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Northrop Grumman

B-2 Bomber Advance Topcoat System Fraud Investigation

Date: 12/08/2010 (Date of Settlement Announcement)

Misconduct Type: Government Contract Fraud

Enforcement Agency: Defense – Air Force

Contracting Party: Defense - Air Force

Court Type: Civil

Amount: $5,210,000

Disposition: Settlement

Synopsis: 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.