Engineering group Northrop Grumman has filed a lawsuit against the US Postal
Service (USPS) following alleged breaches of an $874m contract by USPS to
provide Flats Sequencing Systems (FSS) to the company.
The contract was for the purchase and installation of approximately 100 FSS
machines under the parcel delivery company’s current modernisation
programme, which has been put in place in order to improve mail sorting
FSS machines allow the sorting of flat shaped mail, like periodicals, into delivery
sequence order. This means mail operatives do not need then need to spend time
putting mail into address order for their delivery routes prior to starting their
Northrop Grumman says that from installing the first FSS machine in Dulles,
Virginia, in late 2007 through to the final machine being deployed in 2011, USPS
improperly took over design control for the FSS machines and ignored customer
worries over the performance specifications of the machines while continuing to
USPS engineers allegedly made thousands of changes to design drawings as the
machines were deployed.
This resulted in significant delays and disruption to the contract, said Northrop
From July 2010 through to last year, they demanded three payments from USPS
for delays to the contract due to problems with the FSS machines as well as
unpaid contract fees adding up to just under $180m for non-payment of invoices.
In reply to its demands, the company received a refusal to pay and a counter-
demand from USPS to pay it $341m for late delivery of the FSS machines and on
the grounds that delays in the project resulted in cost savings not being realised.