U.S. Pact Lifting Ban on Boeing Sets Stringent Oversight Terms

The Wall Street Journal 03/07/05
author: Andy Pasztor
(Copyright (c) 2005, Dow Jones & Company, Inc.)

The U.S. Air Force's decision allowing Boeing Co. to compete again for government-rocket contracts requires the most stringent government oversight of corporate-ethics programs ever imposed on a defense contractor.

On Friday, the Air Force lifted a 2003 ban prohibiting Boeing from bidding on new satellite-launch contracts, saying the company had corrected problems that led to its illegally acquiring and using proprietary information from rival Lockheed Martin Corp. in the late 1990s.

The terms of the reinstatement set a high-water mark for outside supervision of internal corporate processes, formerly sacrosanct internal legal reviews and executive-suite deliberations about ethical matters. Indeed, under the agreement Boeing is now obligated to provide assurances of compliance with ethics rules every time it bids on a government contract valued at more than $500 million -- regardless of whether it's for the military or civilian agencies.

Among other conditions, Boeing has agreed to provide monthly reports to the Air Force detailing the status of sensitive, in-house Boeing investigations and provide information about suspected misconduct anywhere throughout its army of subcontractors.