Contractors Defaulted on Navy Aircraft Contract

     (CN) – The government had good reason to nix a multibillion-dollar contract for the development of a stealth aircraft for the Navy after contractors missed several key deadlines, including the first flight date, the Federal Circuit ruled.

     The Navy awarded the contract to General Dynamics Corp. and McDonnell Douglas Corp. in 1988. The companies agreed to develop a carrier-based stealth aircraft, the A-12 Avenger, and were given a ceiling price of more than $4.77 billion.
     “From the start, the contractors encountered difficulties in performing the contract, including meeting the contract schedule and keeping the aircraft weight within specification,” Judge Michel explained.
     The first flight date was pushed back from June 1990 to as late as September 1991, and contractors said they expected the rest of the contract work to be delayed by a year or more. They also predicted cost overruns that would purportedly make the price ceiling “unacceptable,” and proposed modifying that part of the contract.
     The Navy pulled the plug in January 1991, citing the contractors’ “unsatisfactory” performance.
     The Federal Circuit affirmed a ruling for the government in the Court of Federal Claims. A three-judge panel said the government presented enough evidence to justify its termination of the contract, but the contractors failed to come up with a legitimate excuse for the delays.

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