Pentagon Probe Flags 8 Deals

A Pentagon probe of more than 400 contracts overseen by disgraced Air Force official Darleen Druyun found eight deals that were questionable, including four awarded to Boeing Co., a top Defense Department official said Monday.

The special panel that reviewed the contracts didn’t unearth any wrongdoing, though it did ask the Pentagon’s inspector general to review the eight awards, which it described as deviating from “general contracting procedures.”

“Some of these contract issues may have been OK and very innovative,” said Michael Wynne, the Pentagon’s acting acquisition chief. “Some could have been bad. We don’t know ... because they seemed to be out of the normal process.”

The panel’s findings were presented to the Senate Armed Services Committee on Monday. Wynne provided a summary to reporters.

The Pentagon review was prompted by Druyun’s admission last fall that she discussed taking a job with Boeing while she was negotiating a $23-billion deal to buy aerial refueling tankers from the company. She also admitted that she favored Boeing on several other multibillion-dollar deals because the company had given her daughter and son-in-law jobs.

Wynne ordered a detailed review of Druyun’s nine-year tenure as a key weapons buyer for the Air Force as rival defense companies filed protests over contracts that Druyun awarded to Boeing. The 35-member panel pored over 407 contracts that Druyun oversaw, handled or processed during her tenure, Wynne said.

The panel was led by the deputy director of the Defense Contracts Management Agency and Army and Navy officers, plus civilian counterparts at the Pentagon, Wynne said.

They looked for contracts that were “sped up, interrupted or unduly influenced” by Druyun, he said. The eight “questionable” contracts ranged in value from $42 million to $1.5 billion. Four were awarded to Chicago-based Boeing, two to Lockheed Martin Corp. and one each to Andersen Consulting and Systems & Electronics Inc.

The Boeing contracts included a $1.5-billion maintenance contract for KC-135 aerial refueling tankers and a $335-million deal to design a microwave sensor for a weather satellite.

Boeing and Lockheed said they would cooperate with any investigation.

Druyun retired from the Air Force in 2002 and accepted a $250,000-a-year job with Boeing after having been recruited by then-Boeing Chief Financial Officer Michael Sears. Boeing fired Druyun and Sears after the company uncovered their improper job talks. Druyun is serving a nine-month sentence. Sears, who pleaded guilty to illegally offering a job to Druyun, is scheduled to be sentenced Friday. He isn’t expected to implicate any other Boeing executives, sources said.

Boeing, the largest private employer in Southern California with 36,000 workers, could get good news later this week when the Government Accountability Office is expected to agree with the company that two military contracts being protested by competitors were awarded properly.

Analysts said the findings made public Monday might represent a boost for Boeing, which has been trying to emerge from the shadows of a series of ethics scandals. “This is as close as you’ll get to a clean bill of health,” said James McAleese, a defense contracts attorney.

Wynne said the panel found no evidence of foul play by any other Pentagon officials, nor did it turn up any anomalies involving Boeing former CFO Sears. “Beyond the hiring, we found no undue influence by Mr. Sears,” he said.

Wynne suggested the questionable contracts might have occurred because Druyun was allowed to amass significant authority with little oversight as a result of high turnover and delays in congressional confirmations. This may have led to a little-noticed effort by her to speed up the acquisition process.

During her time at the Pentagon, Druyun was temporarily elevated to acquisition chief four times.

Moreover, Druyun advocated closer collaboration with defense contractors in developing weapons systems and suggested money-saving steps such as buying off-the-shelf commercial products.

In a briefing to Air Force officials in 2001, Druyun told of her views on reforming the Pentagon’s cumbersome contract regulations. “The law is the law,” she said, “but too often we are slaves to processes and rules we all know should be rewritten or discarded.”