Boeing Withdraws Bid for Pentagon Reimbursement : Error Claimed in Charges for Political Gifts

Boeing Co., stung by publicity about its billing practices, has withdrawn its request for Pentagon reimbursement of more than $300,000 in political and other contributions, and it has pulled back for review millions of dollars of other charges.

A Boeing spokesman said the political contributions were billed to the Pentagon by mistake and that the action conflicted with a written agreement between the company and the Defense Department.

Earlier, however, the company told reporters that such expenses were routinely billed to the government as legitimate community relations or public relations costs to be added to the price tags of Boeing-built military aircraft and weapons systems.

Plans to Resubmit Claims

Boeing intends to resubmit the bulk of its overhead claims to the Pentagon for payment after an internal examination of the charges, company spokesman Craig Martin said.

But Boeing will not to press for payment on $304,936 in bills from 1982 through 1984 for contributions, many of them to political candidates and organizations.

Federal acquisition regulations state that “contributions and donations are unallowable.”

Martin said Boeing will continue to seek payment from the government for contributions to so-called “voter-interest groups” attempting to influence legislation on issues of interest to Boeing.

Defense Department officials have promised members of Congress that when the overhead claims are resubmitted “they will be closely reviewed for unallowable costs, including contributions and donations.”

Amount of Money Uncertain

The Boeing spokesman said he did not know when the company’s review of its overhead charges would be completed. And he said he did not know--and could not say even if he did--how much money was involved.

Although Boeing would not reveal the overhead costs, the magnitude of such billings can be seen in the Pentagon’s recent order impounding $30 million in overhead charges each month for General Dynamics, the nation’s largest defense contractor, pending a review of questionable claims.

Boeing was the nation’s fifth-largest defense contractor--based on $4.4 billion in defense contracts--in fiscal 1983, the latest year for which complete figures are available.

Questioned by Auditors

Boeing’s action to withdraw billings for political contributions and to review all other pending overhead costs closely followed a report in early March that $126,000 in 1982 political contributions were among costs questioned by Pentagon auditors.

At the time, Boeing said it would withdraw $60,075 in 1982 contributions to political candidates but would seek payment for other questioned costs, including donations to political parties, campaign committees and political action commitees.

Martin said that it is now the company’s position that the inclusion of any political contributions in Pentagon billings was “totally inadvertent” and “a mistake on our part.”