In July 2006, the government fined Northrop Grumman $33.7 million for allegedly billing the government for unallowable costs associated with the company’s employee stock incentive program during fiscal year 2003. The government claimed that Northrop calculated stock program costs using a performance factor of 150 percent rather than the 75 percent rate to which the parties had earlier agreed, which resulted in $26.8 million in questioned costs. Northrop Grumman filed a lawsuit in 2007 disputing the fine, to which the government filed a False Claims Act counterclaim.