Northrop Grumman Corp. (NOC) has paid $11.4 million to the U.S.
to settle a claim that the aerospace and defense company made
improper charges to its federal contracts, the Justice Department
said Monday.
Northrop charged certain costs for deferred employee
compensation to the contracts, and, in doing so, failed to abide by
the terms of a settlement in 2002, the department said.
"Federal contractors must abide by the obligations they accept
when contracting with the government, including compliance with
federal regulations restricting the types and amount of costs they
can charge to their federal contracts," said Stuart F. Delery,
assistant attorney general for the Justice Department's civil
division.
A representative for Northrop Grumman wasn't immediately
available for comment.
Under the 2002 agreement with the Defense Contract Management
Agency, the company had agreed to limit the amount of deferred
compensation it would include in proposals for government
contracts, the Justice Department said. However, the department
added, the government's contracting officer found the company had
failed to honor the terms, and the government claimed that it was
induced to pay more than $1.9 million in unallowable costs.
Shares of Northrop Grumman were down 11 cents after hours at
$109.83. Through the close, the stock was up 63% so far this
year.
Write to Michael Calia at michael.calia@wsj.com
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