WASHINGTON — Northrop Grumman will have to pay the U.S. government $30 million as a settlement for falsely billing hours to the Air Force between 2010 and 2013, the Department of Justice announced Friday.
But in an internal memo to employees obtained by Defense News, Northrop Chairman and CEO Wes Bush expressed his belief that the company followed its own internal procedures and appropriately handled the issue.
Northrop will make a payment of $25.8 million to the federal government. Additionally, the company will forfeit an additional $4.2 million to the Criminal Division of the U.S. Attorney’s Office for the Southern District of California, bringing the total of Friday’s settlement to $30 million. (Northrop had previously been hit for $1.65 million for the same issue.)
The issue stems from two Northrop contracts, the Battlefield Airborne Communications Node, an airborne communications relay, and the Dynamic Re-tasking Capability. Per the Justice Department, between July 1, 2010, and Dec. 31, 2013, Northrop employees stationed in the Middle East billed hours they did not work to the government.
“Federal contracts are not a license to steal from the U.S. Treasury,” U.S Attorney Adam Braverman said in a statement. “DOJ is firmly committed to vigilantly weeding out abuse and will swiftly pursue all available remedies when egregious fraud occurs.”
Added John Brown, special agent in charge of the FBI’s San Diego Field Office: “Uncovering this immense fraud against the government and returning the funds to the American taxpayer is vitally important to ensuring our military receives the honest services they are due.”
In a statement, Northrop Grumman spokesman Tim Paynter said the company identified the issue and reported it to the government in 2013.
After the DOJ announcement, Bush sent an internal memo to staff, saying: “There should be no doubt, the misconduct of these former employees does not reflect who we are as a company, nor the values we embrace."
“We took disciplinary action against those who we found acted improperly and violated company policy, and we took corrective action to strengthen our time-charging processes even further. We cooperated with the government as it investigated the issues over the following years,” Bush wrote in his memo.
“I am proud of the responsible way the company acted ― investigating, reporting and fixing issues as they arose. As always when we experience a disappointing situation such as this, we are using this opportunity to learn and further improve,” Bush continued. “This provides a strong reminder of the importance of adhering to our values in everything we do. It also serves as a reminder to us all that we each have a responsibility to speak up if we have any concerns.”
Aaron Mehta was deputy editor and senior Pentagon correspondent for Defense News, covering policy, strategy and acquisition at the highest levels of the Defense Department and its international partners.