Pentagon negotiators have in recent months become more unpredictable and willing to ignore precedent, Lockheed Martin’s CFO said last week. The seemingly new approach has slowed down talks on the latest batch of F-35 fighter jets and even on other weapons and gear that the U.S. Defense Department has been buying for decades, Bruce Tanner said.
“It’s not like negotiations were always easy, but I’ll say they were more predictable than they are today,” Tanner said in an interview Monday. “There’s just more things that are being changed or things that you thought were sort of foundational elements of negotiation that maybe weren’t up for negotiation that now seem to be up for negotiation.”
For example, he said, the government now wants companies to eat various costs they once would have been reimbursed for.
“Everyone should be interested in cost reduction, not simply not reimbursing elements of cost that you historically reimbursed,” Tanner said. “That’s a strange way to get cost reduction and, I would argue, a very short-sighted, not helpful, not healthy for the industry and ultimately not healthy for the folks in the Pentagon buying under that strategy to use that approach.”
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