BOEING SETTLES SUIT WITH AIR FORCE.

Byline: Daily News Staff and Wire Services

Boeing Co. will soon receive $295 million from the U.S. government to settle a dispute with the U.S. Air Force over payments for a gunship aircraft modified in Palmdale, Justice Department and Air Force officials said.

The settlement stems from a dispute dating back to 1990 when Rockwell International Corp. filed a claim with the Air Force that the company had spent millions of dollars of its own money to pay for work that went beyond original contract requirements.

Rockwell International sued in 1995 seeking $785 million, which included interest. Boeing purchased Rockwell's aerospace and defense units for $3.2 billion in 1996 and took over the case.

The U.S. Treasury Department has been instructed to make the payment in one lump sum, said Justice Department spokeswoman Chris Watney. ``We expect that Boeing will receive the payment shortly, if they haven't already received it,'' she said.

``The resolution is an acceptable resolution,'' said Boeing spokesman Paul Guse. The Air Force will reimburse the Treasury from its current appropriations, said spokeswoman Gloria Cales.

The dispute involved work on the AC-130, an attack version of the C-130 Hercules helicopter equipped with sophisticated infrared sensors and low-light television cameras for night operations. The sensors pick targets and aim weapons that include a 105 mm howitzer, 40 mm cannon and two 20 mm Vulcan cannons.

The special gear was added at Rockwell's Palmdale plant.

The aircraft has been used in every military operation since the 1983 invasion of Grenada. A new version of the gunship with radar that can detect targets through cloudy weather has been flying missions in Bosnia to enforce the Dayton peace accords.