GD Says It Will Petition SCOTUS

The U.S. Court of Appeals for the Federal Circuit denied a request for a rehearing of the Federal Circuit's prior decision sustaining the government's default termination of the A-12 aircraft contract on Tuesday. General Dynamics and Boeing were parties to the contract with the Navy.

General Dynamics disagrees with this most recent decision and continues to believe that the government's default termination was not justified. The company also believes that the ruling provides significant grounds for appeal, and intends to petition the U.S. Supreme Court for review.

In 1988, the Navy awarded the $4.8 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.

On appeal for the third time, the court of appeals on June 2, 2009 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.

Under the decision, the contractors are required to repay the government more than $1.35 billion in principal for funds advanced under the contract, plus interest accruing since 1991, for a total sum that currently approaches $2.8 billion.

FMI: www.generaldynamics.com, www.navy.mil