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The Associated Press June 23, 2010, 5:02PM ET

Northrop Grumman settles gov't lawsuit for $12.5M

Defense contractor Northrop Grumman will pay $12.5 million to settle a lawsuit with the U.S. government, according to the Department of Justice.

The civil false claims lawsuit alleged that Northrop knowingly submitted false claims to a number of government agencies. The claims were connected to electronic parts supplied for use navigation systems for military airplanes, helicopters, submarines and certain equipment used in space. The agencies affected included the Navy, Army, Air Force, Defense Logistics Agency, NASA, Coast Guard and the Forest Service.

In a statement, Northrop Grumman said it has fully cooperated with the government's investigation and is "pleased" that the matter is now behind it.

The U.S. alleged that the failures to test parts continued from November 1998 until February 2007.

The settlement resolves claims made in a whistleblower lawsuit filed in May 2006 against Northrop in the U.S. District Court for the Central District of California by Allen Davis. Davis was employed as a quality assurance manager at Northrop's Navigation Systems Division facility in Salt Lake City. His share of the settlements totals nearly $2.4 million.

Shares of Los Angeles-based Northrop Grumman fell 27 cents to $59.98 in afternoon trading Wednesday.


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