The US Air Pressure (USAF) has did not pay truthful and affordable costs for spare components bought for the C‑17 navy transport plane, an audit by the US Division of Protection Workplace of Inspector Normal (DoD OIG) has revealed.
The DoD OIG has launched a report titled “Audit of C-17 Spare Components Pricing,” which revealed the findings.
Cargo plane C-17 spare components are manufactured by aerospace firm Boeing.
The audit, initiated in response to a DoD Hotline allegation, assessed the equity of costs below performance-based logistics contracts in step with the Federal Acquisition Regulation.
US DoD Inspector Normal Robert Storch stated: “The Air Pressure wants to determine and implement more practical inside controls to assist stop overpaying for spare components for the rest of this contract, which continues by 2031.
“Vital overpayments for spare components could scale back the variety of spare components that Boeing can buy on the contract, probably lowering C-17 readiness worldwide.”
Entry probably the most complete Firm Profiles
available on the market, powered by GlobalData. Save hours of analysis. Acquire aggressive edge.
Firm Profile – free
pattern
Your obtain e-mail will arrive shortly
We’re assured concerning the
distinctive
high quality of our Firm Profiles. Nonetheless, we would like you to take advantage of
helpful
determination for your enterprise, so we provide a free pattern which you could obtain by
submitting the under kind
By GlobalData
The DoD OIG discovered that about 26% of the spare components reviewed, valued at $4.3m, weren’t bought at truthful and affordable costs.
Furthermore, the Air Pressure’s lack of value information led to an incapacity to find out the equity of costs for greater than 54% of spare components, value greater than $22m.
Moreover, the Air Pressure overpaid almost $1m for a dozen various kinds of spare components on the contracts.
Particularly, the allegations embrace the Air Pressure paying greater than 80 occasions the commercially obtainable value for a bathroom cleaning soap dispenser, leading to a 7,943% markup.
The DoD OIG recognized a number of causes for these overpayments, together with the Air Pressure’s failure to validate contract negotiation information, conduct contract surveillance, and overview invoices to make sure costs had been truthful earlier than cost.
Moreover, the DoD didn’t implement a requirement for contracting officers to confirm the accuracy of the invoice of supplies earlier than negotiations or to scrutinise invoices for allowable, allocable, and affordable prices earlier than cost.
The DoD OIG has made eight suggestions to handle these points.
One in every of these urges the Commander of the Air Pressure Life Cycle Administration Heart to direct the C-17 contracting officer to overview spare components costs and justify any vital value will increase from Boeing.
The opposite suggestions embrace tasking the Director of the Protection Contract Administration Company with reviewing Service Components Administration to evaluate the accuracy of forecasts for spare components calls for. If any inaccuracies are discovered throughout this overview, corrective measures must be carried out.
Moreover, it beneficial that the Principal Director of Protection Pricing, Contracting, and Acquisition Coverage direct the Protection Acquisition Rules Council to suggest amendments to the Federal Acquisition Regulation to make clear the tasks of contracting officers.
The DoD OIG has dedicated to proceed monitoring the DoD’s progress in implementing these suggestions to stop future overpayments.
