The Air Force[1] overpaid $149,072 for ... (checks notes) ... hand soap dispensers, according to a new Pentagon watchdog report.
In all, the service accepted a 7,943% markup, or more than 80 times the commercially available cost, on the soap dispensers for its C-17 Globemaster II[2] aircraft, resulting in the hefty overpayment, the Defense Department inspector general said in the findings released Tuesday.
"The overall function of these soap dispensers is identical, whether used in a residential kitchen or bathroom, commercial restaurant bathrooms, or in an aircraft lavatory," the IG wrote in the report.
A whistleblower complaint about the Air Force overpaying for the dispensers on C-17s prompted the IG audit, and the findings show the service was grossly upcharged for a variety of parts.
"We initiated the audit in response to an allegation to the DoD Hotline concerning spare parts pricing," the IG said in a released statement. "The allegation stated that the Boeing Company (Boeing) overcharged the Air Force for a lavatory soap dispenser used on the C‑17."
Overall, the watchdog said that "the Air Force did not consistently pay reasonable prices for C-17 spare parts in accordance with the Federal Acquisition Regulation."
The C-17 Globemaster is the Air Force's major cargo aircraft, utilized for everything from military transport to humanitarian missions. There are upward of 200 of the aircraft throughout the service, the report said.
The Pentagon watchdog examined 46 spare parts for the plane, including the soap dispenser, as part of its probe. Investigators found the Air Force overpaid about $1 million for a variety of parts.
The soap dispensers on the C-17s were perhaps the most damning example provided in the report. A photo of the purchased dispensers, as well as a widely available one that looks nearly identical, was provided as context in the report.
The report had some details redacted, such as the unit cost and the number purchased by the Air Force. Military.com found seemingly the same commercial soap dispenser pictured in the report on Amazon for $71.12.
Investigators found that the Air Force did not pay reasonable prices for 12 of the 46 parts reviewed, or 26%. Another nine parts, about 20% of them, were acceptable. But the service could not determine whether the pricing was acceptable for the remaining 25 parts, or 54%.
DoD Inspector General Robert Storch said the findings were concerning and could ultimately harm the Air Force's C-17 fleet.
"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," Storch said in a news release. "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."
In another example, IG investigators pointed to an upcharge for a pressure transmitter, detailing a 3,556% markup -- more than 36 times the commercially available cost -- causing the Air Force to overpay $142,091.
Boeing told Military.com in an emailed statement it is reviewing the findings.
"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," Boeing told Military.com in an emailed statement. "We will continue to work with the OIG and the U.S. Air Force to provide a detailed written response to the report in the coming days."
The IG report made eight recommendations to the Air Force and defense contracting officials, including "requesting a technical analysis on bill of materials and forecasting systems, and for reviewing invoices before payment."
