Bloomberg News

Boeing Sues U.S. for $260.4 Million for Launch Program

July 21, 2012

Boeing Co. (BA:US) claims in a lawsuit that it and a venture it has with Lockheed Martin Corp. (LMT:US) are owed more than $260.4 million by the U.S. for equipment and launch services used by the space program.

Boeing and the joint venture, United Launch Services LLC, allege the Air Force has failed to reimburse the companies in violation of agreements “designed to secure Boeing’s participation” in the space program, according to a complaint filed in the U.S. Court of Federal Claims.

“Through these agreements, the government ensured its continued access to space via Boeing’s Delta IV launch vehicle, an expressed national security priority for both Congress and the president,” according to the complaint filed in June.

On July 10, a judge ordered the parties into a dispute- resolution program to discuss whether the case could be resolved without additional court proceedings.

Last year, United Launch repaid the Pentagon $89.2 million and lost another $199 million in prior billings because Boeing violated federal accounting standards, according to the Defense Contract Management Agency, the military’s contract management agency. Boeing lost bids to have those decisions reversed.

In an e-mailed statement, Chicago-based Boeing, which claimed it sued to preserve its ability to recover the money, said the total amount in dispute is $385 million.

‘Allowable Costs’

“ULA and Boeing believe that the 2006 and 2008 agreements with the government are appropriate recognition of legitimate, allowable costs, and that the United Launch Alliance’s recovery of these costs is fully compliant with all cost accounting standards and government regulations,” according to the statement.

Boeing and Bethesda, Maryland-based Lockheed Martin, the largest defense contractor, established the United Launch Alliance in December 2006 to consolidate the military launch business. Boeing’s Delta IV and Lockheed Martin’s Atlas V rockets are the primary methods for launching U.S. military satellites.

The case is United Launch Services LLC v. U.S., 12-00380, U.S. Court of Federal Claims (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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Companies Mentioned

  • BA
    (Boeing Co/The)
    • $128.22 USD
    • 1.99
    • 1.55%
  • LMT
    (Lockheed Martin Corp)
    • $196.45 USD
    • 3.60
    • 1.83%
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