The Air Force has decided to withhold 30 percent of its monthly payments to the General Electric Co. factory that makes engines for the B1 bomber because of quality-control problems, Pentagon and industry officials said yesterday.
The Air Force decision, which was sent to the company yesterday but has not been announced, reflects what officials say is a tougher new attitude toward defense contractors. A second major contractor on the B1 program, the Eaton Corp., also has been cited for quality-control problems and may face a suspension of progress payments, Pentagon officials said yesterday.
Neither the Air Force nor General Electric officials would say how large the monthly progress payments are to GE's Evendale, Ohio, plant. In 1983, GE sold about $2 billion in aircraft engines from its plants in Evendale and Lynn, Mass., to the Air Force and Navy.
Progress payments allow contractors to recoup some of their costs for long-term contracts calling for large initial expenditures. Suspension of those payments is considered one of the strongest steps the military can take to show its displeasure with a contractor.
A GE spokesman said yesterday that the company has not received official notification about Air Force plans. A spokesman for Eaton's division in Deer Park, N.Y., which makes electronic components for the B1, said his company is working to rectify about 200 deficiencies found by the Air Force. None of the problems has affected the operation of Eaton-built instruments, he said.