Textron Inc.,
the Providence-based maker of Bell helicopters, may face a federal claim that
$100 million paid to the company for a joint venture should have
been used to reduce costs related to work for the U.S. government.
The manufacturer received a so-called initial finding letter
on April 17 from the Defense Contract Management Agency, which
monitors government contracts. The letter begins a process that may
lead to the government making a claim against Textron, the company
said in a quarterly filing. Textron plans to contest the finding.
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The company’s Bell division received the payment in question
from Italian military supplier Finmeccanica SpA’s Agusta division
in 1998 for their joint venture developing two civil aircraft. The
money was counted as income, Textron spokeswoman Susan Bishop said.
The filing says the agency told Textron the payment should
have been accounted for as a credit, to cut overhead costs such as
research and development for which the government makes partial
reimbursement on military work. Textron has “no obligation” to do
so, the report says. The company builds the V-22 Osprey military
plane and is upgrading attack helicopters for the U.S. government.
Bishop declined to provide more details on the dispute. In the
filing, Textron said Agusta had made the payment for “access to
Bell’s worldwide marketing and distribution network.” A call to
the contracting agency wasn’t returned immediately.
Shares of Textron rose 58 cents
to $31.45 at 3:55 p.m. in New York Stock Exchange composite
trading. They had fallen 37 percent in the past year.
Bloomberg News
