Pentagon announces public meeting on progress payment rates

By Marjorie Censer / September 21, 2018 at 9:21 AM

Following an industry outcry over a proposed change to progress and performance-based payment rates, the Defense Department said today it will host a public meeting Oct. 10 "to obtain views of experts and interested parties in Government and the private sector."

The Pentagon held a public meeting on the issue late last week. Industry associations argued the change would stifle innovation and create unnecessary bureaucracy.

Some analysts say they think the rule change is unlikely to go forward as planned.

In a note to investors today, Roman Schweizer of Cowen said he thinks "DOD's proposed rule change on progress/performance-based payments will be difficult to implement by Jan. 1, 2019 and won't be adopted as currently written."

"Even if implemented, it won't impact 2019 and likely only will have a modest effect in 2020," he continued. "Investor reaction looks overblown."

The proposed rule is open to public comments, which are due Oct. 23.