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16 Mar 06. The Air Force does not expect to finalize a multimillion dollar two-year contract for rocket launch support services with Boeing Co. until mid-May, a top Air Force official told Reuters on Thursday. The Air Force concluded a similar deal with Lockheed Martin Corp. earlier this month, but it cannot wrap up the Boeing contract until Pentagon auditors finish reviewing the way Boeing accounted for labor costs on past contracts, said Col. Joe Boyle, the Air Force’s chief launch engineer. Boyle declined to discuss a proposed merger of Boeing and Lockheed’s rocket launch units, but said the support contracts — and subsequent contracts for the actual rocket launches — could proceed, even if the merger was ultimately not approved. Lockheed and Boeing are still awaiting approval of their United Launch Alliance venture 10 months after it was first announced. Under a clause in the merger contract, either company could terminate the agreement if the deal is not finalized by March 31. Boyle said the Defense Contract Audit Agency had hoped to complete its audit of past Boeing contracts by the end of March, but now expected its work to take several weeks longer. Once the audit is complete, the Air Force will be able to finalize the terms of its contract with Boeing, he said, noting that legal work could take an additional month. Congress has approved about $530m for infrastructure support under the Air Force’s Evolved Expendable Launch Vehicle program in fiscal 2006, which ends September 30, and the Pentagon is seeking $550 million for fiscal 2007.

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