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IG: Northrop Grumman overcharged DoD by millions

May. 20, 2014 - 06:00AM   |  
By ANDY MEDICI   |   Comments

Northrop Grumman charged the Defense Department about $100 million in questionable labor costs, according to a DoD inspector general report released May 13.

From October 2007 to March 2013, Northrop Grumman submitted labor charges of $153.6 million for 493 employees of its subcontractor DynCorp on behalf of work done for the Counter Narco-terrorism Technology Program at DoD but 360 did not meet the specific labor requirements and many of the rates were excessive, according to the report.

For example, one employee claimed 1,208 labor hours during a 12-day period when there are only 288 hours billing $176,900 for the work. Northrop Grumman charged 29,401 hours in excess of 24 hours a day, according to the report.

In total DoD authorized a total of $101.4 million in questionable labor costs that could be improper payments, according to the inspector general.

Contracting officers at the Army Contracting Command - which oversaw the execution of the contracts - did not review the labor rates before approving invoices because Northrop Grumman billed the Defense Finance Accounting Service directly.

The command approved a total of $21.7 million in potentially excessive payments and should review the invoices and recover any improper payments made to the contractor, according to the report.

The Army agreed with the findings in the report and will request documents to verify the invoices and charges and reject the charges if the contractors cannot provide supporting documentation, according to the report.

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