Air Force overpaid nearly 8,000% for soap dispensers for aircraft, IG report says

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Oct 10: CBS News 24/7, 1pm ET

The Air Force overpaid for soap dispensers used in the bathrooms of C-17 military aircraft by 7,943% — or more than 80 times the price of similar commercially available dispensers — according to a Defense Department inspector general report released Tuesday.

The dispensers were one of about a dozen spare parts for which Boeing overcharged the Air Force, according to the report, resulting in nearly $1 million in additional and unnecessary costs.

The costs of the soap dispenser from Boeing, the similar soap dispenser and the number of dispensers purchased by the Air Force were redacted in the report, but in total, the Air Force overpaid $149,072 for the soap dispensers.

An anonymous tip about the dispensers launched the inspector general's audit into the spare parts.

"The Air Force needs to establish and implement more effective internal controls to help prevent overpaying for spare parts for the remainder of this contract, which continues through 2031," Defense Department Inspector General Robert Storch said in a statement.

Boeing has a contract with the Air Force that lets Boeing purchase needed spare parts for the C‑17, and the Air Force reimburses Boeing for the spare parts purchased, according to the report.

"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," Storch said.

A Boeing spokesperson told CBS News Boeing is reviewing the allegations made in the report and said the company would have a detailed response "in the coming days."

"We are reviewing the report, which appears to be based on an inapt comparison of the prices paid for parts that meet aircraft and contract specifications and designs versus basic commercial items that would not be qualified or approved for use on the C-17," the Boeing spokesperson sought to explain in a statement.

An Air Force spokesperson in a statement said the Air Force is working with the agency in charge of contracts to make sure payments are accurate and is also updating contracts to include more information about subcontractors.

The Air Force calls the Boeing Globemaster C-17s "the most flexible cargo aircraft" in its fleet, capable of carrying large equipment and groups of people for military, humanitarian, or peacekeeping missions.

About 220 C-17s are used by the Air Force, Air National Guard and the Air Force Reserve Command.

Kathryn Krupnik contributed to this report.