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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
Ranking: 3
Northrop Grumman
Northrop Grumman Corporation is a global defense company headquartered in Los Angeles, Calif. Northrop Grumman provides technologically advanced, innovative products, services and solutions in systems integration, defense electronics, information technology, advanced aircraft, shipbuilding and space technology. With more than 125,000 employees, and operations in all 50 states and 25 countries, Northrop Grumman serves U.S. and international military, government and commercial customers.
Federal Contract $: $15020.1m
Total Number of Instances: 35
Total Misconduct dollar amount: $ 850.7m
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Instances of Misconduct
1. Bagley v. TRW Inc. (Cost Mischarges)
Northrop-Grumman paid $111.2 million to settle claims that TRW Inc, a company acquired by Northrop in December 2002, had violated the False Claims Act 31 USC §§ 3729-3733, et. seq. The government alleged that "In 1991 and 1992, TRW mischarged two costs - independent research and development (IR&D), as well as bid and proposal - associated with its attempt to enter the space launch vehicle business. According to the complaint, if TRW had correctly accounted for those costs, the federal government would not have reimbursed the company or them, because in 1991 and 1992 TRW exceeded the government's ceiling on what it would pay for IR&D and bid and proposal costs." It was also alleged that TRW "mischarged the costs of fabricating and testing a prototype satellite solar array wing as 'capital equipment' rather than as IR&D" in order to avoid the government ceiling on IR&D expenditures.... more»
2. Defective Pricing
According to a GAO report cited by Senator Harkin and Representative DeFazio, Northrop Hawthorne Division paid $1.5 million to the government to settle a matter involving “defective pricing.”... more»
3. B-2 Bomber Advance Topcoat System Fraud Investigation
Northrop Grumman agreed to pay $5.21 million to settle allegations that it misled the Air Force concerning the test results of a topcoat (paint) system for the B-2 bomber program in violation of the False Claims Act. From 1998 to 2002, Northrop developed and implemented a special new topcoat, called the Advance Topcoat System (ATS), for the Air Force’s B-2 bomber. During the development and testing of the ATS, Northrop found cohesion problems in the conductive coating of the ATS, problems which Northrop attempted to fix. However, Northrop applied the ATS to a B-2 bomber in January 2002 and allegedly failed to fully disclose the cohesion problems to the Air Force. The ATS was applied to a second B-2 bomber in June 2002. In July 2002, during a test flight of the B-2 bomber that received the ATS in January of that year, strips of the ATS peeled off the aircraft. The ATS had to be removed from both B-2 bombers, and the original B-2 paint had to be re-applied to both aircraft. Northrop cooperated with the investigation and settled the matter without an acknowledgment of wrongdoing.... more»
4. F-16 Radar Contract TINA Violation
Northrop Grumman’s Electronic Sensors Systems Division agreed to pay $5.3.million to settle alleged violations of the Truth in Negotiations Act involving two Foreign Military Sales type contracts for the APG-66 fire control radar used aboard the F-16 aircraft. (Both contracts were initially awarded to Westinghouse Electric Corp., Electronic Systems Group, which Northrop acquired in 1996.) It was alleged that during contract negotiations, Northrop made misrepresentations about its intention to make certain parts of the system “in-house.” As a result, the contract was negotiated at a substantially higher price. Northrop denied any wrongdoing.... more»
5. U.S. v. Ruks (Falsely Certifying Ship and Submarine Inspections)
Robert Raymond Ruks, who worked as an inspector for Northrup Grumman Shipbuilding, Newport News, pleaded guilty to two counts of making false statements by falsely certifying that he had inspected the hulls of Navy ships and submarines. Ruks had falsely certified that he inspected three lift pad welds on a Navy submarine and lied to the Naval Criminal Investigative Service about other ship and submarine hulls that he had failed to inspect. Subsequent re-inspection of all the welds certified by Ruks, which required almost 19,000 work hours and cost approximately $654,000, found a defective critical pipe joint weld on a submarine. At the time of his plea, Ruks was ordered to pay a $200 special assessment.... more»
6. August 2010 Virginia Government Computer Outage
Northrop Grumman, under contract with the Commonwealth of Virginia to manage the state’s information technology infrastructure, paid almost $5 million in financial compensation and operational improvements for an August 2010 computer outage that paralyzed state executive agency computers for days. Northrop Grumman will provide monthly invoice credits totaling $1.908 million, spend $2.09 million on improvements to the computer system, and will implement remedial actions valued at approximately $750,000. The company also paid $250,000 for the cost of an independent third-party audit, which blamed the outage and resulting damages on technical failure and human error on the part of Northrop. See related Northrop Grumman instance, “Virginia IT Contract Audit Report.”... more»
7. Cost Overruns
On March 13, 2002, a jury in Indianapolis, Indiana returned a verdict of in favor of Allison Gas Turbine for cost overruns on the engine exhaust liner and trailing edge of a discontinued prototype aircraft from a competitive award process, which occurred in the 1980s. On April 27, 2004, the Court of Appeals of Indiana affirmed the decision of the lower court. On September 28, 2004, Northrop Grumman’s appeal to the Supreme Court of Indiana was denied and the company paid $81 million in settlement of the judgment and interest.... more»
8. Falsification of Inspection Checklists and Installation of Nonconforming Parts
Northrop Grumman agreed to pay $500,000 to the government in a civil settlement after the company allegedly “falsely certified inspection checklists for military and civilian aircraft.” The settlement also covered charges that the company had installed nonconforming parts in military aircraft.... more»
9. Overcharging the Government
A government investigation found that “Northrop Grumman Corporation’s Military Aircraft Systems Division (NGMASD) unintentionally overbilled the Government on a Low Rate Initial Production contract for the B-2 bomber.” Northrop Grumman paid $34.8 million in a civil settlement to cover the excessive charges and interest.... more»
10. Invalid Certificate of Insurance
Northrop Grumman Aviation was licensed by the Canadian Transport Agency (CTA) to “operate a non-scheduled international service to transport traffic on a charter basis between points in the United States of America and points in Canada.” Northrop Grumman was required to have liability insurance as part of the contract. However, CTA found that Northrop’s certificate of insurance was not valid and suspended the company’s license. Northrop’s next application for the license was approved on July 22, 2004.... more»
11. Jordan v. Northrop Grumman (Installation of Substandard Parts in Navy Target Drones)
Allegedly, Northrop Grumman knowingly installed substandard parts in target drones designed for the Navy. This was a violation of the False Claims Act 31 USC §§ 3729-3733, et. seq. The Navy found 32 drones to be defective in firing range operations. The matter was settled as part of a joint settlement with the case United States of America v. Newport News Shipbuilding, Inc. #1:03CV142-A. Of the $80 million that was paid as part of this joint settlement, approximately $20 million served as restitution for the defective drones.... more»
12. Maze v. Ingalls Shipbuilding (Improper Charging of Costs and Improper Billing)
Ingalls Shipbuilding, a subsidiary of Northrop Grumman, reached a settlement of $2.25 million with the Navy in a False Claims Act suit. The plaintiff alleged “Ingalls fraudulently exploited an accounting practice in order to shift certain costs to Navy contracts” that should have been charnged to its commercial contracts with the government of Israel and “improperly billed the government for work not performed.”... more»
13. McMorrough and Hanson v. Northrop Grumman (Failure to Properly Manufacture Replacement Parts)
In response to this qui tam action, Northrop Grumman paid $750,000 “to settle claims arising from its failure to properly manufacture more than 5,000 replacement parts it made for use on military aircraft.” Allegedly violating part of a 1992 contract with the Air Force to convert cargo planes to military aircraft, the company failed to recalibrate ovens used to manufacture replacement parts.... more»
14. Mississippi Commission on Environmental Quality Hazardous Waste Permit Violation
In a settlement with the Mississippi Commission on Environmental Quality, Northrop Grumman Ship Systems paid $9,100 and “agreed to bring its Hazardous Waste Permit into full compliance regarding proper storage, labeling and handling of hazardous waste related to the facility located in Pascagoula.”... more»
15. Mississippi Commission on Environmental Quality Title V Permit Violation
Northrop Grumman Ship Systems “violated its Title V permit conditions 3.B.1 and 2 regarding the use of non-compliance coatings in violation of MACT standards for shipbuilding and repair, Title V permit conditions 3.B.8 regarding hourly emissions limitations and Title V permit condition 3.A.2 on March 22, 2000 regarding exceedance of the 40% opacity limits.” Additionally, the company “modified its facility without appropriate prior permitting.”... more»
16. Occupational Safety and Health Administration Citation
After a welder was crushed between two ship modules, the Labor department’s Occupational Safety and Health Administration (OSHA) investigated the company’s safety standards. “OSHA cited the company's Gulfport facility, where about 800 employees make modules used in ship construction, for 33 serious safety violations with a proposed penalty of $131,000...As part of the pre-citation settlement, Northrop Grumman accepted all citations, agreed not to contest the inspection results and paid all penalties.”... more»
17. Procurement Fraud (1996)
According to a GAO report cited by Senator Harkin and Representative DeFazio, Northrop Grumman paid $100,000 to the government to settle a matter involving “procurement fraud.”... more»
18. Procurement Fraud (1995)
According to a GAO report cited by Senator Harkin and Representative DeFazio, Northrop Aircraft Division paid $4,000,000 to the government to settle a matter involving “procurement fraud."... more»
19. Robinson v. Northrop Grumman (B-2 Stealth False Claims)
Whistleblowers filed a civil fraud case against Northrop Grumman in 1989. Though it initially declined to participate, the government joined the case in 2001, accusing Northrop of fraud in two separate instances. They alleged that in the early 1980s, Northrop “engaged in a fraud scheme by routinely submitting false contract proposals,” and “concealed basic problems in its handling of inventory, scrap and attrition.” In the second instance, the plaintiffs alleged that Northrop “lied to the government during a ‘Critical Design Review’” for a B-2 Bomber radar jamming device. Northrop settled the claims for approximately $62 million.... more»
20. South Coast Air Quality Management District Notice of Violation
"On July 10, 2003, the South Coast Air Quality Management District (SCAQMD) issued a notice of violation (NOV) to the Space Technology facility in Redondo Beach, California alleging sixty-four deviations from the operating conditions of an air permit. The SCAQMD and the company settled all counts alleged in the NOV by agreement dated December 19, 2003. Pursuant to the terms of the settlement agreement, on January 12, 2004, the company paid a monetary penalty of $15,000."... more»
21. United States v. Newport News Shipbuilding (Research and Development Mischarge)
Northrop Grumman paid $60 million to settle allegations that, Newport News Shipbuilding (NNS), a subsidiary acquired in December 2001, “mischarged as Independent Research and Development (IR&D) its costs for the design and development of double hulled tankers that the shipbuilder had contracts to build for commercial customers.” This was an alleged violation of the False Claims Act False Claims Act 31 USC §§ 3729, et. seq. The payment came as part of a joint settlement with the case U.S. ex rel. Jordan v. Northrop Grumman Corporation (CD CA No. 95-2985-ABC). Total restitution for the two cases amounted to $80 million.... more»
22. Cost/Labor Mischarging
According to a GAO report cited by Senator Harkin and Representative DeFazio, Northrop Grumman paid $145,250 to the government to settle a matter involving "cost/labor mischarging."... more»
23. Unfair Labor Practices
“National Labor Relations Board General Counsel Arthur F. Rosenfeld announced today final settlement of longstanding unfair labor practice cases involving the former Avondale Industries, resulting in disbursement of over $2 million in backpay to 61 employees…Under terms of a final settlement agreement approved by the Board on December 19, 2001 (337 NLRB No. 15), Northrop Grumman, the current owner of the shipyard, paid $2,150,274 to the Board."... more»
24. Violations of the McNamara-O'Hara Service Contract Act
“Northrop Grumman Information Technology Inc. has paid $429,041 in back wages to 301 mechanics, technicians and range specialists working at Fort Hood, Texas, after a U.S. Department of Labor investigation revealed violations of the McNamara-O'Hara Service Contract Act (SCA)… The investigation covering the period March 1, 2001, to Sept. 30, 2003, found the company paid $1.39 per hour for health and welfare benefits, rather than the $1.92 to $2.15 hourly rate required by the SCA. In addition, the company paid lower hourly wage rates because some workers were misclassified in the occupation.”... more»
25. NRO Satellite False Claims
Northrop Grumman Corp., its Northrop Grumman Space and Mission Systems Corp. subsidiary, and its predecessor, TRW Inc., agreed to pay $325 million to settle False Claims Act allegations that Northrop and TRW provided and billed the National Reconnaissance Office (NRO) for defective microelectronic parts known as Heterojunction Bipolar Transistors (HBTs) manufactured by TRW from 1992 to 2002. (Northrop Grumman acquired TRW in 2002). As a result, the government alleged that Northrop and TRW integrated into NRO satellite equipment certain defective HBTs. The government also claimed that Northrop and TRW made misrepresentations about and concealed certain material facts regarding the reliability of the HBTs. The settlement resolved a whistleblower lawsuit filed in 2002 by Robert Ferro, an employee of the Aerospace Corporation, a federally funded research lab.... more»
26. Cleanup of Groundwater Contamination at San Gabriel Valley
The U.S Environmental Protection Agency (EPA) reached a settlement with Northrop Grumman Space & Mission Systems Corporation, two related entities, and 43 cash-out parties that requires Northrop Grumman to clean up groundwater contamination at the Puente Valley Operable Unit of the San Gabriel Valley Superfund Site, Area 4, in Southern California. Northrop Grumman, on behalf of all of the settling defendants, will spend an estimated $21 million to build a groundwater cleanup system that uses wells to pump out contaminated groundwater, preventing it from further migration. Northrop Grumman will also install water conveyance pipelines and construct a treatment plant to remove Volatile Organic Compound (VOC) contaminants from the groundwater. Northrop Grumman has already spent over $10 million implementing the intermediate zone remedial action in compliance with an order EPA issued on March 21, 2002. The settlement also provides for reimbursement of $465,420.90 to EPA, and $90,000 to the California Department of Toxic Substances Control for past costs.... more»
27. Virginia IT Contract Audit Report
The Virginia Joint Legislative Audit and Review Commission (JLARC) reported on Northrop Grumman’s contract to manage the state’s information technology infrastructure. JLARC noted problems with the $2 billion contract, such as cost overruns, missed deadlines and network and computer outages at state offices. JLARC also faulted Virginia officials for poor oversight. See related Northrop Grumman instance, "August 2010 Virginia Government Computer Outage".... more»
28. Improperly Charging for Lodging Expenses On Army Contracts
Northrop Grumman paid $700,000 to settle claims of fraudulent and improper billing under two defense procurement contracts. The government alleged that Northrop submitted false claims to the government and improperly charged for lodging expenses for Northrop employees who actually stayed in accommodations provided by the government.... more»
29. Failure to Test Navigation System Components
Northrop Grumman paid $12.5 million to settle False Claims Act allegations that, from November 1998 until February 2007, Northrop’s Navigation Systems Division failed to test commercial-grade electronic components to ensure that they would function at the extreme temperatures required for military and space uses. The components were being manufactured for the Navy, Army, Air Force, Defense Logistics Agency, the National Aeronautics and Space Administration (NASA), the Coast Guard and the Forest Service for use in airplane, helicopter, submarine and space equipment navigation systems.... more»
30. Possible Release of Hazardous Waste
On June 30, 2003, the California Environmental Protection Agency and Northrop Grumman entered into a consent decree to resolve investigation findings that waste management units may have released hazardous waste. Under the agreement, Northrop Grumman must make an advance payment of $47,611, with costs potentially reaching $768,317.... more»
31. Failure to Test Parts in Night Vision Goggles and Sniper Scopes
Northrop Grumman agreed to pay the government $8 million to settle charges it failed to test tubes used in night vision goggles and sniper scopes used by U.S. troops in Afghanistan and Iraq. An investigation found problems with reviews of testing procedures by Northrop Grumman and predecessor Litton Industries Inc. at Northrop Grumman's Tempe, Ariz. plant from 2000 to 2002. According to prosecutors, the faulty tests did not result in safety concerns, and Northrop voluntarily informed the Defense Department of the problem in 2002.... more»
32. Using Automated Fingerprint Identification Software Without Permission
Northrop Grumman settled a lawsuit filed by biometrics technology company Cogent Systems that accused Northrop of using Cogent’s automated fingerprint technology without permission. Cogent claimed it did not give Northrop permission to use its automated fingerprint identification software for a contract with the British Police Information Technology Organization, and its successor, the National Policing Improvement Agency. Under the terms of the agreement, Northrop agreed to pay Cogent $25 million to settle the lawsuit and $15 million for a non-exclusive license to use the software. Northrop and Cogent also agreed to a five-year research and development, service and products agreement, under which Northrop will pay Cogent $20 million for products and services over the term of the agreement.... more»
33. Export Administration Regulations Violations
Northrop Grumman Corp. agreed to pay a $400,000 civil penalty to settle allegations that it committed 131 violations of the Export Administration Regulations, both in its own capacity and as successor to Litton Industries, Inc. (acquired by Northrop Grumman in 2001). The allegations involved the unlicensed export of components for navigation equipment and module manufacturing data to the Philippines, Singapore, Malaysia, Italy and the United Kingdom between 1998 and 2002.... more»
34. Violation of Federal Safety Standards at Newport News Shipyard
Northrop Grumman Corp. paid a $5,000 fine for violating federal safety standards in the February 2008 death of an employee at its Newport News shipyard. The Occupational Safety and Health Administration (OSHA) found Northrop Grumman in violating for not providing a body harness for the employee, Kevin Batten, who died after falling off the aircraft carrier USS Carl Vinson while working on its ventilation system.... more»
35. Export Violations Involving the LTN-72 and LTN-92 Inertial Navigation Systems
Northrop Grumman Corp. agreed to pay $15 million in fines and remedial compliance measures to settle allegations that it committed 110 violations of the Arms Export Control Act (AECA) and the International Traffic in Arms Regulations (ITAR). The violations involved sales of modified LTN-72 and LTN-92 aircraft navigation systems, both in Northrop Grumman’s own capacity and as successor to Litton Industries, Inc. (acquired by Northrop Grumman in 2001), between 1994 and 2003.... more»
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