The Air Force, after tough talk about barring Rockwell International Corp. from defense business, lifted a suspension yesterday, saying the maker of the B1 bomber has corrected fraudulent practices.
Rockwell has taken steps "in good faith" to remove people and correct practices that it admitted were involved in padding bills to the Air Force on a contract for aircraft data processing equipment and spare parts awarded to the firm's Collins Communications System Division in Dallas, the Air Force said.
On Oct. 31, a day after Rockwell pleaded guilty to a 20-count criminal indictment charging that six Collins employes had falsified time cards to raise the Air Force's bill, then-Air Force Secretary Verne Orr formally proposed that Rockwell be barred from further government work.
While that debarment was being considered, Rockwell was suspended from doing such work.
"I've take this action to protect the taxpayers' interest and to send another clear signal that the Air Force won't tolerate this or other kinds of fraud regardless of the size of the contractor," Orr said then.
Russell A. Rourke, formerly head of congressional relations at the Pentagon, was sworn in as Orr's successor yesterday. The Air Force said its undersecretary, Edward C. Aldridge Jr., recommended reinstating Rockwell.
Defense Department spokesman Robert B. Sims said last night that Defense Secretary Caspar W. Weinberger and his deputy, William H. Taft IV, were fully involved in the reinstatement and saw no justification for keeping the firm suspended in light of its reforms.
Weinberger has said contractors who cheat the government should be punished.
Rockwell's reinstatement came a day after Weinberger issued a warning that General Dynamics Corp., suspended last week by the Navy after a grand jury indicted the firm for overcharging the government, may not be able to bid on building four Los Angeles-class nuclear attack submarines.
The Navy has extended deadline for bidding on those submarines in hopes that, in the meantime, General Dynamics can make corrective action needed for reinstatement as a bidder.
Defense officials acknowledged that issuing a threat against one major contractor Tuesday and reinstating another giant yesterday undercut the "get-tough" image that Weinberger and Taft are trying to project.
Sims said Weinberger "is looking for additional ways" other than suspensions to discourage fraud but had no basis for continuing to bar Rockwell from government work.
The Air Force said Rockwell has installed "a new cost-accounting system, revised and increased employe time-card training, increased the frequency of internal audits" and appointed an ombudsman to whom employes will report misconduct within the firm.
In pleading guilty to the criminal indictment, Rockwell agreed to pay $1.2 million in fines and restitution plus government costs of conducting the investigation. The government had said Rockwell overcharged the government by $480,000, primarily by falsifying time cards.
The Air Force was unable to cite any major contracts lost during the firm's 42-day suspension.
Rockwell received $6.2 billion in Pentagon contracts in fiscal 1984, making it the nation's second largest defense contractor. The firm is prime contractor for the National Aeronautics and Space Administration.