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Northrop Sues Lockheed Over Army Contract

February 24, 2001|From Reuters

NEW YORK — Northrop Grumman Corp. said it has filed suit against the nation's largest defense firm, Lockheed Martin Corp., for allegedly eliminating it from a major U.S. Army contract.

Northrop claims it helped Lockheed win a $4-billion contract to start a new missile-defense system but that Northrop's share of the work was then assigned to a Lockheed unit.

The suit was filed in federal court in San Jose in December and first reported by the Wall Street Journal on Friday.

The program in question is known as THAAD, or Theater High Altitude Area Defense, developed to protect troops from missile attacks. Lockheed's missile and space unit is the primary contractor for the program. Northrop says its defense electronics business was supposed to provide the canisters to launch missile interceptors.

Bethesda, Md.-based Lockheed said Northrop's position implies it felt entitled to a piece of the work instead of seeing the agreement as a commitment to work in partnership. Lockheed claims Northrop ignored advice on ways to lower costs.

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