News - Boeing rocket contracts taken away - Reuters

Boeing rocket contracts taken away

Air Force hands over $1 billion in work to Lockheed Martin


WASHINGTON, July 24 - The U.S. Air Force on Thursday announced it
would shift rocket launch contracts valued at about $1 billion from
Boeing Co. to its rival Lockheed Martin Corp. for acquiring around
25,000 Lockheed documents during a 1998 contract competition.

Air Force Undersecretary Peter Teets said Boeing would lose seven of
the 19 contracts it won under the Evolved Expendable Launch Vehicle
(EELV) program in 1998. The Air Force also disqualified Boeing from a
second set of three launches that would now go to Lockheed.
Boeing has committed serious and substantial violations of federal
law, Teets told reporters, noting that he had never seen a case of
procurement violations of such magnitude.

The Air Force stopped short of debarring or banning Boeing from
government contracts, but said three business units of Boeing
Integrated Defense Systems and three of its former employees would be
temporarily suspended from future government work until corrective
action was taken, Teets said.

He said Boeing could be reinstated as an approved contractor within 60
to 90 days, in time for the company to bid for 15 to 20 additional
launches to be awarded late this year.
As a matter of policy, we do not tolerate breaches of procurement
integrity and we hold industry accountable for the actions of their
employees, Teets told reporters.

Boeing said would ask all 78,000 employees in the affected division to
stand down on July 30 and attend briefings on a scandal that resulted
in the Air Force suspending some Boeing units from new work.
We are extremely disappointed by the circumstances that prompted our
customer’s action, but we understand the U.S. Air Force’s position
that unethical behavior will not be tolerated, Boeing Chairman and
Chief Executive Phil Condit said in a statement.

A spokesman for Lockheed Martin, which has filed a separate civil
lawsuit against Boeing in the case, welcomed the Air Force’s actions
and said it stood ready to take on the new work.
We’ve got the capability. We can handle the additional launches, and
the increased volume will not pose any problems, says Tom Jurkowsky.


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