Boeing won't protest bomb award

Boeing Co. chose not to protest Raytheon Co.'s victory on a $450.8 million U.S. contract to develop smart bombs, a program tied to a procurement scandal for which an Air Force official served nine months in prison.

That decision, disclosed today in a statement by Boeing Weapons Vice President Debra Rub, confirms that Raytheon will develop an upgraded model of the "small-diameter bomb" that Chicago-based Boeing was originally in line to receive as part of a 2003 contract.

"Boeing has decided not to file a protest" after being briefed by Air Force officials on the Aug. 9 award of the contract to Raytheon, Rub said. "We appreciate the Air Force's professionalism."

Following Boeing's initial win on the initial contract over Lockheed Martin Corp., the Air Force reopened the competition after the U.S. Government Accountability Office determined in February 2005 that the decision involved a conflict of interest.

Lockheed protested the awarding of four contracts, including the bomb program, after Darleen Druyun, then the Air Force's No. 2 civilian weapons-buyer, acknowledged to federal prosecutors she improperly favored Boeing for another project. Lockheed later joined Boeing to compete against Raytheon.

An Air Force spokesman, Lieutenant Colonel Jack Miller, said the service reached the decision in favor of Waltham, Massachusetts-based Raytheon after a team of specialists verified that the contract complied with federal regulations.

Boeing rose 66 cents, or 1 percent, to $65.36 at 2:31 p.m. in New York Stock Exchange composite trading, while Raytheon gained 39 cents to $44.98.

Druyun served nine months at a medium-security prison in Marianna, Florida, after a conviction for violating federal conflict-of-interest laws by discussing a job at Boeing while negotiating with the company on behalf of the Air Force. She was also fined $5,000 and ordered to serve three years of community service. She was released in September 2005.