Boeing has been found to have overcharged the Air Force by nearly $1 million for spare parts on C-17 cargo planes, with an 8,000% markup on items such as lavatory soap dispensers, as reported by the Pentagon's inspector general. The Defense Department's auditor reviewed prices paid for 46 spare parts on the C-17 between 2018 and 2022, identifying 12 as overpriced and nine as reasonably priced, while the fairness of prices on the remaining 25 items could not be determined.
The Office of the Inspector General initiated the review of soap dispenser prices following a hotline tip. Boeing has disputed the findings, stating that the comparison made in the report was inappropriate, as it compared prices of parts meeting aircraft and contract specifications with basic commercial items not qualified for use on the C-17.
The C-17 Globemaster, a key military cargo aircraft, played a crucial role in the evacuation efforts during the chaotic withdrawal from Afghanistan in August 2021, evacuating over 120,000 civilians fleeing the Taliban. Since 2011, Boeing has been awarded more than $30 billion in contracts by the U.S. government to supply necessary spare parts for the C-17, reimbursed by the Air Force.
Boeing, which has been grappling with financial and reputational challenges following the 2018 and 2019 crashes of its 737 Max aircraft, is facing further scrutiny. In July, the company agreed to plead guilty to a felony count of conspiracy to defraud the government related to the Max. Boeing's recent financial woes include a third-quarter loss exceeding $6 billion due to charges for various commercial, defense, and space programs.
The aerospace giant is currently dealing with a strike by 33,000 union machinists, now in its seventh week, impacting the production of 737s, 777s, and 767 freighters. The company has announced approximately 17,000 layoffs and plans to issue new stock to raise up to $19 billion to address its debt-heavy balance sheet.
