Watchdog clears U.S. Air Force in tanker data mix-up

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WASHINGTON | Fri Feb 18, 2011 11:14pm GMT

WASHINGTON (Reuters) - The Pentagon's internal watchdog agency said it sees no need to further investigate a data mix-up in the $35 billion U.S. aerial tanker competition between Boeing Co (BA.N) and Europe's EADS (EAD.PA).

The decision could pave the way for a tanker contract award by the U.S. Air Force in the next two to three weeks, but possibly as early as February 25.

Inspector General Gordon Heddell said a review by his office showed the Air Force fully complied with federal law after it learned of the data release, and that evidence confirmed the Air Force's determination that the data release was inadvertent and not a violation of federal law.

In a February 17 letter to seven U.S. senators, Heddell said that Boeing or EADS could take their concerns to the Government Accountability Office, the contracting officer, or federal court if they believed there was impropriety or that they were adversely affected by the events.

The letter was released by Senator Patty Murray on Friday.

Murray and Senator Maria Cantwell, Washington state Democrats, and five other senators backing Boeing's tanker bid, had asked the Pentagon inspector general to investigate if a clerical error would mar the politically charged competition.

Air Force officials insist a mix-up last November that gave the companies internal data on each other's tanker bid was unintentional and involved no pricing data that could have comprised the procurement.

The competition has fanned transatlantic tensions and jockeying among U.S. lawmakers eager to bring jobs to their states. Boeing and EADS submitted final bids last week.

Pentagon Comptroller Robert Hale said this week that the Air Force was requesting nearly $900 million for the program in fiscal 2012, and expected to award a contract in a month or so.

Heddell said in the letter that the Air Force's contracting officer had asked that a senior official outside the Air Force investigate the incident when it occurred.

The contracting officer concluded there was no impact on the procurement or violation of the Procurement Integrity Act because a violation required intent, which he said was not the case. A more senior Air Force contracting official concurred and authorized the procurement to proceed, Heddell said.

(Reporting by Andrea Shalal-Esa; Editing by Tim Dobbyn)

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