Lockheed airs gripes with Pentagon contract demands

October 27, 2011 08:23

WASHINGTON/ATLANTA - After months of grumbling behind the scenes, US arms makers are now publicly criticizing Pentagon plans to change the way it buys weapons and make industry shoulder more of the risks of development.

No. 1 US defense contractor Lockheed Martin Corp used its quarterly earnings report to flag concerns about what it called an "unprecedented" move by the Defense Department's push to make the company pay for design changes in the F-35 fighter jet that come up during developmental testing, which is continuing even as the plane has already entered production.

Lockheed said the company needed funding to cover costs associated with the next production lot of F-35 planes, but Pentagon officials said such funding would be contingent on the company agreeing to be responsible for certain costs of changes arising from testing, under a "concurrency clause."

Chief Executive Robert Stevens told reporters after the earnings release on Wednesday that Lockheed would be reluctant to accept "unbounded liabilities for unpredictable or unknown events."

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