Northrop Grumman Corporation

Material Facts

• From 1995 through 2006, Northrop used the DEFRA method to measure and assign the Plan's post-retirement benefit costs for government contract accounting purposes.
• Northrop disclosed its DEFRA accounting practice in its CAS Disclosure Statements, and the government consistently approved that practice during the period at issue.
• DCAA did not identify unallowable Plan costs in audits of Northrop's Corporate Home Office final indirect cost submissions for periods between 1995 and 2005.
• Northrop adopted FAS 106 for government contract accounting purposes effective 1 November 2006.
• Effective 1 November 2006, Northrop amended the Plan by capping future benefits at fixed dollar amounts.
• The 2006 Plan amendment removed approximately $307 million from the accumulated post-retirement benefit obligation before Northrop calculated the transition obligation.
• Northrop has not claimed the disputed pre-transition costs in 2007 or any subsequent year.
• The only government actuarial witness addressing the disputed costs agreed with the analysis of Northrop's actuarial expert.

Parties

Appellant

Northrop Grumman Corporation

Respondent Agency

Defense Contract Management Agency

Contract Number

N68936-05-C-0059