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GAO sustains two protests over Boeing contract awards.

The Government Accountability Office recommended that the Air Force reopen competition for two multibillion dollar contracts that were awarded to Boeing Co. because the aerospace giant received favorable treatment from Darleen Druyun, former deputy acquisition chief for the Air Force.

Druyun admitted favoritism toward the company because Boeing hired her daughter and son-in-law and eventually herself. She is serving a nine-month prison sentence.

GAO sustained separate protests brought by Lockheed Martin Corp. and other losing bidders. It urged the Air Force to recompete major portions of a contract to upgrade C-130 transport planes and another one to develop a small diameter bomb.

GAO said Druyun ordered changes in the ratings of Boeing and its competitors on the C-130 contract. It said Boeing has already performed some work under the contract, so only a portion of it should be reopened. The remaining portion is worth up to $3 billion, The Wall Street Journal reported.

Druyun acknowledged to federal prosecutors last year that she might have favored Boeing in awarding that contract.

The Air Force said it would comply with GAO's recommendation to recompete a portion of the small diameter bomb contract valued at about $1.7 billion. GAO found that Druyun influenced that award "particularly in modifying the contract requirements in a way that favored Boeing."

The Defense Department's inspector general is looking into eight other contracts worth about $3 billion that were awarded on Druyun's watch and that may have been tainted by favoritism.

The Defense Science Board is scheduled to report this month on its review of the department's acquisition practices.

(See related story, p. 1.)
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Publication:Set-Aside Alert
Geographic Code:1USA
Date:Mar 4, 2005
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