Boeing Is Expected to Regain Right to Bid on U.S. Rocket Contracts

The Air Force is expected to allow Boeing Co. to begin bidding on government rocket contracts again in the next few weeks after banning the company from doing so since July for illicitly using a rival’s records to help win deals, a published report said Monday.

Citing unidentified sources, the report said senior officials from Boeing and the Air Force are putting the final touches on an agreement that would restore the company’s full privileges as a military contractor.

Boeing will pay the Air Force’s investigative costs and commit to regular updates to the Pentagon on compliance with new ethics policies it implemented after last year’s scandal, according to the report, published in the Wall Street Journal.

The deal would make Boeing eligible again for government rocket work that could total as much as $5 billion through the end of the decade. The Air Force’s suspension of Boeing last year left Lockheed Martin Corp. as the government’s only launch contractor.

But the agreement would not resolve Justice Department criminal and civil investigations, which the Journal said could cost Boeing $250 million or more in fines and penalties.

Air Force spokeswoman Angela Billings declined to comment on the report.

Boeing spokesman Dan Beck said the company has been working with the Air Force toward an agreement but he could not discuss the terms or a timetable. He said Boeing has, among other steps, created an office of internal governance for ethics and procurement issues and revised its employee training and outreach.

“We’ve worked closely with the Air Force ever since the suspension last year to provide them with everything they needed,” Beck said.

Boeing took unspecified personnel actions in the wake of the scandal, in which employees are alleged to have illicitly acquired and hidden from the Air Force thousands of pages of documents from Lockheed to gain a competitive edge in contract bidding. The Chicago-based company, the largest private employer in Southern California, has blamed since-dismissed employees for the wrongdoing.

The Air Force stripped Boeing of $1 billion in launch contracts and suspended three of the company’s units from bidding on new rocket business.

Air Force officials initially said the punishment was likely to last only a few months, pending completion of related criminal and civil proceedings.

Boeing shares rose 70 cents to $42.54 on the New York Stock Exchange.