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Northrop Sues Lockheed Over $4 Billion Army Contract
Associated Press
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NEW YORK — 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.

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