Georgia Tech Procurement Assistance Center

  • Home
  • About Us
  • Training
    • Class Registration
    • On-demand Training
    • GTPAC COVID-19 Resource Page
    • Veterans Verification Video
    • Other Training Audio & Video
  • Useful Links
  • Team Directory
    • Albany Counselor
    • Atlanta Counselors
    • Augusta Counselor
    • Carrollton Counselor
    • Columbus Counselor
    • Gainesville Counselor
    • Savannah Counselor
    • Warner Robins Counselor
  • Directions
    • Atlanta – Training Facility
    • Atlanta – Office
    • Albany
    • Augusta
    • Carrollton
    • Columbus
    • Gainesville
    • Savannah
    • Warner Robins
  • COVID-19
  • New Client Application
  • Contact Us

Pentagon audit: Boeing violates federal account rules, may lose $271 million in government payments

August 17, 2010 By ei2admin

Boeing should lose as much as $271 million in government payments for satellite launch services because the defense contractor violated federal accounting rules, the Pentagon’s audit agency said.

The Defense Contract Audit Agency, in a July 23 report, said the Pentagon should require Boeing to reimburse $72 million that was previously paid, agency director Patrick Fitzgerald said in an e-mail statement. Fitzgerald said the Defense Contract Management Agency, which monitors contractor performance, also should notify the joint Boeing-Lockheed Martin United Launch Alliance that the government won’t pay another $199 million in “unallowable” pending support costs.

United Launch Alliance builds Atlas and Delta rockets in Decatur for defense and commercial customers. Boeing’s Delta IV and Lockheed Martin’s Atlas V rockets are the primary methods for launching U.S. military satellites.

Boeing was notified of the finding on July 28 and doesn’t agree, a company spokesman said. The auditors reviewed whether Chicago-based Boeing improperly billed the Air Force in a 2006-2008 contract for labor, management, quality control and support costs that had been incurred between 1998 and 2006 in the Delta IV rocket program.

Boeing was “in non-compliance” with federal accounting standards that require billings to take place during the year when the costs were incurred, Fitzgerald said.

Boeing spokesman Joseph Tedino, in an e-mail statement, said “the costs at issue were legitimate costs of the Delta program,” which the government acknowledged by agreeing in 2006 to pay for those items. “Boeing believes its 2006 agreement was appropriate, and that the United Launch Alliance’s recovery of the costs is fully compliant” with government accounting standards, Tedino said.

Debra Bingham, a spokeswoman for the Defense Contract Management Agency, which is reviewing the audit recommendations, said that the agency’s Boeing manager in Huntington Beach, Calif., plans to render a final decision in November.

The official will review the audit agency’s analysis and recommendation, as well as Boeing’s rebuttal, she said. Boeing and Bethesda, Md.-based Lockheed Martin, the largest defense contractor, established the United Launch Alliance in December 2006 to consolidate the military launch business.

The audit was undertaken after the Government Accountability Office and the Pentagon’s inspector general last year uncovered problems with 14 audits of various programs and 62 pricing agreements at government locations in California. In Boeing’s case, a regional manager for the audit agency approved “a flawed audit that could have allowed Boeing to recover” the $271 million, Inspector General Gordon Heddell said in Sept. 23 testimony to Congress.

The regional manager, who wasn’t identified by the inspector general, overturned a draft audit conclusion that Boeing shouldn’t be paid anything because the company was in “potential violation of accounting standards,” Heddell said.

— by Tony Capaccio, Bloomberg News, Aug. 4, 2010

Filed Under: Contracting News Tagged With: accounting, Air Force, DCMA, DoD, federal contracting, GAO

Recent Posts

  • OMB releases guidance related to small business goals
  • Are verbal agreements good enough for government contractors?
  • OMB issues guidance on impact of injunction on government contractor vaccine mandate
  • CMMC 2.0 simplifies requirements but raises risks for government contractors
  • OFCCP launches contractor portal initiating AAP verification program

Popular Topics

8(a) abuse Army bid protest budget budget cuts certification construction contract awards contracting opportunities cybersecurity DoD DOJ False Claims Act FAR federal contracting federal contracts fraud GAO Georgia Tech government contracting government contract training government trends GSA GSA Schedule GTPAC HUBZone innovation IT Justice Dept. marketing NDAA OMB SBA SDVOSB set-aside small business small business goals spending subcontracting technology VA veteran owned business VOSB wosb

Contracting News

OMB releases guidance related to small business goals

OMB issues guidance on impact of injunction on government contractor vaccine mandate

Changes coming to DOD’s Cybersecurity Maturity Model Certification under CMMC 2.0

Judge issues nationwide injunction halting enforcement of COVID-19 vaccine mandate

Nondisplacement of qualified workers is back, but with changes

Read More

Contracting Tips

Are verbal agreements good enough for government contractors?

CMMC 2.0 simplifies requirements but raises risks for government contractors

OFCCP launches contractor portal initiating AAP verification program

GAO rules that DoD may not require small business Joint Venture itself hold facility security clearance

Terminations for convenience clauses vs. mutual termination clauses

Read More

GTPAC News

VA direct access program events in 2022

Sandia National Laboratories seeks small business suppliers

Navy OSBP hosting DCAA overview (part 2) event Jan. 12, 2022

Navy OSBP hosting cybersecurity “ask me anything” event Dec. 16th

State of Georgia hosting supplier systems training on January 26, 2022

Read More

Georgia Tech News

Undergraduate enrollment growth reflects inclusive excellence

Georgia Tech delivers $4 billion in economic impact to the State of Georgia

Georgia Tech awards first round of seed grants to support team-based research

Georgia Tech announces inaugural Associate Vice President of Corporate Engagement

DoD funds Georgia Tech to enhance U.S. hypersonics capabilities

Read More

  • SAM.gov registration is free, and help with SAM is free, too
APTAC RSS Twitter GTPAC - 30th Year of Service

Copyright © 2022 · Georgia Tech - Enterprise Innovation Institute