Northrop Grumman Sues USPS Over $874M FSS Contract

May 7, 2012 by
Filed under: FSS 

Grumman claims USPS owes them $$millions -misunderstanding over $412  million contract discount

PR note: I will  update this article in a few hours.

Law360, New York (May 07, 2012, 3:19 PM ET) — Northrop Grumman Corp. on Friday sued the federal government for allegedly breaching an $874 million U.S. Postal Service contract by improperly delaying and disrupting the company’s work to install machines that help sort mail.

The company says that since the Postal Service awarded the fixed-price contract for the Flats Sequencing System, a huge system of machines that sort flat mail such as envelopes, it has hampered the project by continually altering and updating its requests for how the project should proceed.

More: Northrop Grumman Sues Over $874M Postal Service Contract – Law360.

Northrup Grumman says USPS owes them over $60 million

On October 28,2011, NGSC submitted to the Postal Service a third certified claim in the amount of$63,433,909.73, for the Postal Service’s deliberate and improper non-payment of invoices submitted under the Production Contract and its repudiation ofany further I payment obligations under the Contracte “Third Certified Claim”).

Immediately following execution ofthe Production Contract in February 2007 and continuing through the end of Program deployments in mid-2011, the Postal Service improperly wrested design control from NGSC, ignored the performance specifications on which the firm fixed-price Production Contract had been based, persistently and  pervasively imposed extra-contractual design requirements on NGSC, and otherwise interfered with NOSC’s performance. Contrary to the terms of the Production Contract, the Postal Service treated the Contract as a “build-to-suit” development enterprise.

As a direct result of the mutual understandings regarding, inter alia: (a) the performance I specification on which the Production Contract was based; (b) the timely availability of necessary information to support the construction of the FSS systems; (c) the contractual I partnership relationship that would obtain; and (d) the contractual protection afforded to I NGSC should these agreements be breached, the Postal Service derived a pricing benefit of approximately $412 million.

Here is the court docs filed by Northrop Grumman
USPS answer is due by 7/5/2012

Northrop Grumman vs USPS – FSS Contract

Comments

18 Comments on Northrop Grumman Sues USPS Over $874M FSS Contract

  1. Just Saying on Mon, 7th May 2012 5:48 pm
  2. Oh well–there goes my incentive pay to retire early!!

  3. ho more slavery on Mon, 7th May 2012 5:51 pm
  4. Having worked during the FSS installation, it was obvious USPS management had made a mistake ordering the monster rube goldberg machine. Then management did to Northrup what they do to all entities that are involved with the USPS, they lie,manipulate, and violate any and all contacts, because management cant be terminated. The USPS just loses money and then blames the unions or a drop in first class mail.

  5. Tony on Mon, 7th May 2012 6:31 pm
  6. Another reason why Donut – hole should resign!!!! That’s what Gomer Pyle, i mean Potter did… Donahue is no leader!!!! When he was a Postmaster in Lancaster, Pa.. He fucked everything up.. Amazes me how so many stupidvisors become promoted to the ” BIG BOY ” ranks… I just hope Obama wins in November… Because the REPUBLICANS definitely want to privatize us for good!!!!

  7. don on Mon, 7th May 2012 7:19 pm
  8. What’s really funny about this is that the PO doesn’t want any more machines because there’s no mail to put into them. I thought that these machines were to be bought as needed? Did the PO PMG lie to the unions and the public? Is the PO on the hook for these machines? 874 million is a lot of money, will the PMG or board of governors be held accountable for all of this? I’d like to think that maybe some one may get prosecuted over this fiasco. Even the POTUS should take notice of this blunder. Maybe some heads will finally roll! And maybe we will get some intelligent people to lead this company.

  9. Wage Slave on Mon, 7th May 2012 7:25 pm
  10. High level USPS Management thumbs their nose at ANY AND ALL CONTRACTS.

    But then, what would you expect from this organization when it’s CEO, PMG

    DONNAWHORE runs to Congress PLEADING for legislation to ALLOW THEM TO

    BREAK CONTRACTS TO SAVE THEM MONEY???

    ALL of these people are VERY LARGE WEASELS….

  11. INSPECTOR 19 on Mon, 7th May 2012 7:38 pm
  12. .

    What goes around comes around, it’s just business, what’s the big deal!

    Grumman had it coming for a long time. All that jive college boy talk, sound like those strokers on CAPITAL HILL. I wouldn’t be surpised if they had something to do with it. NG, you are stupid.

  13. kingfisher552 on Mon, 7th May 2012 7:42 pm
  14. Is anyone truly surprised at this? The ignoramuses running the PO do whatever they please. And the other ignoramuses in Congress let them. Why do you think this organization is in such dire straits?

  15. Sweet Pea on Mon, 7th May 2012 8:09 pm
  16. Northrup Grumman are liars and despicable. The machine is a piece of junk and if I were the USPS, I would not have paid them one red cent until and unless the FSS worked as promised. The problem with the fools at the top in the USPS is that in the field they accept bribes and payoffs to accept machinery. If I were the USPS, I would have the justice department look into this because the only way for these machines to continue to be deployed is due to acceptance of the machines by field/plant personnel.

    It is time the USPS stood up and held companies accountable for the false claims made.

  17. Nostradamas on Mon, 7th May 2012 8:32 pm
  18. The Postal creed is thus: the more you screw up the higher you go in the organization, e.g. Pat Donowhore.
    The FSS machines were outdated before they were installed. The Postal bosses knew this but cancelling the many BILLIONS of dollars in contracts would diminish the pay offs to managers and expose these numnuts for what they are…useless as tits on a bull.
    During the first test with all the engineers present the machines ran at a 23% error rate, totally unacceptable. They ORDERED TO BE PLACED into production despite the poor performance.

  19. Scott on Mon, 7th May 2012 10:14 pm
  20. The Postal Service nor The Board of governors have a clue at running a business, Yet they are all still getting their Bonuses which amount to about a billion a year

  21. Anonymuss on Tue, 8th May 2012 12:55 am
  22. All these f**kers involved should be put in jail.

  23. mass postal on Tue, 8th May 2012 5:34 am
  24. where are we gonna get new mail vehicles from? contracts — what a joke!

  25. HEARING AID POSTAL on Tue, 8th May 2012 10:52 am
  26. NAA NAA NAA NAA BOSS WE NEED NEW MACHINE

  27. wingman on Tue, 8th May 2012 3:20 pm
  28. Sounds like both parties are screwing each other – Northrup Grumann building shitty machines, not to mention the horrible design of the original LLV’s which most of us still have to drive. But it’s true with the top level Postal management – it’s all about lying, cheating and refusing to honor contracts, commitments or anything they don’t want to deal with.
    They seem to think they’re above all laws and accountability. The bad part is that management is so corrupt it could result in a much more severe reform package that eventually gets passed when Congress gets even more pissed off at the Service’s continuing lying and arrogance. Donohoe must go now if the Service is to survive. And I thought Potter was bad.

  29. Pooh on Tue, 8th May 2012 8:57 pm
  30. The irony is that the management from the very top to the bottomfeeders at the bottom within the USPS are corrupt. They will lie, steal, cheat and munipulate to get ahead. There has been a decline in mail volume for years and they have known this. No wonder they are billions in debt. They have robbed the rural carriers blind issuing mail counts and special mail counts sometimes 2 a year, each time the salaries decrease.Karma!!!!! They waste millions of dollars fighting unions to have honest, hardworking and dedicated employees reinstated for being wrongfully terminated. Intimidation does not work, hint the city carriers are making 65k, 70k a year. The more management squeezes the more overtime city carriers get. Some offices have 3 to 4 uneduacated and feeble-minded supervisors who act as lap dogs and postmasters who have slept with just about anyone to have a management title.They micro-manage, over-manage, don’t-manage, bottom line they are INCOMPETENT. Mismanagement and abuse of management is the DEMISE of this agency, they have only themselves to BLAME!!!

  31. Sharon on Wed, 9th May 2012 4:39 pm
  32. Well what a bunch of morons to think that they had all this money to put all of those machines in, when we were in the middle of a recession. Stupid people, running a business where they dont know what they are doing. Idiots! We didnt need those machines anyway, and now look at what is happening! Fools……..idiots………unbelievable.

  33. WRA13 on Thu, 10th May 2012 8:49 pm
  34. FSS is an unmitigated disaster. Don’t blame the carriers. Don’t blame the machines. Blame the idiots runing this lunatic asylum we call a postal service.
    Donahoe and his crew of idiots couldnt run a lemonade stand at a profit.

  35. enufisenuf on Fri, 11th May 2012 9:29 am
  36. APWU says this calls for a grievance!