In it, but not of it. TPM DC
Though such transactions may appear miniscule compared to the large multi-billion dollar budgets the Pentagon is usually accustomed to, the markups prove to be much more lucrative throughout the life span of a particular defense project where these costs can accumulate, like an Apache helicopter.
"The cost to buy a weapon system out of the factory, such as the AH-64 helicopter, usually is less than the cost to operate and maintain the weapon over its life," explains the Project on Government Oversight report. "Parts on a weapon have to be replaced at varying intervals and, similar to how the human body replaces most cells in the body in less than a decade, a major weapon system with a long-enough life span may eventually be largely rebuilt with new spare parts."
The Pentagon inspector general who filed the report recommended that the Defense Department seek a refund from Boeing for the lost tax-payer dollars, but the Army declined to do so. Instead, it cited previous price-fixed contracts which it entered with Boeing that do not require adjusting part prices based on what they may be selling for after the fact.
Though certainly not the first to take advantage of the government procurement process, Boeing may have struck a chord in a particularly sensitive fiscal environment as debt-ceiling talks heat up on the Hill and lawmakers struggle to rein in spending.