U.S. Wants To Penalize Contractors For Delays In Ammunition Deliveries To Ukraine

The Pentagon will levy fines.

The US Army intends to collect fines from Northrop Grumman and Global Military Products for delays in the supply of artillery ammunition to Ukraine. This writes Bloomberg.

It is noted that this is an example of the Pentagon's efforts to make defense contractors more accountable.

The Army Contracting Command said it is acting on recommendations contained in a Pentagon inspector general's report. It proposed imposing $1.1 million in fines for delayed shipments of large-caliber shells, some of which were delivered 18 months late.

Importantly, the Army is still assessing the exact amount of the fine, and the amount of the fine for each company "is not being disclosed at this time."

"The Army is committed to holding contractors accountable by actively monitoring contract performance, documenting results, and enforcing contractual measures for noncompliance," the statement said.

The Army statement comes after Defense Secretary Pete Hegseth promised to reform the Pentagon's procurement process and penalize contractors who deliver critical supplies late.

The head of the Army's procurement office, Brent Ingram, said the "Army recognizes" the inspector general's concerns and said "corrective actions are either complete or actively underway," including attempts to recover $1.1 million. The article said:

"The contractors were awarded a five-year contract for special munitions and weapons systems with an 'indefinite-delivery, indefinite-quantity' delivery date of January 2022 under the Biden administration's Ukraine Security Assistance Initiative."

Interestingly, the Pentagon's inspector general audited seven Northrop Grumman and Global Military contracts worth $1.9 billion. According to the audit, the Army did not "effectively procure munitions" for Ukraine's needs in five of the seven contracts audited. The statement said the Army may have overpaid for ammunition, failed to ensure timely delivery by contractors and failed to hold contractors accountable for missing deadlines.

The inspector general said the Army also ordered $907 million worth of ammunition that has not yet been delivered and could have used those funds more efficiently if the order had been canceled.

When asked about the status of that ammunition order, the Army said it is a composite of five separate contracts awarded to contractors.

"Some of the ammunition has been delivered, some of the outstanding order will be canceled, and the remainder of the order will be delivered," the Army said in a statement.

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