Northrop Grumman pays $27.45 million to end False Claims case alleging inflating hours and invoices on battlefield communications contracts

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.

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.

The civil settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Southern District of California, the Defense Contract Audit Agency, the Air Force Office of Special Investigations, the Defense Criminal Investigative Service, and the Air Force Materiel Command Law Office Fraud Division.

Except for the conduct admitted in connection with the criminal agreement, the claims resolved by the civil agreement are allegations only, and there has been no determination of civil liability