On June 23, 2010, the U.S. Department of Justice announced that it has entered into a settlement agreement Northrop Grumman Corp. in which the company has agreed to pay $12.5 million to resolve allegations in a lawsuit brought under the False Claims Act alleging that the defense contractor submitted false claims to the government in connection with electronic parts it sold to the government to be used in navigation systems for military aircraft and submarines. Specifically, the government alleged that Northrop Grumman claimed that it had tested the electronic components to ensure that they would function at high temperatures required for military and space uses, when in fact the company had not conducted such testing.
The qui tam lawsuit was filed on behalf of the government by a whistleblower who was a former Northrop compliance manager. The whistleblower will receive a $2.4 million share of the settlement as a reward for disclosing Northrop’s alleged fraud.