U.S. government sues Boeing over price inflation

LOS ANGELES, Sept. 2 (Xinhua) — The U.S. government sued Boeing Co. on Tuesday, alleging the aerospace manufacturer illegally overcharged Air Force for building a B-1 bomber self-protection system.

The lawsuit, filed in U.S. District Court in Los Angeles, alleges that during 1998 contract negotiations, Boeing exaggerated its contract price and submitted 140 illegally inflated invoices to Air Force, in violation of the federal False Claims Act, according to the U.S. Attorney’s Office.

Boeing failed to disclose that it would out-source the manufacture of most of the components that were to be used for the Towed Decoy System, the lawsuit claims.

During negotiations, Boeing promised to fabricate 50 parts of the system at its Palmdale Site 9 facility in California, but was instead planning to close the Palmdale site and use suppliers and subcontractors to make the parts, according to the complaint.

As a result, Air Force paid 7.5 million dollars more than it should have for the system.

The suit alleges that had Air Force known of the significant cost savings Boeing had achieved by using earlier contracts to purchase parts from suppliers and outsourcing manufacturing, it would have negotiated a substantially lower price for the Towed Decoy System.

The decoy system, nicknamed “Little Buddy”, protects the B-1 aircraft and crew by luring enemy missiles toward an expendable decoy and away from the intended target.

Under the False Claims Act, the government can recover up to three times the amount of the loss, plus penalties for each inflated invoice.

Boeing officials could not be immediately reached for comment on the lawsuit.