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Virginia Politics
Posted at 11:32 AM ET, 05/09/2011

Northrop Grumman penalty for overtime computer crash coming soon

Virginia will soon announce that it is assessing fines on massive computer contractor Northrop Grumman over a summertime technology meltdown that left state agencies shuttered for several days.

Legislators attending the monthly Joint Legislative Audit and Review Commission meeting in Richmond were told by staff Monday that final negotiations between state officials and Northrop Grumman executives are underway and an announcement of the penalty could come within days.

Northrop Grumman holds a $2.4 billion contract with the state to overhaul its state computer services. The state agreed last year to extend its contract by three year but promised the defense giant would be held accountable for service lapses that have plagued state technology upgrades.

The company and the state have made clear Northrop Grumman would face a sizable penalty--likely more than $100,000--for the August outage, which forced state DMV offices to close for days.

But negotiations have dragged on over the company’s contractual obligations stemming from the incident, which was a result of both technological and human errors.

JLARC staff told lawmakers that penalties will be twofold. The company will accept a penalty based on its contract with the state and then a further penalty negotiated with staff to Gov. Bob McDonnell (R).

By  |  11:32 AM ET, 05/09/2011

 
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