Air Force Rushed Contract, Report Says

Procurement Official's Influence Worked in Boeing's Favor

Former Air Force procurement official Darleen A. Druyun, who admitted favoring Boeing Co. for years, may have led the government to overpay Boeing by as much as $4.5 million by hurrying a renegotiation of the company's contract in 2001 to maintain a fleet of refueling tankers, according to an Inspector General's report released last week.

The report is part of a Pentagon IG review of contracts influenced by Druyun, who pleaded guilty to negotiating a job with Chicago-based Boeing while overseeing billions of dollars of its work. Other reports have shown that Druyun favored not only Boeing but also Bethesda-based Lockheed Martin Corp.

The report released last week focused on a 1998 Boeing contract to maintain the KC-135 refueling plane. In 2001, Boeing asked that some of the contract terms be changed because of several problems, including the government's late delivery of equipment, the report said. Contracting officials thought Druyun wanted the new contract completed within six months, the report said, and agreed to pay Boeing $35.8 million of the $119 million it requested.

But a Defense Contract Audit Agency report released shortly after the contract negotiations were completed recommended paying the company $4.5 million less, the report said. Druyun's "influence resulted in the Air Force not waiting for a final contract audit that identified an opportunity to potentially reduce the program costs," the report said.

The contract was also changed to add more favorable terms for Boeing. The company was allowed to charge a management fee for work performed by a subcontractor, and requirements for government oversight were limited, the report said. The report did not discuss Druyun's motivation or whether her actions were improper.

In a response included in the report, the Air Force said contracting officers would be advised not to make final decisions on such negotiations until they have sufficient information. The Air Force is holding another competition for the contract, spokeswoman Capt. Olivia Nelson said.

In a statement, Boeing spokesman Bob Algarotti did not respond directly to the report but said the "Boeing team has invested a significant amount of time and money on the KC-135 PDM to implement lean initiatives that dramatically accelerate turnaround time, decrease cost and improve quality to better serve the" Air Force.