“Overcharging is a massive problem for the U.S. military budget. In 2015, the Pentagon found that it was severely overpaying for Patriot missiles, and negotiated a new contract that saved $550 million. In 2019, the inspector general found that the military was paying $4,300 for a half-inch metal drive pin that should have cost $46.
The similarly extreme markup on soap dispensers is what led to the audit of C-17 parts in the first place. The Office of the Inspector General says that it opened its investigation in June 2022 after a whistleblower told its anonymous tip line that Boeing was severely overcharging for airplane bathroom fixtures.
The inspector general found that the Air Force did not “validate the accuracy of the data used for contract negotiation, conduct contract surveillance to identify price increases during contract execution, or review invoices to determine fair and reasonable prices before payment.””
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“The inspector general found that the Pentagon had trouble catching overcharging because officials “would not question the costs if they matched what Boeing paid” its suppliers.”