Posted: Wed, Jul 23, 2003, 10:38 AM ET (1438 GMT)
Boeing and the US Air Force are expected to reach a settlement in the next several days that will end an investigation into improper EELV contract bidding claims, but could cost the company $1 billion in lost launches. The Wall Street Journal reported Wednesday that Secretary of Defense Donald Rumsfeld is expected to review possible penalties that could be assessed against Boeing for acquiring and using proprietary Lockheed Martin documents when preparing its bid for the first Evolved Expendable Launch Vehicle contracts in the mid 1990s. The Journal reported that one proposed penalty being considered would strip Boeing of six launch contracts it previously won; those contracts would go to Lockheed, along with three of four new launch contracts that were scheduled to be awarded in the near future. The shift in contract awards would give Boeing and Lockheed Martin 16 EELV launches apiece. Boeing could also be disbarred from any launch vehicle contracts for one year, a largely symbolic move since the Pentagon would award no new launch contracts during that time regardless. Any settlement of the Air Force probe would not affect a federal lawsuit filed by Lockheed Martin against Boeing, as well as ongoing criminal cases against the employees involved.

Related Links:

•  Wall Street Journal article (subscription required)
•  Reuters article