DT friend Bob Cox of the Fort Worth Star-Telegram’s new Sky Talk blog sent this little item in to us today.
All we can say is “ugh”…
Lockheed Martin Aeronautics Co. says it discovered that it has overcharged the U.S. government by $265 million for work on the F-35 Joint Strike Fighter program and will promptly refund the money with interest.
In a statement released this morning the Fort Worth-based company said it had recently discovered “an inadvertent billing error.” Actually, it appears to be the same error over and over. The company had erroneously billed the government in each of the 11 billing periods since the F-35 program launched in late 2001.
Lockheed said the error came in the way it processed invoices from the two major subcontractors, Northrop Grumman and BAE Systems, but that the error was not the fault of those two companies.
Lockheed said it is in discussions with the U.S. government to determine the appropriate amount of interest that should be paid and will repay the entire amount within a few days. The company said the matter should not have a material impact on Lockheed Martin Corp. financial condition or its performance.
{ 23 comments… read them below or add one }
Lockheed’s Stock before (UP and UP)
After (UP)
If true, this is remarkably honest behavior for a corporation. Perhaps the Defense Industry is getting the idea that endless overcharges are ultimately destructive to their own company as well as their country. Or…..maybe not.
Why do we continue to have these kind of “goof up’s
in the USA government/contrack’s. I guess they are to busy trying to locate the weapon’s in Irack.
Maybe this will start a new trend in both the way the DoD monitors its procurement contracts AND maybe more manufacturer’s will own up to corporate billing errors and overcharges. Breath not held.
STILL, its refreshing to see some HONESTY left in the Military
Industrial Complex as Eisenhower called it.
Maybe this will start a new trend in both the way the DoD monitors its procurement contracts AND maybe more manufacturer’s will own up to corporate billing errors and overcharges. Breath not held.
STILL, its refreshing to see some HONESTY left in the Military
Industrial Complex as Eisenhower called it.
Clearly, there is a downside to the military distaste for listening to accountants. Aren’t there supposed to be government employees in charge of contract oversight? Must we really rely of defense contractors themselves to fess up to massive overpayments just when the feel like it and it won’t hurt their bottom line (although the last claim sounds suspiciously like that of a company that is just paid hundreds of millions of dollars to settle a lawsuit but loudly proclaims that it is not admitted to any wrongdoing).
I just HAD to come here after hearing this news at work today to see how this news was covered and comment upon. I am encouraged by the sensible, and quizzical, comments from early posters and unsurprised by the indignant
Well put, Sarge. Assuming that something’s broken here, what is it, and how would you fix it?
Fortuately, I am not a bean counter on the program. I say that today with double sincerity for twice as many reasons.
I will wait and see what comes out of this,
Just the tip of the iceberg. If the auditors for the government were to really look deep they may find that there are alot more pieces to the on-going problem….Its politics at its best. 265 million mistake is pocket change to the wider scope.
It’s a project, regardless of “billing” certain payments/profits are still projected. The gov’t making payments didn’t alarm anyone until some other invoices that were late came in. An average low level A/R wouldn’t pick this up, but the project leader responsible for the P/L would.
Them willing to pay with interest tells me they “reserved” their profits, instead of spending it like a drunken sailor. Hey, it could be worse, they could have played the “wait and see” game. This puts hope in the industiral military complex, IMHO.
I’m glad Hillary Clinton did not submit her billing records to DOD for payment…
If the company was Boeing instead of Lockheed there would be a congressional investigation and they’d be calling for the CEO’s resignation and probably jail time for those directly at fault. I haven’t heard of any of this in the news. It sounds like someone from Lockheed is in bed with someone from Congress or the Senate.
This reminds me of the early years of South-African democracy, where former ANC cadre’s were hired as ‘consultants’ by government officials and then accidentally added a extra zero on their consultancy fee when billing time came. I’m not kidding, one of them once used that excuse during a health dept. mismanagement scandal.
I hope this was under AFOSI investigation and that they were fined and warned. A mistake? It is a shame that fraud is so rampant, especially in larger contracts.
Government contracts continue to be unsatisfactorily monitored and scrutinized. Fraud investigations, allegations and corruption have been rampant since the beginning of time. It is time to clean this up, and prosecute and severly fine corporations for their “mistakes”. I am tired of hearing “oops” we made a mistake. If it hadn’t been noticed by someone else or they thought it might be investigated, I doubt we would have ever heard of it.
and also…no wonder they offered to pay it back with interest…if found guilty in court, they could be fined up to 3x the discrepancy. I know the interest is less than that, hence why they make it look like that are doing the right thing.
For years Boeing has done its best to be ethical and has quickly disclosed when mistakes were made. However, while they were open and honnest about such mistakes, they were getting skewered by the public and media while other companies continued to act unethically and hide it. It is good to see that Lockheed is trying to turn the corner. Instead of focusing on these companies that have proven they are policing themselves, more atttention needs to be paid to other companies such as foriegn owned companies that are buying up greater and greater percentages of our military industrial capability and companies that currently hold military contracts.
this is one in a hundred that we don’t know about
where contractors are F**King the tax payers
and poor over site because it don’t come out of there pockets! we need change in goverment period
point blank!
Been there, seen this. Problem is in the officers that are the TRCOs (Technical Representative of the Contracting Officer). The need to be held accountable and informed that if they oversee a contract they can NEVER work for that company. I saw the smae kind of thing when I was working onthe GPS system. We got a software release that created 50% more defects than it cleared and the TRCO told me “The way the contract is written, we have to take whatever they (IBM)sends us”. Two weeks later he seperated (on a Friday) and went to work(on Monday)…Where? Take a Big Guess!
Y’all always talking about tax payers money. Why don’t tax payers advice government to use funds for human development instead of human destruction? Why must they invest huge sums of money on weapons instead of making peace initiatives. What all Americans think about is WAR WAR, whereas, people elsewhere are dying of starvation. USE YOUR WISDOM NOW COS EVEN THE GREATEST COUNTRY IN THE WORLD WILL FALL ONE DAY. God is watching how you guys are utilizing the prosperity He has given you.
This plane was essentially designed to keep military corporate conglomerates like Lockheed in business, but not a plane the military really has a need for. It is on par in performance with the F-18, not as stealthy as the F-22, and is more damaging on runways than any other plane. It eats fuel like a hog and cannot manage to meet the military specs on combat range without refueling immediately after take off. The “B” version has a forward fan that is too intricate and complex, making it prone to mechanical failure at the critical moments on takeoffs and landings. It is an aircraft is being sold on the context of versatility, yet doesn’t do anything any better than the planes it is meant to replace. On top of that, the costs of production has now climbed on the F-35 to where it as every bit as expensive as the far superior F-22 to make. The military ought to wise up and dump this piece of junk, and stop letting the corporate world dictating to the Pentagon what the military needs.
The ultimate guarantee to any peace initiative is a powerful military that stands at the ready to engage any threat of peace and vehemently destroy it.
“. . .whereas people elsewhere are dying of starvations. . .”
This is because those people lack to fortitude to revolt against their oppressors and the US has yet to save their ass.