The U.S. Army will press Northrop Grumman Corp. (NOC) for refunds after the Pentagon’s inspector general found the contractor charged the service inflated labor rates on programs to fight drug trafficking.
The Army Contracting Command will conduct its own audit “as soon as feasible” of Northrop’s billings and the resumes of subcontractor workers to determine how much money should be repaid, spokeswoman Giselle Lyons said in an e-mail.
Allegations in the report “are being further investigated by the U.S. Army Contracting Command,” she said. “The command is implementing the recommendations proposed to help ensure the proper management and oversight of current and future contract actions.”
Northrop, the fifth-biggest U.S. contractor, charged the Army excessive labor rates for almost six years for more than 300 subcontractor employees working in Afghanistan and in the U.S. on counter-narcotics efforts abroad, the inspector general said in a May 13 report labeled “For Official Use Only” and obtained by Bloomberg News.
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