E-mail glitch hides $4B in Air Force deals

Reuters - WASHINGTON -- The U.S. Air Force said a new employee's e-mail routing error kept the Pentagon and the public in the dark about nearly $4 billion of its contracts in December.
Lost in space had been more than $1.57 billion awarded to Northrop Grumman Corp., $1.22 billion for The Boeing Co., and almost $509 million for Lockheed Martin Corp., among others.
"It's awfully embarrassing," said Air Force spokeswoman Jean Schaefer. The contracts at issue totaled $3.98 billion and covered projects ranging from remotely piloted Global Hawk aircraft to F-22A fighter jets, she said.
The Air Force employee inadvertently dropped the Defense Department from the e-mail distribution list for the contracts after moving into the new job on Dec. 1, Schaefer said. Schaefer declined to identify the person responsible.
At 5 p.m. Eastern time each business day, the Defense Department is supposed to announce contracts valued at $5 million awarded by its units, including the armed services.
Schaefer said other Air Force officials had properly notified Congress and the contract winners. The companies have been free to announce their awards after having been notified.
Representatives of Northrop Grumman, Boeing and Lockheed could not immediately say whether the glitch would cause any disclosure issues related to keeping investors informed.
At least one of the contracts at issue, a $99.7 million award handed out on Dec. 27 for work on Greece's F-16 fighter aircraft, had been reported by Lockheed Martin, said Thomas Jurkowsky, a spokesman in Bethesda, Md.
The administrative glitch was the latest to cast a shadow over the Air Force's internal processes.
Last March, the Pentagon clipped the Air Force's purchasing wings after the collapse of a $23.5 billion plan to lease and buy 100 refueling planes built by Boeing.
On Jan. 20, the Defense Department gave the Air Force back the power to run 10 of its 21 top arms-buying programs. In doing so, Kenneth Krieg, the Pentagon's chief weapons buyer, said he was confident that the necessary oversight was in place to safeguard "the integrity of the acquisition system."
In releasing the belatedly announced contracts, the Air Force may have bungled its accounting for what it called a $990 million deal awarded Dec. 9 with Northrop Grumman for work on the Global Hawk program.
A separate announcement with the same contract number listed the value of what appeared to be the same work at $5.7 million -- a discrepancy the Air Force could not immediately explain.

Additional reporting by Jeremy Pelofsky in Washington

Reprinted with permission from

This article is reprinted by permission from Reuters.com, Copyright (c) 2006 Reuters. Reuters content is the intellectual property of Reuters or its third-party content providers. Any copying, republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. For additional information on other Reuters Services, visit the Reuters public Web site.