Audit: Boeing Contract Rigged

Boeing Co.’s 2001 contract to develop a sensor for U.S. weather satellites was “unfairly” awarded, according to a Defense Department audit made public Friday.

Darleen Druyun, a top Air Force acquisition official, rigged the selection process and in at least four instances “manipulated complex proposal evaluation ratings to benefit Boeing and hinder” Ball Aerospace and Technologies Corp., Assistant Inspector Gen. Paul Granetto wrote.

The $317-million contract was awarded July 30, 2001, nine months after Boeing, at Druyun’s request, hired her daughter, according to the July 10 audit.

“In this environment,” Druyun “could not be relied on to make an objective assessment,” Granetto stated.

She “lacked impartiality with respect to the contract winner” and “as a result, the Air Force unfairly awarded the contract to Boeing,” Granetto wrote.

Druyun served nine months in prison last year for arranging a job for herself with Boeing while negotiating with the company in 2002 on a $23-billion program for aerial refueling tankers.

She subsequently admitted in court that she gave Boeing favorable treatment. The satellite program is one of about 14 awards that the Pentagon and Air Force are reviewing.

The satellite sensor contract grew to $350 million before it was canceled last month, the Air Force said.

Ball Aerospace spokeswoman Roz Brown said the Boulder, Colo.-based company was “studying the report to determine an appropriate course of action.”

“At the time of the contract award, we strongly believed that our proposal offered best value and high technical quality to the government,” she said.

Boeing shares fell $2.34 to $77.25.