Northrop Grumman will shell out $4.75 million to Virginia for losses that resulted from a massive computer outage last year that affected the Department of Motor Vehicles and 25 other state agencies.
“We are committed to holding all state contractors accountable for the performance of their duties on behalf of the commonwealth and its citizens,” said Gov. Bob McDonnell. “Northrop Grumman will pay the full costs incurred by the state during last year’s outage. In addition, the company will pay to put in place new procedures and systems to ensure, to the greatest extent possible, that a similar outage does not occur in the future.”
Northrop spokeswoman Christy Whitman said she was pleased that the company reached an agreement with the state, as did McDonnell.
“This agreement brings closure to this incident,” McDonnell said, “and provides the commonwealth with an improved information technology infrastructure that will reliably support Virginia’s citizens and agencies in the years ahead.”
Secretary of Technology Jim Duffey said that the package includes monthly invoice credits over the next two years totaling nearly $2 million – which represents the costs incurred by the state from the disruption.
Northrop will also spend $2 million to make improvements to the system, including database backup and monitoring, and $750,000 to pay for a “point in time” technology to protect data held by the state.
It had previously paid $250,000 for a third-party audit of the incident, which concluded that the outage resulted from the failure of a key data storage system and human error during its repair.
Virginia in 2005 signed a 10-year contract worth more than $2 billion with Northrop to manage and upgrade its computer network; the contract was extended by three years in 2010.
