Northrup Grumman Corp. Pays $325M to Settle Defective Satellite Parts Case

After a long legal battle, Northrup Grumman Corp.; its predecessor, TRW Inc.; and a Northrup Grumman subsidiary settled False Claims Act allegations for $325 million in 2009. The lawsuit alleged that Northrop and its subsidiary, Northrop Grumman Space and Mission Systems Corp., provided and billed the National Reconnaissance Office for defective microelectronic parts used in satellites.

A government investigation revealed that Northrup and TRW did not properly test and qualify the parts, called Heterojunction Bipolar Transistors (HBTs), between 1992 and 2002. The investigation also found that the companies misrepresented and concealed information regarding the parts’ reliability.

The lawsuit was initially filed in 2002 by an employee of The Aerospace Corporation in a California federal court. The whistleblower received $48.75 million as his share of the government’s recovery.

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