Report: Lockheed Asks DoD to Reimburse $212M in Restructuring Costs for Sikorsky Purchase

Lockheed Martin (NYSE: LMT) has asked the Defense Department to reimburse $212 million in restructuring costs associated with its $9 billion purchase of Sikorsky Aircraft in 2015 on the grounds that the Bethesda, Maryland-based defense contractor has been delivering $8 in savings for every dollar spent through the acquisition, Bloomberg reported Wednesday.

“While we can’t get into specifics of individual actions, the savings include efforts such as combining our information technology infrastructure and consolidating our human resources and contracting policies and processes,” William Phelps, a spokesman for Lockheed, said in an email.

Phelps added that Lockheed continues talks with the government over the restructuring cost claim that would potentially apply to contracts held by the company’s rotary and missions systems business in the next five years.

Pentagon agencies that include the Defense Contract Management Agency have begun to audit Lockheed’s request.

DoD’s acquisition rules authorize the reimbursement of allowable restructuring costs that include early retirement incentives and severance pay for employees if projected savings are more than $2 on every dollar spent, the report added.

 

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