Northrop Grumman Wins Settlement

Northrop Grumman Corp. has won a $20-million settlement from the Justice Department, an outgrowth of the Los Angeles-based firm’s long legal saga over its MX missile guidance system. The MX quagmire dates back to 1986, when the federal government began investigating allegations of defects and improper billing in the firm’s contract to build a key guidance device for the MX known as an inertial measurement unit, or IMU. Northrop filed the claim in 1988, but it was held in abeyance while a related matter was litigated. After the company won that litigation last year, the Justice Department agreed to pay the $20-million settlement, and it was included in the firm’s third-quarter earnings, a spokesman said. The dispute was over whether engineering work to develop a black box called an “interface test adapter” could be billed to the firm’s contract to develop the IMU. Northrop has won several suits arising out of the 1986 investigation, but has also agreed to pay settlements of several others--a mixed record.