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 Procurement Debate , defense
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Comments

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What are the chances that the Navy will recover the money?

Posted by: Mustachio | June 2, 2009 4:53 PM

If contractors owe the government 2.8 Billion in refunds on uncompleted contracts they should ask the I.R.S. to collect it for them! They do a good job stripping average citizens of their belongings when they owe them money for back taxes! While we are at it we should estimate the taxes illegals owe and make them pay also! If I owe money to the I.R.S. they are quick to estimate the amount and require payment! I guess they only go after Citizens!

Posted by: Klimax | June 3, 2009 4:50 PM

The people of America deserve better. As a small business and government contractor no agency has ever offered our organization a $1.35 Billion advance for any services we've performed. Please tell us where to sign up! Seriously, the government should use any and all collection methods to recoup and if all else fails those organizations should be debarred from all future federal contracts. These are the types of organizations we compete against on a regular basis due to "contract bundling" but have no chance due to their "financial strength and size". How about leveling the playng field. Continue to strengthen set asides and minority/small business programs, where the majority of America,s jobs are created.

Posted by: wem1 | June 4, 2009 4:30 PM

It's in the mail, trust me.....

Posted by: 65tarheel | June 5, 2009 10:50 AM

Go, Navy, go! Get all those hustlers and con artists to pay taxpayers back for all they stole to deliver trash or nothing at all!

18 years, how sad, but I'm so glad they stuck with it and won. This is why I tell people to have some patience. A simple criminal case can take years. Cases where contractors rob us, or torture prisoners, take twice as long. They're complex, the face costly opposition. But if we are patient, if we don't rush to appease political outcries, we can prepare the prosecution's case to see justice done, in the end.

Posted by: VCubed | June 7, 2009 2:08 AM

In reference to your whine about Gift Cards and the resulting string of comments I take issue with the person who states "interesting article." Sure they jest ! Not something this puerile written by someone so myopic,uninformed,biased and bitter about a Federal sytem he knows nothing about. A number of commentors essentialy said the same thing that I have said repeatedly..O'Harrow is at a serious loss of things to do with his time. He needs to recalibrate and take a very had look at the significance of his topics and the quantity and quality of his outputs and ask himself ..do the readers think that this is stuff is worth the $125K /yr that he is scamming from the Post? O'Harrow is obsessed with kicking around the Federal workers while ignoring the real meat of Contract fraud such as the escapades of Mr. Murtha and his earmarks.I can't imagine the Post will continue to pay for the vapid, uninspiring drivel contained in this Blog.

Posted by: chuckaluk66 | June 8, 2009 11:55 AM

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