Wed, Jun 03, 2009
A-12 Stealth Attack Aircraft Contract Killed in 1988
The US Court of
Appeals for the Federal Circuit has affirmed a judgment upholding
the Navy's termination for default of a contract with McDonnell
Douglas and General Dynamics for the A-12 stealth attack aircraft,
the Justice Department announced Tuesday.
In 1988, the Navy awarded the $4 billion fixed-price contract
for development of the A-12, which was to be a stealthy,
carrier-based attack aircraft. The program encountered serious
technical difficulties, and in 1991, after the Department of
Defense refused to approve additional funding for the program, the
Navy terminated the contract because it was substantially over
budget and behind schedule.
The contractors challenged the termination, resulting in 18
years of litigation. On appeal for the third time on June 2, 2009,
the court of appeals affirmed the 2007 judgment of Court of Federal
Claims Judge Robert B. Hodges Jr., holding that the Navy had
properly terminated the contract for default. In a 29-page opinion,
the court of appeals explained that the termination decision was
justified under the parties' contract because the contractors'
performance history demonstrated that "the government was
justifiably insecure about the contract's timely completion" and
there was no excuse for the contractors' failure to make progress
toward completion of the contract.
"We are gratified by
the appellate court's decision upholding the Navy's decision to
protect the public fisc by terminating the A-12 contract for
default," said Tony West, Assistant Attorney General for the
Justice Department's Civil Division.
"Today's decision also represents a critical step toward
bringing this long litigation to an end."
Under the decision, the contractors are required to repay the
government more than $1.35 billion in principle funds advanced
under the contract, plus interest accruing since 1991, for a total
sum that currently approaches $2.8 billion.
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