Summary
Boeing Company (BA) disclosed in an 8-K filing on July 28, 2003, significant negative developments concerning its space launch services business. The U.S. Air Force announced it would suspend certain company business units and three former employees from receiving government contracts due to alleged wrongdoing in the 1998 Evolved Expendable Launch Vehicle (EELV) source selection. This action stems from a U.S. government review of the matter, which is also under investigation by the U.S. Attorney in Los Angeles and is the subject of a civil lawsuit by Lockheed Martin Corporation. The Air Force's decision has direct implications for Boeing's space launch operations. Specifically, the Air Force intends to terminate seven previously awarded launches and disqualify Boeing from competing for three additional launches in a follow-on procurement. Boeing is currently assessing the full financial and operational impact of these actions, which represent a material setback for a key business segment.
Key Highlights
- 1U.S. Air Force to suspend certain Boeing business units and former employees from government contracts.
- 2Suspension is a direct result of alleged wrongdoing in the 1998 Evolved Expendable Launch Vehicle (EELV) source selection.
- 3The Air Force intends to terminate seven previously awarded launch contracts.
- 4Boeing will be disqualified from competing for three additional launches in a follow-on procurement.
- 5The matter is under investigation by the U.S. Attorney in Los Angeles.
- 6Lockheed Martin Corporation has filed a civil lawsuit related to the same incident.
- 7Boeing is currently assessing the impact of these actions.