Lockheed bankrolling F-35 and C-130J suppliers pending contracts

[unhappycamper]

https://www.flightglobal.com/news/articles/lockheed-bankrolling-f-35-and-c-130j-suppliers-pend-417998/

Lockheed bankrolling F-35 and C-130J suppliers pending contracts
20 October, 2015
BY: James Drew

Lockheed Martin has run out of advanced procurement money for C-130J and F-35 aircraft being procured by the US military and is paying out of pocket to support the supplier base.

The company disclosed in its third-quarter earnings that the Pentagon owes it approximately $750 million for long-lead parts; money that has been paid out-of-pocket while contract negotiations wrap up for the upcoming C-130J Multiyear II deal, and the ninth and 10th low-rate F-35 production orders.

Lockheed expects to be reimbursed later this year after requesting payment from the Pentagon, but the issue will trigger a range of procedural notifications and contractual changes.

“In both cases we ran out of funding provided, in both cases we asked for additional funding, and in both cases we were told none would be provided until those contracts were actually negotiated,” says Lockheed chief financial officer Bruce Tanner. “We have elevated this to very senior levels at the Pentagon. We’ve been told funding will be provided on both those programmes, but it does require a lot of paperwork, notifications, contract modifications and the like to make that happen.”