Pentagon Ban on GE Bids Lifted Except for Firm’s Space Division

Three weeks after it suspended General Electric Co. from bidding on Pentagon contracts, the Air Force Thursday lifted its ban on all but one division of the giant manufacturer.

The suspension, announced March 28, followed by two days the indictment of GE, the nation’s 10th-largest corporation, on federal fraud charges stemming from allegations that company officials had altered employee time cards.

The suspension remains in effect against the company’s space systems division, “which was responsible for the alleged alterations,” the Air Force said.

A federal grand jury alleged that the company had defrauded the government of $800,000 by altering time cards and other records to make it appear that cost overruns on a Minuteman nuclear missile contract had occurred on other government projects, for which reimbursements were available.

High-Tech Gear

The company supplies the Pentagon with high-performance jet engines, long-range radar systems and other high-technology gear.

The Air Force said that General Electric had agreed to place four senior vice presidents on a board to review the company’s compliance with government contracts. The panel will have the authority to fire employees.

GE will also hold its division chiefs responsible for any overcharging in their areas, strengthen its auditing procedures and report monthly for the next year on its progress in carrying out the plan.

The company, which has denied any wrongdoing, said in a statement that it was pleased that Air Force Secretary Verne Orr “has partially lifted the suspension.”