AF Review Faults Northrop, Congressman Says : Weapons: The manufacturer of the stealth bomber has major problems in engineering and other business areas, Rep. Dingell charges.

An Air Force review found Northrop Corp., manufacturer of the B-2 stealth bomber, beset with problems in nearly every aspect of its business, a House lawmaker said today.

Concerned about Northrop’s poor performance in the production of several weapons systems, the Air Force conducted an in-depth study of the company in June and July that found problems in six major areas.

The service identified weaknesses in systems engineering, the transition from research and development to production, software management, subcontract management, organization and personnel, and business systems, which includes cost and schedule estimates.

“The Air Force team found that Northrop failed miserably in every key management area necessary to the successful development and production of a major weapons system,” said Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee and its investigations subcommittee.

The subcommittee’s ranking Republican, Rep. Thomas J. Bliley Jr. of Virginia, said he found it “distressing that a company that has been entrusted with over $36 billion since 1980, and that has been counted upon to manage programs critical to our national defense, could have so many fundamental deficiencies.”

Loye Miller, a spokesman for Northrop in the Washington, D.C., area, said the company had not seen Dingell’s statement prepared for the opening of a subcommittee hearing today, and would have no immediate comment on the allegations.

Justice Department officials told the panel in July that the California company should be barred from government business.

The officials described how Northrop falsified reports on the air-launched cruise missile and conducted improper tests on the Harrier AV-8B jet. Northrop also manufactures the B-2 bomber and is in competition with Lockheed for the contract on the Advanced Tactical Fighter.

The company’s action led to its guilty plea in February on 34 charges of fraud and a fine of $17 million, the largest criminal fine ever imposed on a defense contractor.

In his statement for today’s hearing, Dingell noted a June 5 letter to Kent Kresa, Northrop’s president and chief executive officer, in which the Air Force said that “while some programs have shown improvement in the past year, others, including Tacit Rainbow (a missile program) and key classified programs, continue to reflect poor performance.”