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Boeing Satellite Suspension Continuing-Pentagon
Reuters ^ | Tue Nov 9, 2004 | Andrea Shalal-Esa

Posted on 11/09/2004 4:58:12 PM PST by anymouse

WASHINGTON, Nov 9 (Reuters) - Boeing Co. (BA.N: Quote, Profile, Research) will likely remain banned from launching military satellites until the U.S. government determines if a former Air Force official, who admitted favoring the company on some contracts, tainted a 1998 competition for the rocket launches.

Acting Pentagon acquisitions chief Michael Wynne said a thorough review was needed to assess whether former No. 2 Air Force acquisitions official Darleen Druyun helped award Boeing the lion's share of a $1.9 billion contract under the Evolved Expendable Launch Vehicle program.

"It's really hard for the Air Force to move forward now that this has all come out," Wynne told reporters at his Pentagon office. "We've got to sweep away any allegations of ethical misconduct."

The extent of Druyun's influence on the EELV contract remained unclear, Wynne said.

The Air Force suspended three Boeing units from receiving new launch contracts in July 2003 and stripped Boeing of about $1 billion in pending launches after concluding Boeing had illegally obtained more than 25,000 documents from rival Lockheed Martin Corp. (LMT.N: Quote, Profile, Research) during 1998 bidding for EELV.

Federal prosecutors have charged three former Boeing officials in an ongoing probe into allegations that Boeing stole trade secrets from Lockheed in the EELV competition.

The Air Force had hoped to lift the suspension this summer, but the Druyun revelations stalled the process again, Wynne said.

Until the suspension is lifted, Boeing cannot bid for some 24 rocket launch contracts valued at more than $2 billion that the Air Force plans in 2005.

Druyun was sentenced in October to nine months in federal prison after admitting she had favored Boeing in contracts going back as far as 2000, prompting legal challenges by Lockheed and other companies that lost contracts to Boeing.

Those challenges are being referred to the Government Accountability Office, the auditing arm of Congress, for a review that must be completed within 100 days, Wynne said.

Lockheed has filed a protest seeking review of contracts handled by Druyun and return of certain bid and proposal costs, including those spent on EELV.

Boeing had said it remains confident it will meet the Air Force's conditions for lifting the suspension, including creation of an Office of Internal Governance, tougher hiring and employment practices and more ethics training.

Lockheed filed a civil suit against Boeing in June 2003, charging Boeing used Lockheed documents to win the lion's share of a $1.9 billion contract to launch U.S. spy satellites.

Boeing has admitted that some of its employees had Lockheed documents, but insists they did not factor into the company's successful EELV bid.


TOPICS: Business/Economy; Extended News; Government; News/Current Events; Technical
KEYWORDS: boeing; defense; eelv; lockheed; pentagon; satellite; space
Bad news for Boeing.
1 posted on 11/09/2004 4:58:12 PM PST by anymouse
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To: anymouse

I'd like to hear who the other people inside Boeing are that the article mentions - just to see if I know them.

The Lazy B needs a real close inspection to get its' house back in order. The mismanagement flowing from the MacDac takeover is stupendous. It has always seemed more like MacDac took over Boeing and then just kept the Boeing name.

Space/Defense Group (Black Hole) needs to become divorced from Commercial Aircraft Group, letting it sink or swim on its' own. The production mentality from the commercial side is starting to infect Black Hole, which could functionally bring down both sides.


2 posted on 11/09/2004 5:10:07 PM PST by datura (Rabies and lead poisoning combined with advanced syphilis approximates liberalism.)
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To: datura

If DoD executed an across-the-board, top-to-bottom, objective review of 100 DoD contracts big and small selected at random, and the results were made available to the MSM, then contemporary liberals (not the same as classical liberals) would have all the fodder they need to cut DoD spending by 30-60%. Even with Republican majorities in both House and Senate. I say this as a fairly conservative person who would like nothing more than for our DoD $ to buy the best value solutions in support of "the common defence."


3 posted on 11/09/2004 5:23:51 PM PST by Resolute
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To: datura
I'd like to hear who the other people inside Boeing are that the article mentions - just to see if I know them.

Ken Branch
Bob Crawford
Bill Erskine

4 posted on 11/09/2004 5:37:10 PM PST by So Cal Rocket (Proud Member: Internet Pajama Wearers for Truth)
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To: anymouse

5 posted on 11/09/2004 6:40:52 PM PST by Mentos
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