Boeing denies claims it ripped off the Army
A report says the company overcharged the government by as much as $16.6 billion by using more used parts than expected.
By William White
The claims that Boeing overcharged the U.S. Army for helicopter parts come from a report made by one of the Pentagon's inspector generals.
The report states that Boeing overestimated how many new parts it would use in the construction of 181 CH-47F Chinook helicopters under a five-year contract. It also claims that Boeing used more used parts than what it had estimated.
Boeing disagrees with this report, instead claiming that it complied with the contract and that it adjusted its proposal for a second five-year contract. According to industry experts, the fixed price contracts were carefully negotiated between the company and the government. Both the government and Boeing took a risk with the contract. If Boeing had gone over on the cost to create the helicopters, then it would have had to handle the extra cost on its own, reports Reuters.
The inspector general's report didn't advise the Army to seek a refund for overcharges because it's unlikely that there is a legal basis to do so, but it did suggest that Boeing could voluntarily refund the overcharges.
More from InvestorPlace
I would have thought the upper General's or Admirals would have caught this.. BUT as always, there is under the table $$$$$$$$$$$ and to hell with us..................
Capitalist companies wouldn't screw our government would they? Oh of course not ;) ;) nudge nudge
I guess capitalist loyalists don't know about how much Halliburton gouged the government in Iraq. The wasted spending is mostly from contracts to corporations not internal spending.
What I still don't get is the same people that say to cut foreign aid and help out here, say that when we try to help out at home it's wrong.... It doesn't make sense.
$7.4 to 16.6 million against $4.4 billion? That is 0.168 to 0.377%. Boeing should be congratulated for meeting obligations. NO DOUBT they would NOT HAVE been paid an extra $7.4 -$16.6 million if it exceeded $4.4 billion.
IG was correct in noting this and Boeing was correct to include change in renewed contract.
Clearly, defense hardware expenditures are large but most largess is to be found in the excess number of senior officers and their staff. Objective should be to make some Pentagon space (as well as that in posts, forts, bases, etc) available to other Government agencies BECAUSE it becomes surplus to the needs of the military.
I doubt very few government contractors AS WELL as other government agencies comply to within 0.377% of their budgets (excepting frantic end of year spending to consume entire amount.)
Let me see if I understand....."If Boeing had WENT over on the cost" Really.... Did you go to school? English is NOT my first language, but I can write better than this. Secondly, is there an editor available? Was this article reviewed by anyone?...
Wow....How many billions of dollars is the United States spending on EDUCATION????? And more is needed????? With 1/4 of what the USA spends on Educations (Or is it Unions?) Any other country just about has a better education system.....
Title at 3:54PM EST, 10/15/13 says "A report says the company overcharged by as much as $16.6 billion by using more used parts than expected." First line of text of the article says "Boeing denies that it overcharged the U.S. Army by on a $4.4 billion helicopter contract."
Nice proofreading William White. Want a job with Boeing? Or perhaps you can become an Army finance auditer. Lol.
Copyright © 2013 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
These days, they are buying high and selling higher, and think their stock picks are protected by good fundamentals.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.