Northrop Grumman Corporation has agreed to an $80 million joint settlement of two civil False Claims Act complaints filed by the US Department of Justice.
Of the $80 million, the government allocated $60 million to settle allegations that Newport News Shipbuilding, Inc, acquired by Northrop Grumman in December 2001, improperly charged certain independent research and development costs to its government contracts between 1994 and 1999.
The suit was filed in February 2003 in the US District Court for the Eastern District of Virginia.
The government allocated the balance of the $80 million to settle claims filed in May 1995 in the US District Court of the Central District of California, related to allegedly defective aerial target drones.
The company expressly denied any liability and has agreed to settle these matters.
The company said it would not record a charge to its earnings as a result of this settlement. Although cash from operations will be affected by the settlement, the company still expects 2003 cash from operations of $1.1 billion to $1.3 billion, before the $1.0 billion tax payment.