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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 »

Northrop Grumman

Bagley v. TRW Inc. (Cost Mischarges)

Date: 06/09/2003 (Date of Settlement)

Misconduct Type: Cost/Labor Mischarge

Enforcement Agency: Multiple Agencies

Contracting Party: Multiple Agencies

Court Type: Civil

Amount: $111,200,000

Disposition: Settlement

Synopsis: 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.