The Boeing Company, a major U.S. defense contractor, in 2009 settled a lawsuit for $25 million that alleged the company performed defective work on the U.S. Air Force’s entire KC-10 Extender fleet. The KC Extender aircraft has been a major part of the Air Force’s aerial refueling fleet during the wars in Iraq and Afghanistan.
The lawsuit, which was originally filed in Texas by two former company employees, alleged that Boeing defectively installed insulation blanket kits in the aircraft while performing maintenance on the fleet at the company’s San Antonio, Texas, support center. The lawsuit also alleged that Boeing overcharged the Navy for the installation of the kits by inflating the estimates of the number of hours needed to perform the work. Additionally, Boeing charged the government an excessive hourly rate for the work.
The $25 million settlement includes a cash payment of $18,400,00 as well as $6,600,000 worth of repair work to remedy the defective insulation blankets.
The whistleblowers who filed the False Claims Act suit on behalf of the government were awarded a portion of the recovery: the two former Boeing employees shared $2,625,000 of the proceeds from the settlement.
