Archive for Wednesday, March 31, 2004

Pentagon report indicates Boeing investigation widening

March 31, 2004


— A Defense Department inspector general's audit report on the negotiations between the Air Force and the Boeing Co. on a new aerial tanker indicates that investigations into possible criminal conduct have widened, according to officials who are knowledgeable about the report.

The audit report finds that the Air Force tailored the Operational Requirements Document to the Boeing 767, and the Air Force and Boeing failed to meet important requirements that would make the aircraft fit for war, the officials told Knight Ridder, speaking on condition of anonymity because the report isn't expected to be released until next week.

The inspector general's office is examining whether Boeing and the Air Force improperly negotiated a $23.5 billion deal to supply the military with 100 tankers. Congressional investigators told Knight Ridder it was increasingly clear that the contract was based on an invalid specifications document and didn't meet the needs of the military services.

The Air Force ultimately agreed to lease 20 tankers and buy 80 from Boeing. The deal has been suspended until investigations are concluded.

The audit report suggests that at least one Air Force official, who hasn't been identified, may be subject to a criminal investigation into whether he was truthful with officers who work for the chairman of the Joint Chiefs of Staff. The allegations involve an Air Force briefing to Joint Chiefs of Staff officers on the revised tanker specifications.

The audit report says the first 100 versions of the Boeing 767 tanker wouldn't meet the Air Force's key requirements. For example, they wouldn't be able to refuel multiple aircraft simultaneously and wouldn't be able to be used for other missions, such as medical evaluations. The Air Force plans to buy more tankers in the future.

The report says the Pentagon's Joint Requirements Board, which reviews all contracts to make sure they meet the needs of all the services, validated the Air Force's revised Operational Requirements Document. But in doing so, it relied on assertions by the Air Force that the document hadn't been tailored to fit the Boeing 767.

During a June 7, 2002, briefing of the Joint Requirements Board, officials on the board asked the Air Force official who was giving the briefing a direct question: Has this document been tailored to fit the 767? The briefer replied, "No." The IG report indicates that that wasn't the truth.

The officials said investigators also were focusing on whether Boeing's alleged participation in modifying the Air Force specifications involved misconduct and conflict of interest.

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