The Department of Defense Office of Inspector General announced on Tuesday that Boeing overcharged the U.S. Air Force by almost $1 million for a dozen spare parts for the C-17 Globemaster III. The most egregious markup was 7,943 percent on an undisclosed amount of aircraft lavatory soap dispensers. Yes, the Air Force spent around $151,000 on soap dispensers that should have cost $2,000. In fairness to Boeing, it really needs the money right now.
While the Pentagon redacted both the number of marked-up soap dispensers purchased and the unit price in the publicly available version of its report, we can make an educated guess. According to Boeing, the Air Force currently has 223 C-17 cargo planes. There’s only one lavatory on every Globemaster, and it’s highly unlikely that the Air Force bought more than two spare dispensers per aircraft. The report understandably berates Boeing for overcharging the Air Force and the service’s officers for allowing it to happen:
“Boeing is responsible for being an effective agent of the Government when purchasing the spare parts, which includes obtaining fair and reasonable prices. The Air Force is responsible for providing surveillance during performance of the contracts to ensure Boeing uses effective cost control.”
I will never endorse indirectly ripping off taxpayers, but Boeing reported a $6.1-billion loss in its Q3 report. Production on most of its commercial planes has stopped due to an ongoing strike. The aerospace giant is considering selling its space division to Amazon founder Jeff Bezos and his private space venture Blue Origin to turn the company around. However, all of the problems impacting Boeing were caused by Boeing’s management.
