U.S. Department of Defense Names Northrop Grumman for ’Value Engineering Award’

EL SEGUNDO, Calif. - Northrop Grumman Corporation (NYSE:NOC) has been selected by the U.S. Department of Defense to receive a Value Engineering Achievement award for innovative productivity improvements.

The awards are presented each year to recognize the most innovative proposals under the Defense Department’s Value Engineering Program, which serves as an incentive for government and industry to improve value.

Value Engineering, developed in the 1940s at General Electric Co., is a systematic process widely used in government and industry to identify actions that improve performance, reliability, quality, safety and life cycle costs. The Defense Department said a total of 3,473 government and contractor-initiated proposals were accepted during fiscal year 2006 with projected savings/cost avoidance in excess of $1.6 billion.

Northrop Grumman was nominated for its Value Engineering Achievement award by the Defense Contract Management Agency (DCMA), which cited the implementation of Six Sigma and Lean principles at the company’s Integrated Systems sector. According to the DCMA nomination, Northrop Grumman’s implementation of these initiatives “has been increasingly reducing costs, improving quality, enhancing effectiveness and increasing efficiency throughout the enterprise and on Defense Department weapon system acquisition contracts and services.”

The 2006 Defense Department Value Engineering awards will be presented May 16, 2007 at the Pentagon.

“This award is a tribute to the hard work of dedicated employees, backed by strong management support, to identify initiatives that yield productivity improvements,” said Lisa Kohl, sector vice president of Operations for Northrop Grumman’s Integrated Systems sector. “Northrop Grumman remains committed to the use of tools such as Value Engineering, Six Sigma and Lean to continue improving the way we do business.”

The changes implemented by Northrop Grumman, which achieved a significant reduction in costs over a six-year period, were implemented across the board in areas such as business management, engineering, manufacturing, contracts, program management and supplier management.