Boeing Cited for Overcharging NASA by Millions

There is perhaps no company in the world that will be happier to put 2019 behind them than Boeing. The aerospace giant started the year with a number of unanswered questions related to the crash of their 737 Max jet in Indonesia, along with increased competitive pressures from Airbus. Then in March another 737 crashed in Ethiopia, which led to a near-global grounding of the plane and subsequent safety-related delays in delivering new models. Now, just as the company is hoping to resume plane deliveries, the inspector general for NASA has released an audit criticizing Boeing’s charges for a fixed contract to develop a ship capable of shuttling astronauts to the International Space Station. Under scrutiny is a $287 million upcharge that Boeing levied to offset potentially higher costs down the road. These costs stemmed from the company anticipating a gap in flights due to the spacecraft’s development running about two years behind schedule. Boeing has received a $4.3 billion contract as part of NASA’s Commercial Crew Program. The auditor felt that as much as $187 million of this total was “unnecessary” because such a gap could be solved by NASA buying seats on Russian spacecraft during this stretch. Which is exactly what Boeing proposed, serving as a broker for five seats at a cost of $373 million. The U.S. has relied on Russia for rides to the ISS since the Space Shuttle program ended in 2011. The auditors also managed to slide in a not-so-subtle dig at Boeing by citing that SpaceX, which has a $2.5 billion contract related to the same Commercial Crew Program, was not provided an opportunity to address this potential shortage of missions, even though Elon Musk’s company had said it might be able to provide the desired craft sooner than Boeing. NASA contested the auditor’s findings, as did Boeing, stating that its fees accounted for additional flexibility and schedule resiliency.