Northrop Grumman Sues USPS Over $874M FSS Contract
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.
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