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Aircraft industry

Boeing Dealt Another Blow as GAO Recommends Reopening Contract

Strategic Insights

— 1 min read

US congressional investigators have delivered another significant blow to Boeing, recommending that the air force reopen part of a $4 billion contract to update the avionics on the C130 Hercules transport aircraft. The Government Accountability Office (GAO) concluded that the air force failed to demonstrate that a former procurement official's bias did not prejudice other companies. This decision comes after Lockheed Martin, L3 Communications, and BAE Systems protested the original contract, citing favoritism towards Boeing.

Key Takeaways:

  • The GAO recommended that the air force allow companies to compete for the installation part of the original contract.
  • The GAO also recommended that the air force investigate reopening the entire contract due to concerns about favoritism.
  • This is the second ruling against Boeing in a week, with the GAO previously recommending that the air force reopen part of a $2.4 billion contract to build small-diameter bombs.
  • Darleen Druyun, a former air force procurement official, admitted steering contracts to Boeing and was sentenced to nine months in prison.
  • Mike Sears, former Boeing chief financial officer, was sentenced to four months in prison for his role in recruiting Druyun.
  • Boeing has stated that they will await the air force's decision on the GAO's recommendations.

Statistics:

  • The original contract to update the avionics on the C130 Hercules transport aircraft was worth $4 billion.
  • Lockheed Martin, L3 Communications, and BAE Systems protested the original contract, citing favoritism towards Boeing.
  • Darleen Druyun, a former air force procurement official, was sentenced to nine months in prison for her role in steering contracts to Boeing.
  • Mike Sears, former Boeing chief financial officer, was sentenced to four months in prison for his role in recruiting Druyun.
  • The GAO recommended that the air force reopen parts of two separate contracts: the avionics upgrade contract worth $4 billion and the small-diameter bomb contract worth $2.4 billion.

Sources:

  • Government Accountability Office (GAO)
  • Washington Post
  • Boeing
  • Lockheed Martin
  • L3 Communications
  • BAE Systems

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