A Pentagon audit has uncovered that Boeing has overcharged the Air Force millions for spare parts on its C-17 cargo planes.
The report found that the aerospace company charged up to an 10,000 percent markup for miscellaneous items, like basic bathroom soap dispensers, tape, screws and ventilation fans.
The Defense Department’s Office of the Inspector General revealed that it launched its investigation into Boeing’s rates after receiving an anonymous tip to their hotline.
DailyMail.com estimates based on the ‘Total Boeing Purchase Contract Values’ published within the Pentagon audit that the cumulative dollar amount of this overcharging from 2018 to 2022 would have cleared $4.2 million.
It is the latest scandal to embroil Boeing, which has already been been accused this year of myriad flight safety issues, and stranding two NASA astronauts in space.
And the news comes as billionaire tech mogul Elon Musk and past GOP presidential hopeful Vivek Ramaswamy promise to crackdown on wasteful federal spending via their new Department of Government Efficiency (DOGE).
Inspector General Robert Storch painted the exorbitant markups as a fundamental threat to US air superiority and national security.
‘Significant overpayments[…] may reduce the number of spare parts that Boeing can purchase on the contract, potentially reducing C-17 readiness worldwide,’ he said.
Also known as the ‘Globemaster III,’ Boeing’s C-17 is a mammoth 174-foot long transport aircraft with a 169-foot wingspan used to deploy both troops and materiel.
The C-17 was designed to ferry as many as 102 paratroopers for airdrop missions into war zones, but can also carry some of the Army’s heaviest cargo, including the 69-ton M1 Abrams main battle tank.
Boeing spokeswoman Nicola Hammond said the firm is ‘reviewing the report.’
But the defense contractor also pushed back on the Pentagon watchdog’s portrayal of the prices included in its Globemaster contract, which is slated to continue onward through 2031.
The audit, Boeing contended, ‘appears to be based on an inapt comparison of the prices paid for parts that meet aircraft and contract specifications and designs vs basic commercial items that would not be qualified or approved for use on the C-17.’
The firm vowed it would ‘continue to work’ with the inspector general’s office and ‘provide a detailed written response to the report in the coming days.’
The Pentagon IG’s Boeing audit zeroed in on 12 items that they believed were radically overpriced between 2018 and 2022.
One item, a ‘pressure sensitive’ and ‘anti-chafing’ protective tape coated in polyurethane plastic film, the IG found, led to $55,037 in over-charging or a 201 percent increase compared to the Pentagon’s assessed ‘market research unit price.’
The most apparently egregious case of markup, per DoD, was for a simple ‘machine screw,’ for which Boeing had charged more than 10,319 percent the going rate.
Prices for versions of this machine screw (ANDV11632‑1), made by C-17 replacement parts maker Andover Corp, show variation from $22 to $2,750 on their website.
But while the DoD found that nine of the spare parts were fairly priced by Boeing — via research assistance from the Defense Contract Management Agency — the audit failed to even find comparison prices for over half of these items (25 out of 46).
‘We were unable to determine whether the Air Force paid reasonable prices,’ the inspector general noted, ‘because the DCMA CIG [Commercial Item Group] was unable to obtain supplier quotes or identify commercially similar parts.’
However, based on the pricing data contained in the report’s ‘C‑17 Spare Parts Price Comparison’ appendix, DailyMail.com tallied a $4,227,217.26 overcharge at minimum.
The C-17 Globemaster remains a work horse for America’s force projection overseas, flying nonstop for two weeks as part of the chaotic August 2021 withdrawal of troops and more than 120,000 civilians from Afghanistan, to cite one example.
In a sign of Boeing’s growing reputation for mismanagement, greed and fatal flight safety issues, its Ghost Bat AI-piloted fighter jet lost out on this year’s round of Air Force funding to proposals by start-up Anduril and drone-maker General Atomics.
But cases like the Pentagon’s $2 trillion boondoggle to turn Lockheed Martin’s F-35 stealth fighter into a viable air war fighter has shown how one giant defense contractor can weather the reputational harm of failing to deliver the goods.
The federal government has granted Boeing over $30 billion in contracts since 2011 to purchase its needed C-17 spare parts alone, and has not threatened to cut ties.
‘The Air Force needs to establish and implement more effective internal controls to help prevent overpaying for spare parts for the remainder of this contract,’ DoD Inspector General Storch said.
Outside of its Pentagon deals, Boeing has struggled to bounce back from the economic and PR damage caused by two fatal crashes of its 737 Max passenger jets in 2018 and 2019.
This year, a door plug exploded off a 737 Max during an Alaska Airlines flight, prompting still more investigations and bad press targeting the company.
This past July, Boeing announced it would issue a guilty plea in Texas court to one felony count of conspiracy to defraud the government for misleading regulators, over sketchy but approved ‘pilot training rules’ for the 737 Max.
And, this October, Boeing reported over $6 billion in losses in its 2024 third-quarter financial statements.
The company has been embroiled in labor disputes this year, as well: Union machinists, numbering roughly 33,000, went on a seven-week long strike over conditions surrounding the production of the firm’s 737s, 777s and 767 freighters.
Full timeline of Boeing problems in 2024
January 5
On January 5, Alaska Airlines Flight 1282 – a Boeing 737 Max 9 – lost a door plug at 16,000 feet on a flight from Portland, Oregon, to Ontario, California.
That part is designed to replace an unneeded emergency exit door, and it blew out within just 20 minutes of takeoff.
An emergency landing was required and the plane landed safely, but a teddy bear, two mobile phones, a child’s t-shirt were all said to have have flown out during the incident.
The Federal Aviation Administration (FAA) grounded 171 of the 737 Max 9s in the aftermath and six of the flight’s passengers went on to sue the airline.
Alaska Airlines and United Airlines also went on to find loose parts on their grounded jets’ door plugs.
January 16
An anonymous whistleblower broke rank to say that the door plug blowout ‘was Boeing’s fault’, rather than its supplier Spirit AeroSystems.
First reported by The Seattle Times, they claimed the fuselage panel was removed for repair then reinstalled improperly at its Washington factory
‘The reason the door blew off is stated in black and white in Boeings own records,’ they wrote on aviation site Leeham News.
‘It is also very, very stupid and speaks volumes about the quality culture at certain portions of the business.’
February 6
A National Transportation Safety Board (NTSB) report said that the January 5 incident was down to four crucial bolds being missing from the panel which blew out.
February 21
Boeing’s 737 Max program chief, Ed Clark, was reportedly fired in a structural shakeup at the company.
Clark was also general manager at the company’s Renton, Washington, facility and had been at Boeing for 18 years.
He was replaced by Katie Ringgold, while a ‘senior vice president of quality’ role was created too.
March 3
A United Airlines Boeing 737 Max 8 veered off the runway after landing in Houston due to some sort of gear collapse.
Shocking footage showed the plane lying flat on its wings on grass by the side of the runway, while passengers were hurried off from an emergency gate ladder.
March 4
An audit by the FAA of both Boeing and Spirit AeroSystems ‘found multiple instances where the companies allegedly failed to comply with manufacturing quality control requirements’.
March 6
The head of the NTSB accused Boeing of ‘not cooperating’ with its investigation into the January incident.
Jennifer Homendy said investigators sought the names of the 25 people who work on door plugs at the Renton facility, but had not received them from Boeing.
She told a Senate Committee hearing ‘it is absurd that two months later we don’t have it’.
However, Boeing spokesperson Connor Greenwood pushed back and insisted that names of employees were provided ‘early in the investigation’.
The same day, a 737’s engine caught fire in mid-air above Texas, causing an emergency landing minutes into its journey to Fort Myers, Florida.
March 7
A wheel fell off a Boeing 777-200 shortly after takeoff from San Francisco, crushing cars below.
The plane with 235 passengers and 14 crew diverted to Los Angeles Airport after it was alerted to the landing gear failure and landed safely with no further incident and no injuries reported on the ground.
March 9
Boeing whistleblower John Barnett, 62 – a former quality control manager and employee of 32 years – was found dead in his truck outside a South Carolina hotel days after testifying against the company in a lawsuit.
The coroner put it down to a ‘self-inflicted’ gunshot wound in the head, though the police confirmed that they would investigate further.
Barnett had made a string of complaints to his higher-ups in his time as a quality control manager before leaving the company on health grounds in 2017.
In January 2024, he appeared on TMZ to say that the 737 Max 9 aircraft were being launched back into the air too soon in the wake of the accident, suggesting corners had been cut.
March 11
A Boeing 777 was was forced to land due to hydraulic fluid spewing from its landing gear area.
The forced landing happened as the San Francisco-bound 777-300 embarked from Sydney, with fluid filmed leaking from its undercarriage.
March 15
A United Airlines 737 was grounded after it was found to be missing a panel after it touched down successfully in Medford Airport, Oregon, despite the missing part.
March 20
A Boeing 737 900 bound for Atlanta was forced to turn back and make an emergency landing after an engine blow out on take-off from Aruba.
The Delta flight circled the Caribbean island four times before coming back into land following the ‘mechanical issue’.
March 29
United Airlines flight 990 – a Boeing 777-200 – from San Francisco to Paris had to touch down early in Denver after engine problems.
April 4
Alaska Airlines announced that they had received $160 million in compensation from Boeing after their 737 Max 9s were grounded following the January 5 door blowout.
The amount was equal to the revenue lost according to a filing from the airline, but Alaska added that it anticipated receiving extra compensation too.
April 10
Another whistleblower, Sam Salehpour, came forward in a Senate committee hearing to accuse Boeing of taking shortcuts when building its 777 and 787 Dreamliner jets and added that the company had retaliated against him when he raised concerns.
He doubled down on the claims a week later, adding on NBC that 787s should be grounded fearing ‘fatal flaws’ which could case them to fall apart mid-air.
In a 1,500 word statement, Boeing said it was ‘fully confident’ in the 787 and called concerns about structural integrity ‘inaccurate.’
April 11
An internal Boeing review in response to an initial Wall Street Journal investigation found that CEO Dave Calhoun and other bosses at the aviation firm spent $500,000 on company private jets for personal trips which were improperly recorded as business travel.
Boeing’s review concluded that some of the flights taken by executives in 2021 and 2022 ‘were not previously classified as perquisites by the company’.
In the company’s proxy filing on April 5, Boeing said that these flights ‘should have been classified as such in accordance with SEC rules and guidance’.
April 16
United Airlines indicated it will reduce reliance on Boeing after announcing a $124m loss in the first quarter of 2024, which it blamed on the scandal-laden manufacturer.
April 24
Boeing’s CEO assured investors after a first-quarter loss of $355m was announced which coincided with a six per cent dip in share prices.
Calhoun added that he had a successor lined up for his departure at the end of 2024 who would come from inside the company.
April 26
Delta flight 520 was forced to make an emergency landing at JFK Airport when an emergency slide fell off the Boeing 767 an hour into its journey to Los Angeles.
FAA records indicated that the plane was 33 years old.
April 30
A second whistleblower, Joshua Dean, died suddenly aged 45 having raised the alarm about supposed defects in 737 Max jets.
The former Spirit employee previously said he was fired from his quality auditing role for questioning standards at the supplier’s plant in Wichita, Kansas, in October 2022.
His family said on social media that Dean died in hospital after a sudden illness.
Earlier in 2024, Dean spoke with NPR about being fired. ‘I think they were sending out a message to anybody else. If you are too loud, we will silence you,’ he said.
May 6
The US Federal Aviation Administration revealed it has opened an investigation into Boeing after the company reported that workers at a South Carolina plant falsified inspection records on certain 787 planes.
Boeing said its engineers have determined that misconduct did not create ‘an immediate safety of flight issue’.
No planes have been taken out of service, but having to perform the test out of order on planes will slow the delivery of jets still being built at the final assembly plant in North Charleston, South Carolina.
Boeing must also create a plan to address planes that are already flying, the FAA said.
May 8
A FedEx Airlines Boeing cargo plane landed at Istanbul Airport without the front landing gear deployed and managed to stay on the runway, Turkey’s transport ministry said, adding that there were no casualties.
The Boeing 767 aircraft, flying from Paris Charles de Gaulle Airport, informed the traffic control tower at Istanbul Airport that its landing gear failed to open and it landed with guidance from the tower, the ministry said in its statement.
Airport rescue and fire fighting teams made necessary preparations on the runway before landing, and no one was injured, the ministry also said, without giving a reason for the failure.
Footage showed sparks flying and smoke billowing as the front end of the plane scraped along the runway before being doused with firefighting foam.
May 9
A Corendon Airlines Boeing 737 plane’s front tire burst upon landing at an airport in southern Turkey on Thursday, the Turkish transport minister said, adding there were no casualties and all 190 passengers and crew were evacuated.
The front landing gear strut was damaged on the Corendon Airlines plane, arriving from Cologne, Germany, as it landed at Alanya-Gazipasa airport in Antalya.
The same day, a Boeing passenger plane came off the runway during takeoff from Dakar international airport, injuring 11 people and shutting the hub for hours.
The Air Senegal flight was bound for the Malian capital Bamako and had 78 passengers on board, plus a crew of six including two pilots, airport management company LAS said in a statement.
Images showed the aircraft in an overgrown area with first aiders surrounding an injured person. Smoke and flames are also visible near the plane.
Also on May 9, the US Securities and Exchange Commission is investigating statements made by Boeing Co. about its safety practices after a mid-air panel blowout on a 737 MAX flight in January.
The SEC will examine whether the planemaker or its executives misled investors in violation of the Wall Street regulator’s rules, the report said, citing three people familiar with the development.
May 14
Boeing has violated a settlement that allowed the company to avoid criminal prosecution after two deadly crashes involving its 737 Max aircraft more than five years ago, the Justice Department told a federal judge.
It is now up to the Justice Department (DOJ) to decide whether to file charges against Boeing. Prosecutors will tell the court no later than July 7 how they plan to proceed, the department said.
May 21
One person died and others were injured on a flight from London to Singapore which plummeted 6,000ft in five minutes before making an emergency landing in Thailand.
The Boeing 777 plane operated by Singapore Airlines left the UK’s Heathrow airport on Monday evening at 22.17pm local time with 211 passengers and 18 crew on board.
However, flight SQ321 experienced severe turbulence while flying close to Myanmar airspace in a region being battered by extreme tropical thunderstorms.
After around 11 hours of flying time from take off in London, the aircraft sharply dropped from an altitude of around 37,000 feet to 31,000 feet within just five minutes as it finished traversing the Andaman Sea and neared Thailand.
Boeing said: ‘We are in contact with Singapore Airlines regarding flight SQ321 and stand ready to support them.
‘We extend our deepest condolences to the family who lost a loved one, and our thoughts are with the passengers and crew.’
