Northrop Grumman pays $27.45 to settle cost mischarging case

by Ben Vernia | November 2nd, 2018

On November 2, the Department of Justice announced that Northrop Grumman Systems Corp. has agreed to pay a total of $27.45 to settle civil allegations that the company overcharged the Air Force on communications contracts. The company will also pay a  forfeiture of $4.2 million to settle criminal allegations. According to DOJ’s press release:

The Justice Department announced today that Northrop Grumman Systems Corporation (NGSC) has agreed to settle civil allegations that it violated the False Claims Act (FCA), 31 U.S.C. §3729, by overstating the number of hours its employees worked on two battlefield communications contracts with the United States Air Force.  Under the settlement, NGSC, headquartered in Falls Church, Virginia, will make a payment of $25.8 million, which, combined with earlier repayments, will result in a civil recovery of approximately $27.45 million.

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The Air Force entered into two contracts with NGSC for battlefield communications services: the Battlefield Airborne Communications Node contract and the Dynamic Re-tasking Capability contract.  Today’s settlement resolves allegations that NGSC billed the Air Force for labor hours purportedly incurred between July 1, 2010, and December 31, 2013, by individuals stationed in the Middle East who had not actually worked the hours claimed.  NGSC also entered into a separate agreement with the Criminal Division of the U.S. Attorney’s Office for the Southern District of California related to these contracts under which it has agreed to forfeit an additional $4.2 million.

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The case apparently arose from an Air Force investigation, and not from a whistleblower’s suit.

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