Boeing weighs options after losing U.S. bomber protest-sources

By Andrea Shalal

By Andrea Shalal

WASHINGTON (Reuters) - Boeing Co <BA.N> is evaluating all legal options after losing a challenge to the U.S. Air Force's decision to award a new $80 billion-plus bomber contract to Northrop Grumman Corp <NOC.N>, people familiar with the company's thinking said on Tuesday.

The company is likely to decide within days or weeks at the latest on its next steps, one of those people said.

The U.S. Government Accountability Office said on Tuesday that it rejected a protest from Boeing, which had challenged the initial $21.4 billion contract awarded to Northrop on the basis that the Air Force's evaluation of the bid was flawed.

Boeing has until Feb. 22 to file what would amount to a second protest of the contract related to the failure of a senior Air Force acquisition official to report that his wife had a retirement account with Northrop, people with knowledge of the process said.

Air Force officials say Richard Lombardi, the official, has been removed from acquisition duties but say there was no conflict of interest since he was not part of the team that picked Northrop to build the new bomber.

Boeing's lawyers contacted the GAO about Lombardi's failure to disclose his wife's retirement account on Friday, a day after it was reported but stopped short of filing a protest, the sources said.

Boeing could file such a protest or ask the GAO to reconsider its overall decision, the sources familiar with the matter said. It could also file a lawsuit.

A protest could result in a stop-work order preventing Northrop from proceeding with the program.

Northrop has said it looks forward to resuming work on the new warplanes, which will replace the aging fleet of B-1 and B-52 bombers. The contract win reestablished Northrop as one of the Pentagon's big prime contractors for U.S. warplanes.

The GAO has said the details of its decision and Boeing's challenge were classified and covered by the terms of a protective order.

(Reporting by Andrea Shalal; Editing by Cynthia Osterman)