A long running lawsuit sparked by the 1991 cancellation of the US Navy's General Dynamics/McDonnell Douglas A-12 stealthy attack aircraft has advanced a step, with a US court ruling in favour of the contractors and the US Government immediately filing an appeal.
In its final ruling on 20 February, the US Court of Federal Claims awarded General Dynamics and Boeing (formerly McDonnell Douglas) an extra $1.2 billion in damages, plus interest, after determining that the A-12 contract was improperly terminated. Over budget and behind schedule, the fixed price development contract was cancelled in January 1991, before delivery of a prototype.
The contract was terminated for default "because the contractors were unwilling or unable to perform the contract and admitted as much to the Navy", says the US Department of Defense. The contractors filed a lawsuit in June 1991, seeking to convert the termination to one "for the convenience of the Government", enabling them to obtain payment for work done and costs incurred, Boeing says.
"The A-12 contract was not terminated because of contractor default. The contract was terminated because the Office of the Secretary of Defense withdrew support and funding for the A-12," says General Dynamics. Both companies wrote off their losses in 1990. The damages will "more than offset" Boeing's loss provision, but only "partially offset" that of General Dynamics.
Source: Flight International