Air Force Lifts Boeing Suspension

The company's rocket units may again bid on contracts.
By Ross Snel ,

Boeing's

(BA) - Get Report

rocket business is back in the Air Force's good graces.

The Air Force has removed the suspension on three Boeing rocket units it levied in July 2003 after the company was found possessing confidential documents from rival

Lockheed Martin

(LMT) - Get Report

.

The 20-month suspension is the longest for a major defense contractor. Its reversal will allow Boeing to again bid on rocket contracts.

"We believe that Boeing has taken significant action to rectify past improprieties and to develop long-lasting integrity standards that makes them eligible to compete for government launch contracts again," said Peter B. Teets, acting secretary of the Air Force.

The Air Force has signed an interim agreement with Boeing and may reverse its decision if Boeing is indicted or convicted, or if new evidence is discovered. Boeing must also submit to outside verification of remedial measures it has taken, the Air Force said.

The announcement confirms media reports on Friday quoting unidentified sources saying the Pentagon was close to lifting the rocket-launch suspension.

It's also a landmark in Boeing's progress as it tries to put its scandal-tainted past behind it.

Other Boeing contracts are under Pentagon review because of a separate procurement scandal surrounding former Air Force acquisitions official Darleen Druyun, who has admitted to steering contracts toward Boeing while negotiating employment with the company for herself and family members.

Boeing shares finished Friday's session up 96 cents, or 1.7%, at $58.38. On Thursday, they reached levels not seen since before the Sept. 11, 2001, terrorist attacks.

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