USPS demands $394 million from Northrop in contract lawsuit

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The U.S. Postal Service is demanding almost $400 million from contractor Northrop Grumman in a legal battle over a massive automation project gone awry.

Northrop was supposed to deliver 100 machine systems to sort magazines, large envelopes and other “flats” by October 2010, according to a USPS response last week to Northrop’s lawsuit filed in May. Instead, the “flats sequencing systems” — each about the length of a football field — were not fully deployed until August 2011, costing the Postal Service about $394 million in extra labor costs, according to the filing, which accuses Northrop of breach of contract.

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