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State May Sue Northrop Grumman

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The company at the center of Virginia's troubled technology contract wants more money from Richmond, even as the state struggles with a huge budget shortfall. 

That's one of the items that came out of a legislative hearing this morning, the last of a months-long probe by the general assembly's investigative arm.

There is also talk of a possible lawsuit, with a deadline that's fast approaching. 

The state hired Northrop Grumman to take over, upgrade and manage Virginia's computer system.  A legislative inquiry found the firm hasn't lived up to its contractual obligations, and now the state might be ready to sue. 

Republican delegate Morgan Griffith is the House majority leader. Griffith says, "It appears the corporate giant may have us bent over a barrel." 

Members of the legislature's investigative arm continued a probe into the troubled contract, hearing for the first time that Northrop Grumman might be willing to go to arbitration to work out the differences. 

Jorman Granger is with Northrop Grumman. He says, "If it is to facilitate communication, to help the process and to improve it and to resolve it, I'm pretty sure we would say yes." 

The company claims the state hasn't lived up to its end of the deal either. 

A Northrop Grumman executive said new payments of up to $30 million could help solve the dispute. It's an idea that didn't sit well with lawmakers. 

Democratic State Senator Edd Houck of the 17th district says, "You would be looking for an additional $25 to 30 million at the same time that we're cutting agencies, got a tremendous problem with frail elderly?" 

Granger says, "That's part of the dilemma I think we find ourselves in trying to find the right way to deal with all of this." 

A decision about whether to file a lawsuit or whether to pursue arbitration could come by the end of the week. 

There is some concern that mediation may not work, because the contract states that arbitration isn't binding, meaning either side could simply disregard whatever comes out of it.

Reported by Adam Rhew
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