According to a report from Responsible Statecraft, top military contractors have overcharged the Pentagon by more than $1.3 million in markups on non-competitive contracts, including roughly $200,000 for a mere four trash cans.
Citing Pentagon contracting data, Responsible Statecraft reported that the Defense Department paid Boeing more than $200,000—or roughly $51,606 per trash can—in 2020. The next year, it paid $36,640 each for 11 trash containers, resulting in a total cost of more than $400,000.
“The apparent overcharge cost taxpayers an extra $600,000 between the two contracts,” Responsible Statecraft said.
The trash cans, made for the E-3 Sentry surveillance and radar plane based on the 707 civilian airliner, previously cost about $300 apiece. But when the 707 fell out of use in the U.S., the trash can ceased being a “commercial” item—meaning that Boeing was not obligated to keep its price at previous levels, according to Responsible Statecraft.
In another case, Responsible Statecraft found that the Pentagon paid $49,000 apiece for 13 radio filters that previously cost only $350.
“The examples revealed here represent only a small portion of what experts say is a pattern of contractors overcharging DoD for a wide range of parts and weapons systems, a practice that reduces military readiness and drives up spending,” Responsible Statecraft said.
The publication’s findings follow a recent investigation by 60 Minutes, which highlighted rampant price gouging in the arms industry—including one case in which Boeing overcharged taxpayers by more than half a billion dollars for missiles used in the Patriot missile defense system.
Since then, a bipartisan group of senators has called on the Pentagon to investigate the apparent price-gouging.
“Lockheed Martin, General Dynamics, and Raytheon Technologies have each reported all-time highs in demand following Russia’s invasion of Ukraine, allowing the companies to give shareholders nearly $20 billion last year through stock buybacks and dividends,” Responsible Statecraft said.
“And the CEOs of the top five weapons makers each make between $18 million and $23 million per year.”
Responsible Statecraft added that about half of the Biden administration’s $842 billion Pentagon budget request goes to contractors.
“In 2022, roughly 30 percent of military spending went to the ‘big five’ weapons makers, which include Raytheon, Boeing, Lockheed Martin, General Dynamics, and Northrop Grumman,” the publication said.
Boeing reportedly declined to comment on its alleged price gouging, while Jamaica Bearings—the company that sold the radio filters—did not respond to questions from Responsible Statecraft.