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Northrop Grumman Pays $11.4 Million to Settle U.S. Claim

Northrop Grumman Corp. paid $11.4 million to settle a U.S. government claim that it charged employee deferred compensation awards to federal contracts in violation of a 2002 agreement, the Justice Department said.

Northrop had agreed 11 years ago in the settlement with the Defense Contract Management Agency that it would limit the amount of deferred compensation in future contracts, the government said in a statement.

The government’s contracting officer found that Northrop violated the agreement and should be assessed a penalty of twice the amount of the excessive claims, the Justice Department said. Northrop, based in Falls Church, Virginia, challenged the finding in the U.S. Court of Federal Claims in Washington.

“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,” Stuart Delery, head of the Justice Department’s civil division, said in the statement.

A Northrop representative didn’t respond to a request for comment.

The case is Northrop Grumman Corp. v. U.S., Fed. Cl. No. 07-482C, Washington, D.C.

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