Northrop Grumman Corp. is suing Lockheed Martin
Corp. for allegedly cutting it out of a $4 billion Army contract,
escalating a fight among various companies over the shrinking
number of military contracts, The Wall Street Journal reported
Friday.
The suit was filed in San Jose, Calif. in December but not
previously publicly reported. It alleges that after Northrop helped
Lockheed secure a contract to manufacture a new missile defense
system, Lockheed assigned Northrop's share of the job to one of its
own production units.
The dispute stems from the contract for the Army's Theater High
Altitude Area Defense program, known as THAAD. The system provides
soldiers on the battlefield protection from missile assaults.
Northrop, which is based in Los Angeles, argues in the suit that
its defense-electronics unit was initially contracted to provide
the canisters that launch the THAAD missile interceptors. The suit
alleges that Lockheed ultimately turned the job over to its own
unit in Middle River, Md.
Pete Harrigan, a spokesman for Lockheed, told the Journal that
the lawsuit was "without merit." He said the company chose to
switch from Northrop because Northrop "chose to ignore repeated
suggestions and advice on techniques to lower its costs."
The suit is seeking limited damages, but it underscores the
tremendous latitude large contractors have over the distribution of
subcontracts in the post-Cold War era defense industry. Prior to
the downsizing of military budgets in recent years, defense
officials played a larger role in the structuring of contracts.
