Lockheed Payments Held by U.S. Increase to $195 Million
The U.S. Defense Department has withheld $195 million in payments from Lockheed Martin Corp. (LMT) because of flaws in the company’s system of tracking costs and schedules for F-35 jet contracts.
The amount held back through August is equal to as much as 5 percent of periodic billings by the Bethesda, Maryland-based company. It has swelled from $47 million in 2012, when the Pentagon started holding back the funds.
The Defense Contract Management Agency first raised concerns in 2007 about internal company data generated for Lockheed’s fighter programs -- the F-35, F-22 and F-16 jets. The agency decertified the Pentagon-mandated Earned Value Management System for the contractor’s aircraft operations in October 2010.
Payments will continue to be withheld until the agency determines that Lockheed’s Fort Worth, Texas-based aeronautics unit demonstrates that its corrective action plan approved in March works, according to the agency.
The agency has scheduled a review that will take place by Dec. 30, Jacqueline Noble, a spokeswoman for the Defense Contract Management Agency, said in an e-mailed statement.
Lockheed Martin spokeswoman Laura Siebert didn’t have an immediate comment on the increase in withholding or the company’s progress in correcting deficiencies with the system.
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