The Pentagon will slow contractor payments.

Defense Secretary Caspar W. Weinberger, citing the economic recovery of the past four years, said he was scaling back the level of monthly “progress payments” to defense contractors to pre-1981 levels. The change will save $2 billion this year and $230 million in annual interest savings thereafter, he said. Contractors will see a larger portion of their bills go unpaid until they complete all work. Starting with contracts awarded after April 30, no large contractor will be entitled to receive payment for more than 80% of monthly billings, down from the current 90%. Small businesses will be entitled to payments representing 90%, down from 95%.