Lockheed CFO hopeful for a 'happy medium' on progress payments

Lockheed Martin's chief financial officer said today he remains optimistic about reaching resolution on a controversial Pentagon proposal on progress payments issued last year, but noted "we're going to be talking about this for a while."

The Defense Department last year published a rule seeking to reduce customary progress payments for large businesses. DOD said the rule was implementing Section 831 of the Fiscal Year 2017 National Defense Authorization Act, which called for a preference for performance-based payments.

However, the defense industry argued the change would disrupt contractors' cash flow plans and force them to reduce investments in research and development, and the proposal was eventually rescinded.

Speaking at a J.P. Morgan conference today, Kenneth Possenriede said the Aerospace Industries Association as well as Lockheed Martin and its competitors have met with the Pentagon on the issue.

"I think we're going to be talking about this for a while, but we're hopeful we'll be able to get to a happy medium that's fair for the government and fair for industry," he said.