Boeing Cited by Pentagon Over Quality Concerns Going Back Years

(Bloomberg) -- Boeing Co. was cited by the Pentagon for continuing quality, management and other deficiencies first issued more than two years ago, including problems related to production of its flagship F/A-18 and F-15 jets, according to documents and officials.

Flaws at Boeing’s St. Louis aircraft production facility ranged from missing, backwards and out-of-specification fasteners found on undelivered F/A-18s and F-15s to oversized holes, missing components and incorrect parts installed on the factory’s production line, according to four “Corrective Action Requests” issued by the Pentagon’s contractor watchdog.

Boeing Cited by Pentagon Over Quality Concerns Going Back Years

In other cases, planes under assembly inadvertently hit maintenance work stands or other equipment on the floor, damaging the aircraft, the Defense Contract Management Agency said in a statement to Bloomberg News.

Some of the issues remain unresolved after more than 904 days, according to records compiled by the agency. They included other programs at the company’s St. Charles, Missouri, facility as well as the St. Louis aircraft production line, the agency said.

As the Pentagon’s No. 2 contractor, Boeing’s situation is a sign of the types of accountability issues the Defense Department will increasingly have to show it can manage as companies benefit from a surge in military spending. The final appropriations bill for this fiscal year boosted defense procurement spending to $134 billion, $20 billion over the Pentagon’s initial weapons request for the year, and $131 billion is requested for procurement next year.

The Chicago-based company said it’s addressing the watchdog’s concerns.

“Boeing and the Defense Contract Management Agency work together to address open corrective action requests through the evaluation and implementation of solutions that resolve identified issues,” spokesman Philip Carder said in an email response to questions about the unresolved alerts.

“Boeing is either currently implementing corrective plans already approved by DCMA or awaiting approval from the agency on corrective plans we have submitted” for the four open requests, Carder added.

The watchdog is responsible for monitoring the performance of defense contracts at company facilities. It issues Corrective Action Requests, or CARs, of varying degrees of severity from a Category I -- the most basic -- to Category III and IV alerts that go to top management. Boeing has four Category III requests outstanding.

Trump’s Support

President Donald Trump has become a vocal advocate of Boeing’s fighter jets, regularly promoting their capabilities to visiting heads of state. The president’s fiscal 2019 budget plan requests $2 billion to add 24 Boeing F/A-18E/F Super Hornet jets next year and 110 jets through 2023. The Obama administration had proposed ending purchases of the plane this year.

“The F-18, my favorite plane, is a work of art,” Trump told an audience of Boeing workers in March at the St. Louis plant. “We just looked at different versions of it, and it is spectacular.”

Before this praise, however, the Pentagon’s top weapons buyer, Ellen Lord, brought up the unresolved quality alerts with Boeing Defense, Space and Security President Leanne Caret during a regularly scheduled Jan. 29 review of the company’s portfolio, the agency said in a statement to Bloomberg News.

Oldest Cases

“Since Ms. Lord brought the issue up, the DCMA and Boeing have had more substantive discussions regarding resolution,” according to the agency.

A CAR issuance is often followed by a lengthy back-and-forth between the company cited and the agency as they discuss the form and substance of an adequate corrective plan, drafts of the plan, its implementation and, eventually, verification that the highlighted problems were fixed.

The two oldest outstanding cases with Boeing remain unresolved after more than 900 and 800 days, respectively. The oldest was issued because Boeing had an ineffective corrective system that “failed to prevent recurrence of” deficiencies “identified through multiple repeat ‘safety of flight’” flaws, or “non-conformances.”

The second-oldest unresolved alert was issued for what’s called “ineffective control” of material that didn’t meet specifications because of the company’s “departure from contractual requirements regarding the identification, control and disclosure of non-conforming material,” the agency said.

F-15 Issues

A third unresolved request has been lingering for more than 737 days. It was originally issued to highlight inadequate “management responsibility” on the F-15 program. The agency found “repeat instances of aircraft damage” and safety “non-compliances” to technical orders that “demonstrated a failure in Boeing St. Louis top management” of a “commitment to ensure compliance to requirements.”

An agency synopsis prepared for senior Defense Department officials before Lord’s January meeting said that “to date, the CARs have been ineffective in preventing recurrence” of issues even after the agency invoked what at the time was $35 million in withheld payments intended “to focus and incentivize Boeing.” The company, however, “continues to display a pattern of focusing” more on actions to “maintain cash flow, increase profit and achieve contract award,” according to the synopsis.

While the four CARs remain unresolved to the Pentagon’s satisfaction, the amount withheld by the Pentagon has since been reduced to about $27 million, the agency said.

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