The Department of Justice announced on Friday that Northrop Grumman was ordered to pay the U.S. government $30 million as a settlement for falsely billing hours to the Air Force between 2010 and 2013.
In an internal memo to employees, Northrop Chairman and CEO Wes Bush stated he believes the company followed its internal procedures and appropriately handled the issue.
Northrop is to make a payment of $25.8 million to the federal government. Additionally, the company will be required to pay 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 was previous sited for the same issue and was ordered to pay $1.65 million.
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 the government for hours they did not work.
“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 weeding out abuse and will swiftly pursue all available remedies when egregious fraud occurs.”
John Brown, special agent in charge of the FBI’s San Diego Field Office added: “Uncovering this immense fraud against the government and returning the funds to the American taxpayer is extremely 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 occur. 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.”