[Congressional Record (Bound Edition), Volume 149 (2003), Part 15]
[Senate]
[Page 20055]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         BOEING EELV VIOLATIONS

  Mr. ALLARD. Mr. President, last week, the Under Secretary of the Air 
Force, Peter Teets, announced the Air Force's determination that the 
Boeing Company had committed serious violations of Federal law by 
illegally acquiring thousands of documents from its chief competitor, 
Lockheed Martin. Apparently, the Boeing Company used this information 
to underbid Lockheed during the billion-dollar Evolved Expendable 
Vehicle competition. Boeing's illegal activity probably cost Lockheed 
Martin hundreds of millions of dollars in contracts and did serious 
damage to the Federal Government's procurement process.
  As a result, the Air Force has punished the Boeing Company by 
suspending Boeing's Launch Systems, Services, and Delta business units 
for an indefinite period of time. The Air Force also reduced the total 
number of Boeing launches by seven. The Air Force increased the total 
number of launches for Lockheed by the same number.
  The Air Force granted Lockheed Martin permission to develop a west 
coast launch capability at Vandenberg Air Force Base, which will give 
Lockheed an opportunity to compete for launches from this critical 
base. This decision will give the Air Force more flexibility in 
awarding launches in the future.
  I was pleased by the Air Force's decision. Integrity of the 
procurement process is essential and nothing less than the highest 
standards should be expected. Boeing's actions are a major 
disappointment, and it is my hope that the Air Force's decision will 
serve up as a wake-up call, not just for this company, but for all 
companies doing business with the Department of Defense.
  Boeing must not take measures to ensure that its employees know that 
this activity is unacceptable. To this end, the hiring of former 
Senator Warren Rudman to review the company's policies and procedures 
regarding ethics and the handling of competitive information was a good 
first step. It saddens me to think that a handful of individuals could 
have caused such problems for the 160,000 hard-working men and women 
employed by the Boeing Company.
  We should keep in mind that the Department of Justice is continuing 
its own investigation into the criminal activities of these former 
employees. I will also be requesting through the Senate Armed Services 
Committee that the General Accounting Office investigate whether 
defense consolidation has resulted in a situation where the Federal 
Government's ability to punish those companies that violate the 
procurement process has been limited.
  To be clear, I continue to support the Air Force's policy of 
sustaining two launch providers for the EELV program. Last February, I 
sent a letter to the Secretary of Defense emphasizing my belief that 
reliance on only one provider could jeopardize our ability to utilize 
space. Assured access to space requires sufficient launch capability, 
which would be lost with the elimination of one launch service 
providers. And, while redundancy is expensive, I believe we need to 
ensure space assets are there for our men and women in the Armed Forces 
when they are needed.

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