Very soon, Virginia’s relationship with Northrop Grumman will be coming to an end. One of the world’s largest aerospace and defense technology companies will now shift focus from its sprawling operations center in Chesterfield County to a courthouse in downtown Richmond as the era of bad feeling winds down to an end.
After being located in Virginia for five gubernatorial terms, as the Richmond Times-Dispatch put it, “A match made in hell: Married under Warner, estranged under Kaine, reconciled under McDonnell, separated under McAuliffe, and divorced under Northam.”
This was caused mainly after a deal between Virginia and Northrop Grumman was negotiated where the Commonwealth would pay billions of dollars to the firm to provide IT services. The model of commonwealth-corporate cooperation, however, quickly spun out of control.
The deal got off to a shaky start under Governor Mark Warner, who did a less-then-stellar job selling the idea to the legislature, all of whom are accountable to taxpayers. State agencies, accountable to lawmakers, did not enjoy the idea of relinquishing control of their IT systems. Northrop Grumman, accountable to its shareholders, was not going to surrender profits.
Originally, Warner believed it made sense for the public sector to have private sector-run computer networks – being that he made a substantial fortune in the technology industry.
His successor, Tim Kaine, considering all he wants is for everyone to agree and get along with each other, used his administration to keep Northrop Grumman and VITA (Virginia Information Technologies Agency) from clashing.
Bob McDonnell figured if the state paid Northrop Grumman a lot more, the company would complain a lot less.
Since he fancies himself as crafty deal-maker, Terry McAuliffe said that his predecessors agreed to bad terms with the Northrop Grumman deal and it was better to divvy the contract among multiple firms.
Ralph Northam, because his job includes cleaning up McAuliffe’s aftermath and finishing the things he started – like Medicaid expansion- just wants to put this massive public-private headache in the past.
Although it won’t come easy, after 13 years and $2.4 billion, the Northrop Grumman-VITA relationship will break up on August 17. Attorneys for both parties will battle in Richmond Circuit Court proceedings over how to undo the Northrop Grumman contract and whether taxpayers will be on the hook for millions of dollars in penalties.
