(Updated) A Pentagon Sized Billing Error
10:32 AM, Aug 10, 2007 • By MICHAEL GOLDFARB
The Sky Talk blog reported yesterday that Lockheed Martin had worked out a deal to repay the Pentagon $265 million, plus interest, for a "billing error" that had resulted in the company overcharging the government. The error was not a one off, but rather Lockheed had been overcharging the government in each of eleven separate billing periods over nearly six years. That's an extra $24 million and change on each bill--roughly half the estimated cost of an F-35 Lightning II Joint Strike Fighter.
The WWS emailed John Smith, the communications director for the F-35 program, for information on how such an error could have occurred. His response:
Smith also passed along an FAQ on the matter, much of which dealt with the potential impact on the company's bottom line. The document says that Lockheed is currently working to determine the appropriate amount of interest, that the company has "initiated a thorough review to determine why the error was not detected sooner," and that "the government will be reimbursed within the next several days."
Here's the key question though:
And isn't that the most disturbing part--at the end of the day, it was Lockheed employees who discovered the error. Wouldn't you like to see the FAQ from the Pentagon:
HT Defense Tech
Update: Click here to see the DEW Line's top 10 guesses for where all the money went...