The Justice Department on Friday said that Northrop Grumman [NOC] has agreed to pay $27.5 million to settle allegations that the company violated the False Claims Act with regard to overbilling on two Air Force contracts.
The settlement relates to the Battlefield Airborne Communications Note (BACN) the Dynamic Re-tasking Capability (DRC) contracts for alleged billing by employees for hours they hadn’t worked from 2010 to 2013. The Justice Department said the company will make a $25.8 million payment. Previously, the company made earlier repayments, bringing the total settlement to $27.5 million.
“Contractors that knowingly inflate their bills to the government will face consequences,” Assistant Attorney General Joseph Hunt said in a statement. “This settlement demonstrates, once again, that we will not tolerate those who falsely charge the armed forces or any agency of the United States to illegally profit at the expense of the American taxpayer.”
In a statement, Northrop Grumman said its own investigation identified the violations and reported them to the government, adding it has cooperated with the government’s investigation.
“The improper charging was in direct violation of company policies, procedures and training,” Northrop Grumman said. “There should be no doubt the misconduct of these former employees does not reflect the values of our company. We are committed to our strong culture of ethics and integrity and we will continue to learn and to take the steps necessary to protect and enhance our culture.”
Northrop Grumman said it will repay the government $30 million and that the payment was factored into the company’s most recent financial guidance for the remainder of 2018.
The BACN system allows warfighters in mountainous terrain with challenging line-of sight environments to communicate with each other. The DRC system provides situational awareness to tactical airlift crews.
The Justice Department pointed out that the settlement refers to claims that are allegations and that there isn’t a determination of civil liability.