The Pentagon often feuds with defense contractors about billion-dollar weapons that are over budget or underperforming. But it also holds back millions of dollars over flaws in everyday business
systems. “Contractor business systems and related internal controls” are “the first line of defense against, waste, fraud and abuse,” the Pentagon inspector general said in a June report.
United Technologies Corp. tops the most recent target list of 15 companies whose payments are being withheld for inadequate systems to manage subcontractor purchases, estimate costs or keep track
of schedules.
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As of Aug. 12, the Defense Contract Management Agency was holding back almost $180 million in billings, or as much as 5 percent, from the company’s two military units. That’s up from $130 million in May.
While the contracting agency is withholding $13,000 from General Atomics for a disapproved purchasing system, it’s also holding back $1.94 million from the contractor’s aeronautical unit for
deficiencies in an earned-value system.
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Linden P. Blue, chief executive officer of General Atomics’ aeronautical systems unit, said the company on Aug. 17 received confirmation that the defense contracting agency has accepted the company’s earned-value system.
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