Boeing overcharged the US Army by $13 million on a sample of 18 high-dollar parts for the CH-47 Chinook, according to a military investigation.
The full report on Boeing's charges for Chinook parts at the Corpus Christi Army Depot has not been released, but a summary of the inspector general's findings on 3 May is critical of the management of the performance-based logistics deal.
Auditors sampled 24 parts covered under the contract. Boeing's prices for 18 of the parts exceeded "fair and reasonable" standards, including almost $1,680 for a ramp gate roller assembly that costs $7.71 in another agency, the inspector general said.
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Overall, Boeing charged the army $23 million for the 18 parts, just over 131% higher than the inspector general considered reasonable.
Boeing said it is co-operating with the investigation and defended its pricing on the CH-47 contract that covered 8,000 parts.
"The handful of errors cited by the IG's initial report represents an extremely small part of our outstanding support to our US Army customer," Boeing said. The company has refunded about $1.6 million to the service based on the investigation's findings so far.
Boeing also noted that turnaround times for repairing CH-47 parts improved by 43% compared with the depot's management process.
The inspector general, however, said the claimed improvement in repair turnaround times was 46%, but that number is inaccurate. The actual improvement ranged between 26.1% and 36.9%, it said.
The inspector general also faulted the army for buying parts from Boeing in the first place, noting that the Department of Defense should first have tapped an existing stockpile worth between $242 million and $277 million.
Source: Flight International
