Architect of air refuelling deal to admit conspiracy charge as investigation claims Global Solutions improperly awarded
A new wave of troubling developments hit the US Air Force's campaign to lease and buy 100 Boeing 767-200 tankers last week.
Darleen Druyun, who was the air force's top acquisition executive before taking a job at Boeing, is expected to plead guilty on 20 April to a conspiracy charge, which carries a maximum penalty of five years in prison. As principal deputy assistant secretary for acquisition and management, Druyun helped to design the air refuelling lease package offered to Boeing.
Boeing fired Druyun, then a general manager in the company's missile defence division, along with chief financial officer Mike Sears in November. Sears had improperly contacted Druyun about the job before she had left her air force position, says Boeing.
A new investigation by the office of inspector general (IG), meanwhile, claims that Boeing was also improperly awarded the "Global Solution" $1.32 billion contract during Druyun's tenure to modernise the NATO E-3 Airborne Warning and Control System (AWACS) aircraft. The air force leadership requested the IG inquiry in December after Boeing acknowledged that Druyun's hiring in 2002 was handled improperly.
"Air force contracting officials awarded the Global Solution contract modification in December 2002 without knowing whether the $1.32 billion cost was fair and reasonable," says the IG report.
Initially, the air force had awarded Boeing a $551 million contract to upgrade NATO's AWACS fleet with new features, including multi-sensor integration, five more operator consoles, satellite communications and broadband radios.
Later, "Boeing encountered performance problems on the contract and a contract modification was developed to resolve those problems," the IG's report says. Druyun's office raised the contract amount to $1.32 billion, including $20 million more for spare parts and other costs not in the original contract, but failed to perform routine procedures, such as developing a government cost estimate, analysing the contractor's evaluation of labour costs and establishing guidelines on reasonable profit ratios.
As a result, the IG report urges the air force to halt new orders under the contract to Boeing for continuing work on the AWACS modernisation, and launch a "thorough analysis" of Boeing's technical and cost proposals before production and retrofit options are exercised.
The AWACS modernisation work, however, may still continue under a compromise deal proposed by the air force and supported by the IG. The compromise creates an undefined bridge contract that keeps production and retrofit work on schedule. New orders would be based on prices equal to or less than costs already deemed acceptable under the Global Solution contract.
Meanwhile, air force officials and NATO have agreed to launch a new review of Boeing's pricing and technical proposals, according to the IG. The air force also has asked the IG to review several other Boeing contracts negotiated when Druyun managed the air force's acquisition office, including competitive awards for the Small Diameter Bomb and missile defence work.
STEPHEN TRIMBLE / WASHINGTON DC
Source: Flight International
