On December 9, 2013, Northrop Grumman paid $11.4 million to settle a government claim against them for penalties instituted under the Federal Acquisition Regulation (FAR) and False Claims Act.
GOOD Northrop Grumman was accused of charging certain costs to its federal contracts for deferred compensation awards to key employees, even though it had promised not do such things, as part of an earlier settlement from 2002 with the Defense Contract Management Agency.
The government’s contracting officer concluded that Northrop had failed to honor this commitment and should be …show more content…
Northrop was then made to pay an additional $1.9 million in unallowable costs for thousands of invoices and vouchers.
This wasn’t the first incident of criminal charges against Northrop Grumman though. In June 17, 2010, Northrop Grumman paid the United States $12.5 million to settle allegations of knowingly submitting false claims to various government agencies in connection with electronic parts they purchased to manufacture navigation systems for military helicopters, airplanes, submarines, and some space equipment.
The whistleblower lawsuit claimed that Northrop’s Navigation System’s Division failed to test certain commercial grade electronic components it had purchased for use in its navigation systems. These tests would’ve assured the components could function in extreme temperature environments. This oversight wound up affecting various sectors of the U.S military, the coast guard, and