Boeing has agreed to pay $4.4m to the US Department of Defense (DoD) to settle allegations it overcharged the US government for upgrading and modifying the US Army’s CH-47 Chinook helicopters between 2005 and 2010.
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In early 2003, Boeing received a $140m contract from the US Army Aviation and Missile Command to produce and modify existing Chinooks to the new CH-47F and MH-47G Special Operations Configurations as part of the army’s effort to modernise its fleet of heavy-lift helicopters.
The contract also included the remanufacture of several older Chinooks, including an airframes overhaul on a pre-negotiated price at Boeing’s Ridley Park plant in Pennsylvania, US.
However, a government probe revealed that the company’s managers had instructed mechanics to perform non-billable work while separately billing the US for their time, resulting in overcharging for work that had already been paid.
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The incident came to light when a production manager from the Ridley plant filed the Federal False Claims Act whistleblower lawsuit in a federal court in conjunction with the US Department of Justice in February 2010, citing that the company had submitted fraudulent claims for modification work to the Chinook helicopters.
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By GlobalDataBoeing Military Aircraft Mobility Division communications manager Andrew Lee said: "Boeing cooperated fully with the US Attorney’s Office in its examination of the charging of certain billable time on the CH-47 programme between 2005 and 2010."
In addition to paying $4.4m, the settlement also requires Boeing to implement several remedial measures, including retraining employees and making technological improvements in the software used to track billing.
Boeing will also employ a new labour-tracking computer system in all its nationwide defence-manufacturing facilities in the next few years.
The court has scheduled the hearing on the settlement agreement for 27 February 2012.
Image: Boeing to pay $4.4m to US Department of Defense to settle US Army’s CH-47 Chinook billing case.
