1. NEWS

  2. DEFENSE INDUSTRY

  3. US Navy pays $600 Mln to contractors
US Navy pays $600 Mln to contractors

US Navy pays $600 Mln to contractors

The U.S. Navy paid defense contractors $600 million that it had withheld due to bad workmanship, hoping the funds would help operations for manufacturers ravaged by the economic downturn caused by coronavirus

A+A-

The step, which follows a similar action taken by the Air Force releasing billions of dollars in payments, aims to offset revenue critical Pentagon vendors have lost in their non-military businesses as the spreading coronavirus has halted business activity nationwide.

The Defense Department has also increased contract awards, as it leverages its share of the annual defense budget of more than $700 billion to help keep suppliers alive.

Geurts wrote a memo to his staff on March 24, urging them to release or raising the withholding. It was not thinking about rectifying the root causes.

The move had been criticized by government waste watchdogs.

Although the Navy has not identified any firms that have received payments, it has been said by industry sources that the main contractors have been distributing coronavirus-related funds to their suppliers and subcontractors on far shakier financial basis.

The multi-layered supply chain of the Navy consists of companies carrying out the dream of President Donald Trump for a 350 Navy ship.

Maritime Business World

Tags :
Previous and Next News

COMMENT ADD

WARNING: Do not use words containing insults, swearing and words against personal and religional beliefs. Comments containing capital letters will not be approved.