Boeing Deal Is Found to Be Improper

The Air Force improperly awarded to Boeing Co. a $1.32-billion contract to upgrade airborne early warning and control planes for NATO, the Pentagon’s chief watchdog said Thursday.

The deal was negotiated by Darleen Druyun, the Air Force’s former No. 2 procurement official who was hired one month later by Boeing, said Inspector General Joseph Schmitz.

Druyun is scheduled to plead guilty Tuesday to a felony count of conspiracy in another Boeing-related matter.

She has agreed to cooperate with prosecutors investigating a possibly tainted $23.5-billion Air Force plan to lease and buy Boeing 767 jetliners for use as aerial refueling tankers.

Air Force contracting officials awarded the NATO E-3A airborne warning and control system contract in December 2002 “without knowing whether the $1.32-billion cost was fair and reasonable,” Schmitz wrote.

The Air Force should withhold options under the contract until a final negotiated price is determined to be “fair and reasonable,” the study recommended.

Chicago-based Boeing said it had volunteered to renegotiate the contract even though, it said, Schmitz did not “point to or suggest any wrongdoing” by Boeing.

The Air Force said it supported Schmitz’s conclusions and recommendations.

Druyun was hired by Boeing in January 2003 as a vice president and deputy general manager for missile defense projects. She was fired Nov. 24 along with Michael Sears, Boeing’s chief financial officer. Boeing said they had tried to cover up improper discussions of a job for Druyun while she was still supervising Boeing-related contract matters at the Air Force.