Boeing C-17 Soap Dispensers Cost 80 Times More Than in Shops (1)

The US Air Force paid more than 80 times the commercially available cost for lavatory soap dispensers on the Boeing Co. C-17 military transportation aircraft, the Pentagon’s inspector general said in a newly released audit of spare parts.

The Air Force paid a 7,943% markup for soap dispensers whose function “is identical, whether used in a residential kitchen or bathroom, commercial restaurant bathrooms, or in an aircraft lavatory,” the IG said in the report. As a result the service overpaid almost $150,000 for these dispensers, the report concluded.

The watchdog initiated the investigation as a result of allegations made to a Pentagon hotline.

The inspector general reviewed 46 spare parts for the C-17 and found that the Air Force didn’t pay “fair and reasonable prices” for 12 spare parts, or 26 percent, valued at $4.3 million. The watchdog couldn’t determine whether the service paid fair prices for 25 spare parts, or 54 percent, valued at $22.2 million. In all, the IG determined that the Air Force paid a fair price for nine spare parts, or 20 percent, valued at $20.3 million.

The Air Force also paid a 3,556% markup, more than 36 times the commercially available cost, for pressure transmitters — a mechanical device that measures the pressure of a liquid or gas and converts it into an electrical signal. That resulted in overpaying $142,091, the IG concluded. For retaining bands, or thick rubber bands used in the military, the Air Force paid an 833% markup, or $293,633 in overpayments.

“We are reviewing the report, which appears to be based on an inapt comparison of the prices paid for parts that meet military specifications and designs versus basic commercial items that would not be qualified or approved for use on the C-17,” Boeing spokeswoman Deborah VanNierop said in a statement. “We will continue to work with the OIG and the US Air Force to provide a detailed written response to the report in the coming days.”

Boeing was awarded a 10-year, $11.8 billion sustainment contract for the C-17 in 2011 and in 2021 the Air Force awarded the company a follow-on contract worth $23.8 billion to service the plane through 2031. Boeing purchases the spare parts and the Air Force reimburses the planemaker for them.

“Significant overpayments for spare parts may reduce the number of spare parts that Boeing can purchase on the contract, potentially reducing C-17 readiness worldwide,” Inspector General Robert Storch said in a statement.

Developed by Boeing, the C‑17 has been in service for 30 years. The C‑17 is a principal transporter for military, humanitarian, and peacekeeping missions. The C‑17 is capable of rapid strategic delivery of troops and cargo to main operating bases or to forward operating bases in a deployment area. The Air Force has a fleet of 222 C‑17 aircraft operated by the Air Force, Air National Guard, and the Air Force Reserve Command.