The Pentagon is withholding five percent of Pratt & Whitney billings after determining the company has not been compliant with a system for monitoring the production cost and schedule of the engines for the F-35 Joint Strike Fighter and on a separate contract with the Navy.
Pratt & Whitney, a subsidiary of United Technologies (UTX), said it was informed by the Pentagon’s Defense Contract Management Agency Sept. 30 that an audit found shortcomings on four of the 32 guidelines outlined in its system known as the earned value management system, or EVMS.
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| Pratt & Whitney Billings Docked Following Audit. Photo by Lockheed Martin. |
“We have submitted corrective action plans to the DCMA and are working closely with the DCMA to address and close any deficiencies and regain approval of our EVMS,” Pratt & Whitney said in a statement.
“Pratt & Whitney is committed to having the best earned value management system possible, and to consistently and accurately track performance and execution to our contracts,” spokesman Matthew Bates said.
Five percent is the maximum the Pentagon can withhold under federal acquisition policies. The deductions will affect four low-rate initial-production contracts for F135 engines as well as a Navy contract to improve fuel efficiency.
The Pentagon F-35’s program office said it fully backs DCMA’s findings and that Air Force Lt. Gen. Chris Bogdan, the program executive officer, met with Pratt & Whitney executives on Friday to learn what was being done to fix the monitoring system.
“We will continue to work closely with DCMA to ensure Pratt & Whitney corrects the four deficiencies out of 32 guidelines in their earned value management system,” JSF spokesman Joe DellaVedova said.
The EVMS is used to prevent overbilling taxpayers by focusing on the systems defense firms use to estimate costs for bids, purchase from subcontractors, manage government property and materials and track costs and schedules, DellaVedova said.
Pratt & Whitney spokesman Bates said DCMA found faults with inadequate updating of documentation to better align with processes, with management and integration of scheduling tools, as well as with estimating and forecasting costs and work package planning.
“Although we have room for improvement, we have demonstrated our commitment to the success of the F135 engine program by taking on 100 percent of overrun risk on production engines in our last (contract) award, and did so voluntarily ahead of the government’s requirement to do so,” Bates said.
“We have also reduced costs of the F135 engine by more than 40 percent since delivery of the first production engine. We will continue to reduce costs and deliver on our commitments as the program moves forward,” he added.