August 13, 2009 — The Boeing Company

The Boeing Company agreed to pay $25 Million to settle claims that the company performed defective work on KC-Extenders, the U.S. Air Force’s aerial refueling airplanes.

The qui tam claims were filed by two former Boeing employees, Anthony Rico and Fernando de la Garza.

The allegations of the case were that Boeing defectively installed blanket kits on the KC-Extenders. The blanket kit is a critical component in the refueling planes, and consists of several thousand blankets resembling the insulation in a home. The blankets are installed on all inside surfaces of the aircraft and serve the critical functions of providing a thermal barrier to maintain temperature inside the aircraft, providing a vapor barrier to reduce corrosion caused by moisture build-up on the inside surface of the skin of the aircraft, and for noise reduction.

During an investigation triggered by the qui tam claims, the government also found that Boeing overcharged for the installation by inflating the estimates of the number of hours needed to perform the blanket kit work and by charging an excessive hourly rate for the work.

As a reward for having filed their qui tam claims, Mr. Rico and Mr. De la Garza will receive over $2.6 Million from the settlement.

See U.S. Dept of Justice Press Release 8/13/09

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