Posted on 04/29/2005 10:49:30 PM PDT by Righty_McRight
WASHINGTON - The Boeing Co. must compete again for Air Force work worth more than $3 billion to upgrade C-130 cargo planes because of a conflict of interest in the original deal, the Air Force said
In a letter this week, Michael Dominguez, acting secretary of the Air Force, said a 2001 contract awarded to Boeing was tainted by Darleen Druyun, a former senior Air Force official who has admitted giving special treatment to the Chicago-based jet maker.
Druyun, who later took a job at Boeing, is now serving nine months in prison for violating federal conflict-of-interest laws.
The Air Force decision follows a Feb. 24 report by the Government Accountability Office upholding a protest by three rival bidders, who had complained that the C-130 contract award was tainted by Druyun's involvement.
The companies — Lockheed Martin Corp., BAE Systems North America and L-3 Communications Corp. — are among those expected to compete for new production and installation contracts when they are reopened in 2009 or 2010.
The original award was worth $4.1 billion, and Boeing will keep an ongoing development portion worth about $1 billion, Air Force officials said. The contracts to be rebid involve production and installation of upgraded electronic instrumentation on the C-130 transport planes.
In an April 26 letter to Comptroller General David Walker, Dominguez said the Air Force has accepted all of the recommendations in the GAO's report, including reimbursing the three companies for the cost of the protest and attorneys' fees.
Air Force spokesman Douglas Karas said the Air Force will continue to cooperate with a series of ongoing reviews and investigations of Druyun's work while she was a key acquisition official for the Air Force before retiring in 2002.
The Air Force "will work diligently to support the resolution of these issues," which include more than a dozen contracts going back more than a decade, Karas said.
Boeing spokesman Doug Kennett said the company supports the Air Force in its requirement to upgrade its C-130 fleet.
"We continue to focus on the successful execution of this important program, building on the extensive development work we have completed to date and the strong performance ratings we have received from the Air Force," Kennett said.
BAE spokesman John Measell said the Air Force decision "will help to restore public confidence in the integrity of the procurement process," adding that the company "will work with the Air Force to implement the GAO's recommendations."
Boeing shares rose 80 cents to close at $59.52 in Friday trading on the New York Stock Exchange. The stock has traded in a 52-week range of $42.29 to $60.10.
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On the Net:
Air Force: http://www.af.mil/
Boeing: http://www.boeing.com
Self ping for later.
Be this is part of the "package" that got the EU to back off selling Arms to the Chinese. Shameful
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