Sues Planemaker Under False Claims Act

The US government filed a federal lawsuit Tuesday against Boeing, saying the American planemaker and defense contractor deliberately inflated the price for a decoy system fitted to US Air Force B-1B Lancer bombers.

According to The Associated Press, the lawsuit claims the Air Force paid $7.5 million more than it should have, since Boeing was able to find a cheaper source for parts needed for the system... but failed to disclose that fact during contract negotiations, way back in 1990.

Specifically, the contract was based on Boeing's assertions it would manufacture parts for 57 decoy systems -- towed behind the bombers to thwart attacks from ground-based missiles and shoulder-fired rockets -- at a Boeing facility in Palmdale, CA. But the government says Boeing planned all along to close that plant, and obtain parts from a subcontractor at reduced cost.

Assistant US Attorney Lisa Palombo said had the USAF known of that change, it would have pushed for a lower price... and furthermore, that Boeing employees warned their managers to disclose the potential savings.

"It's a significant amount and, of course, it's all taxpayer money," she said. "We make it a priority to collect all taxpayer funds that are obtained through fraud. We don't make exceptions for anyone, individuals or large companies."

Company spokesman Forrest Gossett said Boeing believes it conducted its side of the negotiations in good faith, and that it fulfilled its contract.

The Air Force paid $36 million for the kits, according to the AP. Under the False Claims Act, the government may recover up to three times the amount it overpaid, on top of penalties.

FMI: www.af.mil, www.boeing.com