AFOSI aids in investigation of Civil False Claims Act Case

  • Published
Northrop Grumman Systems Corporation agreed to pay the United States $12.5 million to settle allegations that it knowingly submitted false claims to government agencies in connection with electronic parts the company supplied for use in the manufacture of navigation systems for military airplanes, helicopters, submarines and certain equipment used in space.

The case was handled jointly by the Air Force Office of Special Investigations, the Justice Department's Civil Division, the U.S. Attorney's Office, Los Angeles, the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, the Army Criminal Investigative Division, the NASA Office of the Inspector General and the Defense Contract Audit Agency, Regional Investigative Services Division.

The United States alleged that Northrop's Navigation Systems Division, located in Woodland Hills, Calif., failed to test certain commercial-grade electronic components to ensure that they would function at the extreme temperatures required for military and space use. The agencies affected by Northrop's alleged misconduct include the Navy, Army, Air Force, Defense Logistics Agency, NASA, the Coast Guard and the U.S. Forest Service.

The agreement resolves claims made in a whistleblower lawsuit filed in May 2006 against Northrop in the U.S. District Court for the Central District of California by a quality assurance manager at Northrop's Navigation Systems Division facility in Salt Lake City. The manager alleged that Northrop failed to comply with testing requirements set forth in a November 1998 protocol for the use of commercial parts in military systems. The United States alleged that the failures to test continued from November 1998 until the February 2007.

"Companies that do business with the government must comply with all of their obligations," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "The Justice Department will hold responsible those who fail to properly test the parts supplied to our men and women in uniform and others in public service."

This case was investigated as part of a National Procurement Fraud Initiative of 2006. The National Procurement Fraud Task Force is designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.