JSF: Lockheed Martin penalised for 'management problems'

The US Defense Department will penalise Lockheed Martin for management problems by curtailing payments under the latest multibillion-dollar, low-rate production contract for the F-35 Joint Strike Fighter.

The Defense Contract Management Agency today sent Lockheed a letter announcing plans to curb DOD payments by 2 percent for the $4 billion deal, which covers the F-35's fifth lot of low-rate production, Lockheed spokesman Joe Stout told InsideDefense.com.

DOD estimates the withholding will amount to approximately US$1 million per month.

"The DCMA informed us February 28 that it intends to withhold some funds against the F-35 LRIP 5 contract in accordance with the business systems clause of the contract," he said.

"This is a step that's available to the customer under the terms of the contract. The letter states that the DCMA intends to withhold at the rate of two per cent."