Pentagon Withholding From Lockheed Grows Over Management

April 22, 2013

The Pentagon’s withholding of payments from Lockheed Martin Corp. (LMT) over flaws in a business system used to track costs and schedules for its F-35 fighter has increased to $130 million.

The amount held back, equal to 5 percent of periodic billings by the Bethesda, Maryland-based company, has climbed from $47 million in October.

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.

Withholding will continue until the agency determines Lockheed’s aeronautics unit “has made significant progress to successfully completing” a corrective action plan that the agency approved on March 20, agency spokeswoman Jacqueline Noble said today in an e-mailed statement.

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