Pentagon Withholds 5 % From Lockheed Contracts

The Pentagon’s contracts management agency is temporarily withholding 5 per cent from an earlier 3 per cent from Lockheed Martin’s aircraft unit. According to the Defense Contract Management Agency, the money is being held because of flaws in the internal systems. According to a Pentagon rule, withholding payments due to deficiencies, such as those involving the “Earned Value Management” system used to determine whether companies are meeting cost and schedule goals. Five percent is the maximum the Pentagon can withhold. In 2010, Lockheed aircraft unit was decertified by the contract management agency because the company was found to be deficient in 19 of 32 areas. After a review, the company submitted plans to correct the deficiencies. The same review was deferred until “Lockheed Aeronautics has successfully completed all corrective actions and verified through internal testing that it has achieved its objectives to bring” its system into compliance, Thomas Bradley, vice president for finance and program management was quoted as saying. The agency’s response to Bradley was that “significant issues remain with compliance on numerous guidelines.”