The Department of Defense continues to issue accelerated payments meant to help defense contractors withstand the impact of the COVID-19 pandemic even after the White House declared the health crisis over, Bloomberg reported Monday.
In March 2020, DOD issued a memo that increases the progress payment rates for large businesses from 80 percent to 90 percent and from 90 percent to 95 percent for small businesses as part of efforts to ensure cash flow into the industrial base during the pandemic.
Jessica Maxwell, a spokesperson for DOD, said the Pentagon continues to monitor the progress payment policy, which she said is still in effect and is meant to bring expedited payments to hard-pressed subcontractors.
“The department will provide advanced notice to industry before implementing any changes,” Maxwell said.
According to the report, DOD has made approximately $8 billion in progress payments to contractors as of end of July.
Of that total, Maxwell said about $6.2 billion went to Lockheed Martin (NYSE: LMT), Raytheon Technologies (NYSE: RTX), Northrop Grumman (NYSE: NOC), General Dynamics (NYSE: GD) and Boeing (NYSE: BA) under the principle that they would speed up such payments to subcontractors.