Clarification: An earlier version of this story said Beau Michaud’s lawsuit against Northrop Grumman was made in connection with a Postal Service system meant to sort letters and parcels. In fact, the system is meant to sort periodicals and mail. This version has been updated.

Philadelphia-based private equity firm LLR Partners has hired away industry veterans Jason Rigoli and Michael Levenberg to expand its security, defense and government services portfolio.

The firm recently opened an office in Arlington, where Rigoli and Levenberg will be based. They join LLR from Monument Capital Group, which focuses on the security and defense sectors. Rigoli is a principal at LLR; Levenberg a senior associate.

Rigoli said last week that the local office has three employees and will be adding two more junior analysts.

LLR “had done a couple deals but didn’t have a dedicated deal team” in these sectors, Rigoli said. “They’ve made a conscious decision to invest very deeply in the space.”

Even as federal spending cuts loom, Rigoli said it’s a good time to be focused on government-targeted businesses.

“There’s certainly an investment thesis that says buy when there’s a shortage of buyers,” he said. “We’re going through a pretty ugly phase of this cycle ... but there will be an upswing.”

Think tank urges Pentagon to rethink business strategy

In a new report, the Center for Strategic and Budgetary Assessments says the Pentagon needs to put together a strategy for its industrial base — or web of suppliers — that decides what is important to protect over the long term.

The report, titled “Sustaining the U.S. Defense Industrial Base as a Strategic Asset,” comes as the Defense Department weighs how it can maintain key programs, even as federal spending shrinks.

CSBA acknowledged that the Pentagon will have to give up something.

“The Defense Department will not likely be able to sustain every desired mission area and capability—nor should it try,” the document says. “Doing so would not only be an act of self-delusion, but risk losing elements of the industrial base that are core enablers of long-term U.S. military effectiveness.”

Whistleblower lawsuit filed against Northrop

Beau Michaud, a former Northrop Grumman employee, has filed suit against the contractor in connection with a Postal Service system meant to sort periodicals and mail.

In the suit, filed under whistle-blower provisions, Michaud alleges that Falls Church-based Northrop, contracted to build 100 flat sequencing systems for $874 million, and subcontractor Motor Drives and Controls repeatedly made false certifications about the machines’ speed, reliability and accuracy.

The complaint alleges that Northrop and MDCI provided the Postal Service with a fraudulent handbook for the machines, which will impair the agency’s ability to operate and repair them. Michaud said in the complaint that he e-mailed supervisors alerting them to problems with the program, but was told to “mind [his] own business.”

Northrop declined to comment, and MDCI did not return calls for comment.

Kelley Drye & Warren adds government contracts chair

Kelley Drye & Warren said earlier this month it has hired Holly A. Roth, formerly of Manatt, Phelps & Phillips, to head its government contracts practice.

Roth specializes in litigation related to federal, state and local government procurement, the law firm said in its announcement. She has more than two decades of experience.

Lew Rose, managing partner of Kelley Drye’s District office, said in the announcement that Roth will help the firm expand its multi-disciplinary approach.