Northrop Grumman agrees to $11.4 million government settlement over disputed charges

December 9, 2013

The Justice Department said Monday that Falls Church-based Northrop Grumman has paid the government $11.4 million to settle allegations that the contractor improperly charged to its federal contracts certain costs for employees’ deferred compensation awards.

In a 2002 settlement with the Defense Contract Management Agency, Northrop had promised to limit the amount of deferred compensation included in proposals for new contracts, the Justice Department said in its statement. But the government found Northrop had broken this promise and should be assessed a penalty of twice the amount of the costs it should not have claimed.

When the contractor challenged the decision in the U.S. Court of Federal Claims, the Justice Department said it filed counterclaims alleging that Northrop had passed along these improper costs in hundreds of 2004 government contracts.

The government claimed it was charged more than $1.9 million in improper costs.

The settlement announced Monday described the claims as allegations only and there has been no finding of liability against Northrop Grumman.

The company did not immediately respond to requests for comment.

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