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Air Force suspends Boeing from contracts

July 24, 2003 at 7:07 PM

WASHINGTON, July 24 (UPI) -- Air Force officials Thursday suspended three Boeing Co. rocket units from federal contracts for violating bidding competition rules.

The bidding was for the Evolved Expendable Launch Vehicle Program. The Air Force said it expects the units will be reinstated without any problems.

A Washington watchdog group, Citizens Against Government Waste, said it was pleased with the move. The group's president, Tom Schatz, said: "The suspension will hopefully show that corporate espionage does not pay. The government should only award contracts to reputable, law-abiding companies. Companies, such as Boeing, that have not shown exemplary behavior can not be trusted with taxpayer dollars."

The controversy surrounds an EELV contract worth $1.3 billion. It called for Boeing to build 19 of the 28 missiles needed to launch spy satellites and other communications instruments, while Boeing's competitor, the Lockheed Martin Corp., built the other nine missiles. It's been alleged Boeing won the contract unfairly, by obtaining secret Lockheed documents.

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