Boeing Won’t Challenge Suspension by Air Force

Boeing Co., the world’s largest satellite maker, said it wouldn’t fight the suspension of three space business units by the U.S. Air Force and instead planned to focus on regaining the right to bid for new contracts.

The Air Force suspended the units July 24 after finding they possessed thousands of pages of Lockheed Martin Corp. documents at the time Boeing beat Lockheed for $1.5 billion in rocket-launch contracts. The Air Force also withdrew launch contracts worth as much as $1 billion.

“While we disagree with some of their findings, we accept the Air Force decision,” said Dan Beck, a Boeing spokesman.

Spending on launch vehicles by the Air Force is planned to reached $8.2 billion in fiscal 2004 through 2009, and as many as 20 launches may be awarded this year. Lifting the suspension depends on Boeing showing that its corporate ethics program and other safeguards will prevent misuse of competitor documents in the future, said Steven Shaw, the Air Force’s deputy general counsel for contractor responsibility.

Boeing will make its case to Shaw on Aug. 24, and he’ll recommend what action the Air Force should take.

Shaw said the suspension could be reinstated if a Los Angeles grand jury reviewing the case decides to indict Boeing officials or the company.