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Pentagon to Reopen Bidding

Boeing initially won the Small Diameter Bomb pact, but auditors said it might be tainted by a procurement scandal.

February 26, 2005|Peter Pae | Times Staff Writer

The Air Force said Friday that it would reopen to competition a portion of a $4-billion munitions contract awarded to Boeing Co.

The decision follows the recommendation of the Government Accountability Office, which last week said the Small Diameter Bomb contract might have been tainted by the undue influence of disgraced former Air Force official Darleen Druyun.

In a full GAO report released Friday, the federal audit agency said Druyun might have influenced the deletion of technical requirements for phase two of the contract. Druyun received a nine-month prison term last fall after admitting she favored Boeing on several contracts because the company had given jobs to members of her family.

The Air Force had initially planned to keep Boeing as the sole supplier for the bomb contract. It will now be open to other bidders, including Lockheed Martin Corp., which protested the initial award. The second phase is potentially worth about $1.7 billion, the Air Force said.

The GAO cautioned that the changes to the technical requirements could have been made without Druyun's influence and that Lockheed would not have necessarily won the competition without the changes.

Still, it said the Air Force should reopen competition as a way to "preserve the integrity of the procurement process."

Boeing shares rose $1.05 to $54.99 on the New York Stock Exchange.

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