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WASHINGTON, D.C. -- The Department of Justice today announced that Northrop Grumman Corporation has agreed to pay $750,000 to settle claims arising from its failure to properly manufacture more than 5,000 replacement parts it made for use on military aircraft.

Under the Joint Stars (JSTARS) program, the 1992 contract with the Air Force required Northrop Grumman to convert used Boeing-built commercial cargo planes to military aircraft. The contract also required the aircraft company to calibrate the ovens it used in manufacturing new aluminum replacement parts in order to heat treat the parts for strength and flexibility.

The government claimed that, from March 1993, until October 1995, Northrop Grumman failed to calibrate and properly maintain the ovens. The government further alleged that after the aircraft company's failure to comply was documented in internal audits and other reports in 1994, Northrup Grumman failed to rectify the problem.

After a thorough evaluation, the Air Force determined that the strength and flexibility of the newly manufactured parts did not affect the flight worthiness of the six aircraft in which the parts had been installed.

"Today's settlement is an example of the Justice Department's determination to insure that work contracted for our armed forces is carried out at the highest possible standards," said Acting Assistant Attorney General David W. Ogden, in charge of the Civil Division. The suit was filed in Lake Charles, Louisiana, where Northrop Grumman performs part of the JSTARS contract.

The settlement announced today will resolve a portion of a suit that two former Northrop Grumman employees filed on behalf of the government under the whistleblower provisions of the False Claims Act. The government took over a portion of that suit in 1998 and filed its own separate complaint last year.

Under the settlement, the government's complaint will be dismissed. Today's settlement does not resolve the portion of the whistleblowers' lawsuit in which the government did not intervene and which they continue to litigate on their own. Also as part of the settlement, the two former Northrop Grumman employees will receive $180,000 as their share of the $750,000.

The matter was investigated by the Defense Department's Defense Criminal Investigative Service.

The lawsuit is filed as U.S. ex rel McMorrough and Hanson v. Northrop Grumman Corporation, No. 95-0382.

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