Saying it was satisfied with efforts to overcome poor workmanship, the Defense Department yesterday announced it was resuming partial payments to the Hughes Aircraft Co. for work on four weapons systems.
In a statement issued by the Air Force, which serves as contractor for the four systems, DOD said it had approved a "corrective action plan" submitted by Hughes, the Pentagon's largest supplier of missiles, radar and a host of other high-technology equipment.
As a result, Hughes will be paid half the money that previously had been set aside for payments on the Air Force's Maverick missile, the Army's TOW antitank missile and the Navy's Phoenix missile and Angle Rate Bombing System.
The decision means that Hughes will receive $62.6 million of the $125.2 million that the Pentagon had withheld through Oct. 31 because of allegedly shoddy work at Hughes' missile systems group in Tucson, Ariz.
The Air Force, Navy and Army took the rare step of suspending payments to Hughes last August. The Pentagon said then that the missiles' workmanship had been deficient and that quality control at Hughes was lax.
The government had been paying Hughes about $38 million in monthly installments for the four weapon systems. When the payments were suspended in August, the Pentagon ordered Hughes to submit a plan for correcting the deficiencies. The company complied in September, and the Pentagon announced its approval of the plan Monday.
Full payments will not be resumed, however, "until after Hughes begins to deliver acceptable products in accordance with the contractual delivery schedule," the statement said.