Exclusive: U.S. Defense Firms Blast Pentagon on Contract Changes

December 6, 2011

Over 100 U.S. aerospace and defense industry executives are urging Defense Secretary Leon Panetta to hold off on proposed changes to Pentagon contracts with industry, warning they would dampen competition, raise costs and lead to further layoffs at a difficult time.

In a joint letter to Panetta dated November 28, the executives cited industry-wide concern about Pentagon efforts to make contractors bear more of the risk of new weapons development, and emerging threats to withhold program funds already approved by Congress, or conditioning their release on contractor agreement to "major and controversial new policy changes."

The letter, coordinated by the Aerospace Industries Association trade group, was initiated after Lockheed Martin Corp warned shareholders it might face liability unless the Pentagon quickly freed funds for costs already incurred on the $382 billion F-35 Joint Strike Fighter program. 

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