Pentagon to Audit Boeing Contract

The Pentagon’s inspector general told the Air Force it would begin auditing a $2.5-billion bomb contract awarded to Boeing Co. last fall in the latest fallout from ethics scandals that have rocked the aerospace giant, according to sources familiar with the Pentagon discussions.

The audit, scheduled to begin in June, will focus on Boeing’s contract to build a new generation of bombs, one of the most expensive munitions awards in decades.

The competition to win the so-called Small Diameter Bombs contract was initially overseen by Darleen Druyun, the former Pentagon acquisition chief who got a job offer from Boeing while negotiating a separate, $23-billion aerial refueling tanker contract with the company.

Druyun pleaded guilty in April to a conspiracy charge. Her ties with Boeing have tarnished the company and contributed to a delay -- and possible derailment -- of the controversial deal to lease 100 Boeing 767s for use as aerial tankers.

A spokesman for the Pentagon’s inspector general declined to comment on the bomb contract audit, citing a policy of not discussing any pending or ongoing audits. A Boeing official said the company was not aware of an audit and couldn’t comment.

Earlier this year, Secretary of Defense Donald H. Rumsfeld asked the inspector general to review all defense contracts handled by Druyun to see whether they “may have been unduly influenced.”

The directive led to an audit of a $1.34-billion NATO contract won by Boeing to modernize early warning radar planes. Last month, the inspector general found that Druyun had a role in the improper restructuring of the 2002 deal.

The NATO contract was originally budgeted at $551 million but it ballooned to $1.34 billion. The deal is now being renegotiated at a lower price.

The decision to launch a formal bomb program audit suggests that the inspector general believes there are sufficient concerns with the way that contract was handled, one source said.

But some defense industry officials said they were puzzled by the audit because the contract was awarded nearly a year after Druyun left the Pentagon to work for Boeing. While at Boeing, Druyun worked on the company’s missile defense programs.

According to a Pentagon source, the bomb audit will focus on the contract’s “procurement strategy,” initially drawn up by Druyun in 2001 when she was one of Air Force’s top acquisition officials.

At the time, Boeing, Lockheed Martin Corp. and Raytheon Corp. began vying for the bomb contract. It called for making 250-pound bombs that would be small enough to fit in smaller fighter jets but be just as deadly as the current generation of 2,000-pound bombs.

Boeing won the contract, which calls for building 24,000 bombs over 10 years. The work is being handled at a Boeing unit in St. Charles, Mo.