By Andrea Shalal-Esa
WASHINGTON, Sept 16 The Pentagon has reduced its
withholding of progress payments on Lockheed Martin Corp's
F-35 fighter jet program to 2 percent from 5 percent
after the company made "significant progress" toward fixing a
deficient internal business system, according to a document
obtained by Reuters on Monday.
Joe DellaVedova, spokesman for the Pentagon's F-35 program
office, said the action had been taken at the end of August. He
gave no details on the exact amount of money affected by the
decision by the Defense Contracts Management Agency (DCMA).
The agency told Lockheed in a letter dated Aug. 30 that it
decided to reduce the withholding amount after seeing
"significant progress" toward improvements in the company's
earned value management system (EVMS), which helps the company
track cost, schedule and other risks to the F-35 program.
It said Lockheed had made progress on 15 of 16 capabilities
required to regain certification of the system, and the company
was expected to show continued improvement in coming months.
Lockheed spokesman Michael Rein welcomed the news and said
the company remained focused on executing the corrective action
plan and regaining full certification of its EVMS system.
News of the reduced withholding comes amid other positive
news for the $392 billion F-35 fighter program, which U.S.
defense officials say has also made progress in flight test,
technical issues and reducing production and operating costs.
The Pentagon's top acquisition official, Frank Kendall, told
Reuters this month that the program was the Defense Department's
most important conventional weapons priority and he would try to
protect its funding despite mandatory across-the-board budget
cuts due to take effect next month.
DCMA said it expected Lockheed to complete work on the one
unfinished item, which was linked to the company's analysis of
subcontractor schedule, and three other, final issues, on or
before the targeted completion date of Dec. 19.
The 2 percent withholding would be lifted once those items
had been addressed, and all significant deficiencies had been
corrected, DCMA said in the letter.
No comment was immediately available from the agency.
The DCMA, which has been critical of Lockheed's earned value
management system since 2007, increased the withholding last
year to 5 percent from 2 percent after the company failed to
make timely and significant progress on fixing the system.