Lockheed repaying $265M for JSF billing error - Navy News | News from Afghanistan & Iraq - Navy Times

Lockheed repaying $265M for JSF billing error

Lockheed Martin will have to return $265 million to the Pentagon because of a billing error buried somewhere in the Joint Strike Fighter program’s paperwork.

According to Lockheed officials who discovered the error, the U.S. Defense Department has been overpaying award fees on the $300 billion fighter jet program since 2002. The fees ultimately went through Lockheed to subcontractors Northrop Grumman and BAE Systems.

The error was not caused by the subcontractors, Lockheed said in a statement, and will not affect those companies.

“This was an error in the way we coded some costs in our billing system,” the statement said. “Lockheed Martin employees discovered the error and corrected the problem. We are working with our customer to ensure that enhanced controls will be put in place to prevent this from occurring in the future and will meet with their satisfaction.”

The problem persisted over 11 award-fee periods before it was detected.

“We are dong some significant evaluation to figure out how that went on for so long,” said John Smith, Lockheed’s F-35 program spokesman.

The company is working with the government to determine the best way to refund the money, as well as accumulated interest, Smith said.

There will be no effect on program schedule or budget, and no impact on any of the eight other nations who are partners on the program, according to the Lockheed statement.