WASHINGTON (AP) _ McDonnell Douglas Corp. agreed Wednesday to pay the government $2 million to settle allegations it overcharged for repairing equipment used to build the C-17 Air Force cargo plane.

The Justice Department also announced that the company, a wholly owned subsidiary of The Boeing Co., would pay $1.1 million to a former employee, Douglas Oberman, who initially raised the allegations.

Assistant Attorney General Frank W. Hunger said the government's agreement with the company settles a lawsuit originally filed by Oberman in Los Angeles in 1991 under provisions of the False Claims Act that allow private citizens to sue over frauds against the government and collect part of any amounts recovered.

McDonnell Douglas agreed that its payment to the government will not be tax deductible. Oberman consented to dismissal of the case in a separate settlement.