Send me real-time posts from this site at my email

Boeing Spare-Part Pricing Faces Scrutiny by Lawmakers

Boeing (NYSE: BA) is facing scrutiny from lawmakers over the price of spare parts for its KC-46 tankers, with some government officials reportedly concerned that the defense giant is trying to recover some of the plane's development costs by overcharging for spares.

The KC-46 has long been an albatross for Boeing, with the company forced to swallow billions in cost overages during the development phase. But the plane is finally flying, and is scheduled to enter service with Japan later this year.

A Boeing KC-46 refuels an F-16. Image source: Boeing.

In April, the Air Force awarded Boeing an $88 million contract to supply spare parts to Japan. Defense News reports the deal included about $10 million in costs that Air Force leaders investigated and could not determine if they were fair or reasonable.

An unnamed government official expressed concerns to Defense News that Boeing is trying to use spare parts to recoup some of the development overages. And Rep. Rob Wittman, a Virginia Republican on the House Armed Services Committee, told the publication he intended to raise the issue during an Air Force budget hearing scheduled for today.

Boeing denied inflating the prices, saying the parts overages were caused by issues including pandemic-related supply chain disruptions and comparisons to spare parts that were inadvertently mispriced in prior orders. The KC-46 is based on the commercial 767 design, and commercial spare-parts markets were thrown into disarray during the pandemic.

Boeing offered to allow the Air Force to buy one disputed part, a navigation light manufactured by Honeywell International, directly from the source, but says the government ultimately decided to buy the part from Boeing.

10 stocks we like better than Boeing
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Boeing wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of June 7, 2021

Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue