Northrop to Settle U.S. Claims Over Drones

Northrop Grumman Corp. has tentatively settled claims that it knowingly supplied defective aerial target drones to the government from 1988 to 1998, according to court records.

Terms of the settlement, which must be approved by the Department of Defense, were not included in the notice filed Tuesday by U.S. District Judge Christina Snyder in Los Angeles. The United States had sought about $210 million, which could have been tripled under the False Claims Act.

Northrop last month reported that net income rose 13% on sales of radar equipment, missiles and satellites and work on a new warship.

The Century City company joined other military contractors that raised their 2003 sales forecasts as the U.S. prepares to boost defense spending for the sixth straight year.

Northrop spokesman Frank Moore said the company doesn’t comment on pending litigation.

Northrop is the third-largest U.S. defense contractor based on Pentagon contracts last year. Lockheed Martin Corp., in Bethesda, Md., is No. 1, followed by Boeing Co., based in Chicago.

The U.S. Justice Department in 1995 sued Northrop, claiming that BQM-74C aerial target drones contained defective components. Aerial target drones are used for missile practice.

In an unrelated case, Northrop in June agreed to pay $111 million to settle claims that TRW, acquired by Northrop in December, overcharged the government on some space projects.

Shares of Northrop rose 1 cent to $91.01 on the New York Stock Exchange.