Inland Empire and Associates: Cash for Boeing’s Competitor Prices

In the Boeing subcontract case, the owner of Inland Empire and Associates helped pay a Boeing procurement officer for competitors’ bids and historical prices. In its June 2014 announcement of the consultant’s guilty plea, the Justice Department described how that information helped J.L. Manufacturing prepare bids for military-aircraft parts. Someone inside the bidding process could see the advantage before a purchase order existed: one supplier knew prices its competitors had entrusted to the buyer.

The Consultant Between Boeing and the Machine Shop

Inland Empire and Associates, based in Las Vegas, Nevada, consulted for defense aircraft manufacturers and parts suppliers. Its owner personally advised J.L. Manufacturing on numerous Boeing subcontracts, according to the Justice Department’s account of the criminal case. J.L. was an aerospace machine shop in Everett, Washington, specializing in hard metals and capable of producing small to medium-sized complex parts. Its owner ran the business and oversaw its finances.

Boeing’s Defense Space and Security Division supplied military aircraft to the Defense Department and the armed services. The procurement officer worked for Boeing, with procurement operations in St. Louis. The later Justice Department account of the criminal case identified J.L.’s work as subcontracts on government F-15 fighter jet contracts.

A purchase order can itself be a subcontract under the federal acquisition definition. Here, the information moved through a consultant working for the machine shop, while Boeing issued the orders for parts destined for military aircraft.

The plea announcement placed the consultant’s scheme between May 2011 and April 2013. The Boeing employee supplied nonpublic competitor-bid information and historical price information through the machine-shop owner and the consultant. The machine-shop owner used it to prepare and submit bids. In return, the participants made cash payments to the Boeing employee in St. Louis and California.

The consultant pleaded guilty to mail fraud and wire fraud. His role was to help carry information between the purchasing employee and the supplier seeking the work. We see the central absurdity in that arrangement: the buyer’s employee was selling access to the prices the buyer was supposed to evaluate. The suppliers who trusted Boeing with their prices were bidding against their own numbers.

Purchase Orders and Cash Payments Were Different Money

J.L. Manufacturing used the information in bids on approximately nine Boeing requests for quotes and won seven purchase orders totaling approximately $2,052,746. That was the value of orders for military-aircraft parts.

The Justice Department’s later criminal-case announcement put the Boeing employee’s receipts at approximately $250,000 from J.L. Manufacturing and another subcontractor, Globe Dynamics, combined. It described the consultant and J.L.’s owner making cash payments to that employee.

For an insider, those are different trails. The purchase order identifies the work awarded and its price. The payment to the procurement employee explains what bought access to the information.

What Are the Red Flags in Procurement Fraud?

Nonpublic rival bids reaching a supplier before it submits its own price, with cash moving back to the purchasing employee, are the red flags this case makes concrete. The Justice Department’s account connects the information, the bid preparation, the resulting orders and the payments. Each step gives someone in a different part of the business a view of the same arrangement.

In the criminal account here, the supplier received competitors’ bids and historical prices while preparing its own offers. The advantage began before Boeing compared the submitted prices.

The useful comparison is between the information available inside purchasing and what reached the supplier’s bid preparation. A consultant’s message can explain where a price came from. A bid version can show what changed after the message arrived. The request for quotes and resulting purchase order can connect that change to the specific parts and work. Those are connections we examine with an insider.

A 2022 report from Transparency International Defence and Security, examining U.S. private military and security companies, identifies a broader reason to look below the prime contractor. Its discussion of subcontracting describes the opportunity created by a long chain of businesses:

In the Boeing case, the consultant’s communications and the procurement employee’s cash receipts explain the connection that a purchase order alone cannot. Knowing which business won the work is only the beginning. The insider may know who supplied the information that helped it win.

What Proof Do You Need as a Whistleblower?

The useful proof connects what you saw inside the business to the information used in a bid, the purchasing decision and government money. For a defense contractor whistleblower claim, we examine who supplied the price information, who used it and which award or payment it influenced. A bid preparer may recognize the source of a number. Someone handling payments may understand the consultant’s role from a different direction. The Justice Department credited the Defense Criminal Investigative Service and the Federal Bureau of Investigation among the investigators in this case.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We look for where the hidden arrangement reached government money. If you have questions about protection when speaking up at work, we work through them with you.

When You Know Where the Winning Price Came From

If you saw nonpublic bid information pass through a consultant or know about payments to a purchasing employee, talk to our whistleblower experts about the bids behind the orders. We work beside you to build your strongest case from the information exchanged, the people making the decisions and the government work they influenced. We bring in defense contractor fraud whistleblower lawyers who understand subcontract purchasing and stay with you through the case.