excessive labor charges | The Contracting Education Academy

February 18, 2016 By AMK

Robins Air Logistics Base has not effectively negotiated depot contractor profit, says IG

The Air Force has not effectively negotiated depot labor profit at its logistics complex at Robins Air Base in Warner Robins, Georgia, the Defense Department watchdog concluded, missing an opportunity to cut contractor profit and fees by $9.6 million to $24.9 million.

“Contracting officials did not adequately reduce or eliminate profit and fees paid for work performed” through a public-private partnership, said an inspector general’s report dated Feb. 8. “This occurred because program officials either did not prepare or update the business case analysis supporting the partnership type selected.”

The labor charges based on repair and maintenance affect such weapons programs as the Boeing C-17 Globemaster III heavy-lift aircraft and the AN/APN-241 high resolution radar system developed by Northrop Grumman.

Keep reading this article at: http://www.govexec.com/contracting/2016/02/air-force-told-save-millions-contractors-depot-labor/125912

October 16, 2015 By AMK

Boeing pays $18 million to settle allegations of improperly charging labor costs

The Boeing Company has paid the United States $18 million to settle allegations that the company submitted false claims for labor charges on maintenance contracts with the U.S. Air Force for the C-17 Globemaster aircraft, the Justice Department has announced.

The government alleged that Boeing improperly charged labor costs under contracts with the Air Force for the maintenance and repair of C-17 Globemaster aircraft at Boeing’s Long Beach Depot Center in Long Beach, California. The C-17 Globemaster aircraft, which is both manufactured and maintained by Boeing, is one of the military’s major systems for transporting troops and cargo throughout the world. The government alleged that the company knowingly charged the United States for time its mechanics spent on extended breaks and lunch hours, and not on maintenance and repair work properly chargeable to the contracts.

“Defense contractors are required to obey the rules when billing for work performed on government contracts,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates that the Justice Department will ensure that government contractors meet their obligations and charge the government appropriately.”

The allegations resolved by the settlement announced on October 14, 2015 were originally brought by former Boeing employee James Thomas Webb under the qui tam, or whistleblower, provisions of the False Claims Act. The Act permits private individuals to sue on behalf of the government those who falsely claim federal funds, and to share in the recovery. Mr. Webb’s share of the settlement has not yet been determined.

The case was handled by the Civil Division’s Commercial Litigation Branch, the Defense Criminal Investigative Service, the Air Force Office of Special Investigations, the Defense Contract Audit Agency and the Defense Contract Management Agency.

The False Claims Act lawsuit is captioned United States ex rel. Webb v. The Boeing Company, CV13-000694 (C.D. Cal.). The claims resolved by this civil settlement are allegations only as there has been no determination of liability.

Boeing, an aerospace and defense industry giant, is headquartered in Chicago.

Source: http://www.justice.gov/opa/pr/boeing-pays-18-million-settle-false-claims-act-allegations

June 6, 2014 By AMK

Army to Seek Northrop refunds over inflated labor rates

The U.S. Army will press Northrop Grumman Corp. (NOC) for refunds after the Pentagon’s inspector general found the contractor charged the service inflated labor rates on programs to fight drug trafficking.

The Army Contracting Command will conduct its own audit “as soon as feasible” of Northrop’s billings and the resumes of subcontractor workers to determine how much money should be repaid, spokeswoman Giselle Lyons said in an e-mail.

Allegations in the report “are being further investigated by the U.S. Army Contracting Command,” she said. “The command is implementing the recommendations proposed to help ensure the proper management and oversight of current and future contract actions.”

Northrop, the fifth-biggest U.S. contractor, charged the Army excessive labor rates for almost six years for more than 300 subcontractor employees working in Afghanistan and in the U.S. on counter-narcotics efforts abroad, the inspector general said in a May 13 report labeled “For Official Use Only” and obtained by Bloomberg News.

Keep reading this article at: http://www.bloomberg.com/news/2014-05-29/army-to-seek-northrop-refunds-over-inflated-labor-rates.html

The Air Force has not effectively negotiated depot labor profit at its logistics complex at Robins Air Base in Warner Robins, Georgia, the Defense Department watchdog concluded, missing an opportunity to cut contractor profit and fees by $9.6 million to $24.9 million.

The Boeing Company has paid the United States $18 million to settle allegations that the company submitted false claims for labor charges on maintenance contracts with the U.S. Air Force for the C-17 Globemaster aircraft, the Justice Department has announced.

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