Northrop Grumman Corp. has agreed to pay $1.4 million to settle a whistle-blower lawsuit that accused the defense contractor of overcharging the U.S. Air Force for B-2 bomber instruction and repair manuals, federal prosecutors said Friday.
In the latest allegations of overcharging on the $44-billion bomber program, a former employee accused Century City-based Northrop of violating the federal Truth in Negotiations Act by inflating cost estimates on the manuals.
Northrop officials Friday denied any wrongdoing and said it settled the lawsuit to avoid disruption to the company.
"Northrop denies any liability in this case," said James W. Taft, a Northrop spokesman. "We assessed the cost of litigation and disruption to our operation and determined it was reasonable to settle."
In the lawsuit, filed in U.S. District Court in Los Angeles in 1996, the employee, Gary Youker, alleged that Northrop overestimated how much it would cost to purchase the manuals prepared by Boeing Co. and other subcontractors. As a result, the prices paid for the documents by the Air Force were excessive, the lawsuit alleged.