The report said on Tuesday that the heads of Northrop Grumman, L3Harris Technologies and Boeing have skipped out on several defense contracts to avoid losses due to cost overruns.
Northrop Grumman will not bid on a contract to make the next fighter jet to replace the F-22, and L3Harris dropped out of competing for a contract to make the new Navy missile, among others, the report said.
Northrop Grumman previously said it will lose money making the first batch of the new B-21 Raider bombers, which were valued at about $700 million each under a fixed-priced contract with the Pentagon. Under a fixed-price contract, defense companies have to pay for any cost overuns.
According to the report, Gen. James Rainey, who leads the US Army's modernization programs, has claimed that the Pentagon is working on making contracts more flexible to allow for unexpected economic conditions.