Military Overcharges
by Russell Mokhiber

Northrop Grumman Corporation agreed in August to pay $80 million to resolve two separate allegations of overcharging the government and selling the Navy defective military equipment.

The two actions against the company were brought under the False Claims Act.

In one action, the government alleged that, from 1994 to 1999, Northrop Grumman subsidiary Newport News Shipbuilding, mischarged as Independent Research and Development its costs for the design and development of double-hulled tankers that the shipbuilder had contracts to build for commercial customers.

Newport News will pay $60 million to settle the allegation.

In a second action, Northrop Grumman agreed to pay $20 million to resolve allegations that the company knowingly sold the Navy unmanned aerial vehicles, known as Target drones, that contained defective parts.

Meanwhile, the largest U.S. military contractor, Lockheed, has agreed to pay more than $37 million to resolve allegations that it inflated the cost of performing several Air Force contracts.

© Multinational Monitor October 2003