False Claim Allegations against Northrop Grumman Systems Corporation to Cost $27.45 Million

The US Justice Department (DOJ) announced on November 2, 2018 that a settlement had been reached with Northrop Grumman Systems Corporation (NGSC). The terms of the settlement are that NGSC will pay $25.8 million to settle charges that it violated the False Claims Act by submitting bills it knew were false. When the settlement sum is added to earlier repayments, the total amount Northrup is paying to settle the overbilling charges is $27.45 million

The allegation against Northrup was that it “overstated the number of hours its employees worked on two battlefield communications contracts with the United States Air Force.” The DOJ claimed that contractors who knowingly inflate their bills should understand that such conduct will be met with severe consequences. The Armed Forces protect the citizens of the United States. Companies that try to profit illegally from the trust placed in them when they deal with the government should know that will have to pay back any ill-gotten gains. Working with the U.S. Treasury, according the U.S. Attorney Adam Braverman is not a license to steal.

The reason for the False Claims Act allegations

The Air Force and Northrup entered into two contracts for battlefield communications services. The two contracts were for

  • The Battlefield Airborne Communications Node contract
  • The Dynamic Re-tasking Capability contract

The work on these contracts was supposedly performed between July 2010 and December 31, 2013 by people stationed in the Middle East. The DOJ with the help of the Air Force’s OSI Office of Procurement Fraud determined that the work hours claimed were far from accurate.

The civil settlement involved the following agencies who helped prove the fraud and prosecute the claim:

  • Civil Division’s Commercial Litigation Branch
  • S. Attorney’s Office for the Southern District of California
  • Defense Contract Audit Agency, the Air Force Office of Special Investigations
  • Defense Criminal Investigative Service (DCIS)
  • Air Force Materiel Command Law Office Fraud Division

Northrup Grumman Systems Corporation also agreed to forfeit an added sum of $4.2 million based on a separate agreement “with the Criminal Division of the U.S. Attorney’s Office for the Southern District of California.”

The Air Force’s OSI Office of Procurement Fraud worked with DCIS and another agency, the FBI, to “’meticulously unravel this international conspiracy to defraud the U.S. Air Force,’ said Jason T. Hein, Special Agent in Charge of the Air Force OSI Office of Procurement Fraud, Detachment 6.”

The False Claim Act is a federal law that authorizes the government to prosecute actions against companies and individuals that that try to defraud or cheat the government. It also provides that when whistleblowers properly disclose the fraud, that the whistleblower is entitled to a percentage of any recovery.

For help with any whistleblower claim, including violations of the False Claims Act, call Stephen Danz & Associates. Stephen Danz is experienced at helping whistleblowers get their just recovery and helping the Department of Justice prosecute its claim. For help now, call 877-789-9707.