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Wednesday, October 1, 2003 - Page updated at 12:00 AM

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Boeing snares Air Force deal despite ongoing suspension

WASHINGTON — The Air Force yesterday awarded Boeing a contract to launch a spy satellite, waiving for the second time a suspension on new space business for the defense giant.

In July, the Air Force suspended three Boeing divisions for an indefinite period after an inquiry found the company broke federal laws during a 1998 competition to launch government satellites. Boeing employees possessed thousands of pages of proprietary Lockheed Martin documents during the competition.

The Air Force said it had no choice but to award the contract to Boeing because the program required a West Coast launch and Lockheed does not have a launch pad there.

The government prefers to launch low-orbit satellites from the West Coast and use the East Coast for high-orbit missions.

"This is a critical national-security mission, and since Boeing is the only launch provider that can currently meet the requirements of this mission, we believe it is in the best interest of the country to award Boeing this launch," Air Force Undersecretary Peter Teets said in a statement.

Boeing declined comment.

Teets said the waiver does not mean the end of the suspension, which was expected to last two to three months. The Air Force has said it expects the suspension to be lifted in time for Boeing to compete later this year to launch 15 to 20 satellites.

That contract is expected to be worth about $1 billion, industry analysts said.

Along with the Boeing suspension, the Air Force said it would help Lockheed Martin build a $220 million West Coast launch pad. That facility is not expected to be completed in time for the 2005 launch of the spy satellite under the contract awarded yesterday.

In August, the Air Force waived the suspension to extend a Boeing contract related to its Delta II rocket, which launches global-positioning-system satellites.

Copyright © 2003 The Seattle Times Company

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