It's costing Boeing Co. $25 million in cash and repairs to settle a lawsuit that alleged it overcharged the U.S. Air Force and did defective work on the branch's aerial refueling fleet, the U.S. Department of Justice said Thursday.
Under the terms of the settlement, Chicago-based Boeing will pay the government $18.4 million cash. Boeing will also perform $6.6 million worth of repair work on the aircraft at the company’s expense.
"We disagree with the Department of Justice’s claims that our employees improperly installed the (insulation) blankets," Boeing spokeswoman Deborah VanNierop said. "And we disagree with the Department of Justice claims that we improperly billed the Air Force for our work."
The KC-10 aircraft is a mainstay of the Air Force's aerial refueling fleet used in the wars in Iraq and Afghanistan, and the suit, originally filed in Texas by two former employees, accused the company of installing defective parts while performing mainenance on the planes.
"The Department of Justice will vigorously pursue cases under the False Claims Act against those contractors who provide shoddy work," Assistant Attorney General Tony West said in a statement.
The settlement negotiations with Boeing were conducted by the U.S. Attorney's office in San Antonio and the Justice Department's Civil Division.