The ban was slapped on the Boeing units in July 2003 after they were discovered with propietary information belonging to Lockheed Martin that helped them win a 1998 rocket contract for Evolved Expendable Launch Vehicle.

"Today, I am announcing that we have lifted the suspension of these Boeing business units and have made them a full partner again on our national security space team," acting Air Force Secretary Peter Teets said.

Teets said the suspension could be reinstated if the company is indicted or if new information emerged as a result of ongoing Justice Department investigation.

Boeing agreed to pay the air force 1.9 million dollars to cover the cost of its reviews, and to have an outside official verify that it is complying with remedial actions pledged under an interim agrement with the air force, he said.

The three Boeing units involved were its Launch Systems, Launch Services, and Delta program, he said.

In lifting the suspension, Boeing will be able to compete against Lockheed Martin for the air force's next round of satellite launches, which Teets estimates will involve 18 to 24 launches. The air force expects to being deciding on those contracts next year, he said.

"We've had some preliminary discussions with Lockheed Martin," Teets said. "We'll broaden that involvement now and start to discuss with Boeing how would we put together the right acquisition strategy for Buy III."

When it suspended Boeing, the air force reduced the number of Boeing launched from 20 to 12 and gave those to Lockheed Martin, which also won contracts for three additional launches.

Teets estimated the lost business cost Boeing about 1.2 billion dollars.

The suspension comes just two weeks after Boeing's chief financial officer, Michael Sears, was sentenced to four months in prison for his role in hiring a top Air Force acquisition official who had favored Boeing in contract negotiations. The official, Darleen Druyun, is serving a nine month prison term.

Teets said the air force launched additional investigations as a result of the Druyun case, but found no reason "to question the ability of Boeing to be a responsible contractor today."

"Having said that and having gone through the Darleen Druyun situation, very frankly, we wanted to wait until Mike Sears was sentenced and to see whether or not there was any new, additional information that we hadn't considered before, before we lifted the suspension," Teets said.

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