Boeing Co. agreed Thursday to pay the U.S. government $25 million to settle claims the company did defective work on critical military refueling planes in Iraq and Afghanistan.
The settlement arose out of a whistle-blower lawsuit filed in Texas by two former Boeing workers who will now receive $2.6 million for drawing attention to the issue.
The Justice Department had investigated the Chicago-based aerospace giant for allegedly defective work on the Air Force fleet of KC-10 Extenders, which are used for in-flight refueling in the Iraq and Afghanistan war theaters.
The work was done while performing maintenance on the planes at the Boeing Aerospace Support Center in San Antonio, Texas.
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The government investigation found Boeing overcharged the government for installing insulation blankets by padding the estimated hours of work and charging an excessive hourly rate for labor.