April 17, 2008 / 10:10 PM / in 9 years

UPDATE 1-US Air Force disciplines 5 for Thunderbird contract

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By Andrea Shalal-Esa

WASHINGTON, April 17 (Reuters) - Air Force Secretary Michael Wynne disciplined a top Pentagon official and four others involved with a $50 million Thunderbirds air show contract after an investigation showed the deal was "tainted with improper influence," the service said on Thursday.

The Thunderbirds act as goodwill ambassadors for the Air Force, performing precise aerial maneuvers at U.S. shows.

Wynne, struggling to rebuild the Air Force's image after a major procurement scandal in 2004, took unspecified administrative action against Maj. Gen. Stephen Goldfein, vice director of the Pentagon's Joint Staff since February 2007.

An Air Force spokesman declined to say how Goldfein was disciplined, saying punishment could range from a verbal reprimand to a formal letter of admonishment. The four airmen in addition to Goldfein were at the rank of colonel or below.

Goldfein led the Air Warfare Center at Nellis Air Force Base when the Thunderbirds contract was awarded to Strategic Message Solutions, a Pennsylvania company. He declined comment.

Wynne's action came after an investigation by the Defense Department's inspector general found the contract was "tainted with improper influence, irregular contracting practices and preferential treatment for the winning company."

The report was another setback for the Air Force, which has sought to become more transparent since a huge aircraft procurement scandal several years ago. The scandal prompted the resignation of Wynne's predecessor, James Roche.

Air Force Chief of Staff Gen. Michael Moseley had also been linked to the Thunderbirds deal in news reports but an Air Force spokesman said the Pentagon investigation did not find any wrongdoing by the service's top uniformed officer.

The Air Force canceled the $50 million contract to help publicize the work of the Thunderbirds after the losing bidder, Arizona-based Standing Room Only, filed a formal protest.

Standing Room Only argued its bid cost half that of rival Strategic Message Solutions, but the latter won because of its connections to high-ranking officers. Strategic Message Solutions later filed a lawsuit demanding the contract be restored, and said it had been promised the job by senior Air Force members, including Moseley.

In a letter, Wynne and Moseley urged Air Force leaders to avoid any favoritism in contract matters. "Our efforts to restore public confidence and ensure openness and transparency in the acquisition process are undermined when individuals are given special access or treatment by senior leaders based on prior professional or personal relationships," they wrote.

The Air Force is also defending itself against a protest filed by Boeing Co (BA.N) after it lost a $35 billion contract to Northrop Grumman Corp (NOC.N) and its European subcontractor EADS EAD.PA. Boeing claims the Air Force improperly steered that contract to Northrop. (Reporting by Andrea Shalal-Esa; Editing by Peter Cooney)

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