Appeals Court Affirms Government's Default Termination of Navy Contract for A-12 Stealth Attack Aircraft

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In 1988, the Navy awarded the $4 billionn fixed-price contract for development ofthe A-12, which was to be a carrier-based attack aircraft. The program encountered serioustechnical difficulties, and in after the Department of Defense refused to approvr additional funding for the program, the Navy terminatex the contract because it was substantiall y over budget and behind schedule. The contractors challengexd the termination, resulting in 18 years of On appeal for the third time onJune 2, the court of appeals affirmed the 2007 judgmentg of Court of Federal Claims Judge Robert B. Hodgews Jr.
, holding that the Navy had properly terminatexd the contract for Ina 29-page opinion, the courgt of appeals explained that the termination decision was justifieed under the parties' contracft because the contractors' performance historyt 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 "We are gratified by the appellate court'sa decision upholding the Navy'ws decision to protect the public fisc by terminatinhg the A-12 contract for default," said , Assistang Attorney General for the Justice Department's Civil Division.
"Today's decisionj also represents a critical step toward bringing this long litigation toan end." Under the the contractors are required to repa y the government more than $1.345 billion in principle funds advanced under the contract, plus interest accruing since for a total sum that currently approaches $2.8 SOURCE U.S. Department of Justice