Contractors Owe Government $2.8 Billion
It was supposed to be a stealthy, aircraft carrier-based attack jet. Instead, it turned out merely to be yet another late, over-budget project that never really got off the ground.
The Navy terminated the A-12 progam in 1991 and then did battle in court with the contractors, McDonnell Douglas and General Dynamics, for 18 years. The contractors challenged the cancellation, saying it was unjustified.
Finally, the courts have made a final ruling. The Navy won, according to the Justice Department.
"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."
Here's where the money part comes:
"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."
That's a lot of interest.
By Robert O'Harrow |
June 2, 2009; 4:23 PM ET
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