Northrop Grumman Mission Systems

Material Facts

• NGMS performed the Battlefield Airborne Communications Node contract for the Air Force.
• Northrop Grumman disclosed that some NGMS employees may have mischarged portions of their time while working at an air base near Abu Dhabi.
• Northrop Grumman engaged outside counsel to investigate certain OCONUS charging practices and billed the BACN legal costs to the government.
• NGMS submitted final indirect cost proposals that were audited by DCAA.
• NGMS later informed the government that it would treat the BACN legal costs as 100% unallowable and remove them from its cost proposals for 2012 to 2016.
• Northrop Grumman and the United States Attorney's Office for the Southern District of California entered into a civil and criminal settlement.
• The settlement addressed unallowable costs incurred in connection with the investigation, defense, and corrective actions, including attorney's fees, and provided for repayment and applicable interest and penalties.
• The DACO determined that NGMS had included expressly unallowable legal costs related to the BACN criminal matter in its final indirect cost proposals.
• The DACO assessed a penalty and interest based on the amount allocated to covered contracts and reimbursed through interim billings.

Parties

Appellant

Northrop Grumman Mission Systems

Respondent Agency

Defense Contract Management Agency

Contracting Agency

Air Force

Contract Number

W91QUZ-07-D-0005