US Air Force, Boeing close to signing rocket deal

WASHINGTON, Sep 19 (Reuters) US Air Force and Boeing Co. lawyers are making a ''final review'' of a long-awaited two-year contract for rocket launch support services that will pave the way for billions of dollars of launch contracts over the next decade, the Air Force said.

No exact date for the next contract award under the Evolved Expendable Launch Vehicle program has been set, but news of the final legal review indicated that it could come soon, one defense official told Reuters yesterday.

The contract for support services is separate from a plan by Boeing and Lockheed Martin Corp. to merge their rocket launch units.

That plan got a boost last week, when a source familiar with the case said the Federal Trade Commission was expected to vote to approve the merger within the next two to three weeks.

One defense official, who asked not to be named, said the FTC approval vote was expected by the end of September.

A spokeswoman for the Air Force's Space and Missiles Systems Center said Boeing had asked for some ''advanced agreements'' with the Defense Contracts Management Agency, which were now being assessed by another Pentagon agency, the Defense Contracts Audit Agency. She gave no further details.

The Air Force concluded a similar deal for launch support services with Lockheed Martin in March. But its contract with Boeing has taken much longer due to a Pentagon audit of the company's accounting for labor costs.

The Air Force has said only that Lockheed's support contract would exceed 50 million dollar, but it plans to release details of both contracts once the Boeing deal is finalized.

It will also finalize actual launch contracts with both companies that analysts say are valued at over 3 billion dollar.

Congress has approved about 0 million for infrastructure support under the EELV program in fiscal 2006, which ends Sept.

30, and the Pentagon is seeking 0 million for fiscal 2007.

Boeing and Lockheed have urged the FTC to approve their plan to create the United Launch Alliance, saying it would save taxpayers up to 150 million dollar annually by eliminating redundant overhead for launches of U.S. military, intelligence and other government satellites.

Pentagon officials told skeptical federal antitrust authorities that there is not enough launch business to support two suppliers.

REUTERS PDS BST0543