WASHINGTON, DC (KNX)  -- ABC News is reporting that the U.S. Air Force's highest-ranking officer and his predecessor are are being investigated by the FBI over a $49.9 million dollar contract for the air force demonstration squadron known as the Thunderbirds.

The network says the Bureau is looking into charges that General Michael Moseley and General John Jumper favored a friend, Air Force General Hal Hornburg with a Thunderbirds contract.

The Air Force, responding to the report, said in a statement: "Unfortunately, because of the ongoing litigation and investigation it is inappropriate to address specifics concerning the issue."

Lilkewise, a spokesman for Moseley did not return calls asking for a comment but ABC News says all three of the generals are denying any wrongdoing.

The network said Hornburg, whose command included the Thunderbirds, became a partner in the company that won the contract six months after he retired from the military.

The FBI investigation was spurred by complaints from Air Force insiders and a rival company whose bid was for half the amount, the network said.

The contract was canceled earlier this year when the Air Force General Counsel questioned the "integrity of the process" and the involvement of four-star generals

The reputation of the Air Force has already been tarnished by a scandal that sent Darleen Druyun, its former second-ranking weapons buyer, to federal prison for nine months for breaking conflict-of-interest rules.