about anything in defense.

"Cost" plus 80-100% "overhead" plus 10-15% "G&A" and similar "profit", they are often GUARANTEED a certain percentage "profit" which is just added on top like a cherry. The actual profit, of course, is much higher. Record keeping was often quite sloppy too, because nobody checks. That's from the 90s. I doubt the overall effect has gotten worse for the defense bidness.

Keep in mind that when they talk about "overruns", they are talking about the total number, not the "Cost" you start with.

[xtraxritical]

5. "Wasteful spending resulted from agency personnel failing to negotiate good deals or to perform

adequate oversight." That's what the "revolving door" of government/corporate employees gets you.