Court Asked to Overturn Stealth Ruling

The Justice Department asked a federal appeals court to overturn a court ruling that General Dynamics Corp. and Boeing Co. should keep $3.8 billion for the termination of a contract for the Navy A-12 stealth attack aircraft.

The department, in a 50-page document filed late Monday with a three-judge appeals panel in Washington, argued that the companies aren’t entitled to most of the money because they did a poor job of attempting to build the A-12, knew it couldn’t be delivered on time or within budget, and sought “extraordinary” relief from key contract provisions because they faced default.

The court case, one of the largest contractual disputes in U.S. history, stems from then-Defense Secretary Dick Cheney’s decision in 1991 to terminate the contract.

The companies sued, saying Cheney’s action violated contractual due process.

Federal Court of Claims Judge Robert Hodges ruled Feb. 20 in favor of the companies.