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PENTAGON TO INVESTIGATE EIGHT MORE CONTRACTS

PENTAGON TO INVESTIGATE EIGHT MORE U.S. AIR FORCE CONTRACTS

14 Feb 05. Reuters REPORTS that the Pentagon on Monday said its internal watchdog would investigate eight more contracts handled by Darleen Druyun, a former Air Force official convicted last year of violating conflict-of-interest rules.

Acting Pentagon acquisitions chief Michael Wynne said the eight potentially tainted contracts, worth a total of $3 billion, were identified during a detailed review of 407 contracts. Pentagon Inspector General Joseph Schmitz is already investigating seven other deals handled by Druyun.

Druyun, the No. 2 acquisitions official at the Air Force from 1993 through her retirement in November 2002, is serving a nine-month prison sentence for illegally negotiating a $250,000 job with Boeing Co. while overseeing its contracts.

Her admission that she favored Boeing as far back as 2000 sparked the Pentagon review and prompted Congress to kill a $23.5bn Air Force deal to lease and buy 100 Boeing 767s. The eight further contracts now being scrutinized include four with Boeing, including a $1.5 billion deal won by Boeing and Pemco in 2000 to 2001 to maintain KC-135 refueling tankers. Also listed were two deals with Lockheed Martin Corp. worth $600m; an $82.5m deal with Anderson Consulting and a $158m deal with Systems & Electronics.

Wynne said the Defense Contracts Management Agency looked for deals that Druyun “sped up, interrupted or unduly influenced.” He said it was “truly painful” to find cases that could have involved abuses. He said he felt responsible for making sure the Pentagon’s acquisition practices were improved.

A separate review of acquisition practices by the Defense Science Board will be done by March, but its preliminary recommendations include the need for better oversight of procurement and better leadership on ethics issues.

“I have a feeling that this was much more of an environmental issue that we need to resurrect and correct,” Wynne said. Asked if he would resign, he said, “I do feel responsible and accountable for making sure the environment is put right. As to what my plans are for the future, … that is for somebody else to tell me.”

Defense officials have said they expect Ken Krieg, in charge of Pentagon analysis, to replace Wynne. Senate Armed Services Committee Chairman John Warner, a Virginia Republican, vowed to continue investigating what he called “this atrocious mismanagement and waste top to bottom.” He said Congress was still waiting for an accountability assessment from Schmitz requested over a year ago.

“This review is absolutely essential if we are finally to determine the accountability of senior civilian managers … for this enormous waste of taxpayer funds, and to prevent a recurrence,” Warner said. Boeing would continue to cooperate with the investigations. “If any problems are found, we have the will and the processes to fix them,” said spokeswoman Deborah Bosick.

Lockheed Martin spokesman Tom Jurkowsky said his company would also support the investigations. He said there were no indications that Lockheed Martin “did anything inappropriate” in competing for the two contracts under scrutiny.

A spokeswoman for the inspector general’s office gave no timetable for completion of the new investigations. Wynne said he would urge affected companies to file protests with the General Accounting Office if any problems were identified.

He said the review found no evidence of foul play by other acquisitions officials, nor did it turn up any anomalies involving former Boeing finance chief Michael Sears, who hired Druyun and will be sentenced in federal court on Friday.

Wynne said the Air Force found no problems with two classified programs protested by Lockheed and would allow those deals to stand. The GAO will also rule this week on protests against two separate contracts awarded to Boeing, he said.

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