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A-12 Litigation May Be Coming to an End

It was 1991 when the Pentagon canceled a $4.8 billion program to build a stealth aircraft for the US Navy called the A-12, a decision prompted by fears the plane would take too long to produce and become far too expensive.

The aircraft, under development by General Dynamics and McDonnell Douglas, was never built and never flown, but lawsuits brought by GD and McDonnell Douglas — subsequently acquired by Boeing — protesting the government’s decision took on a life of their own. The government wanted a good chunk of money to be returned, the companies demurred, and lawyers for the corporations and the government have batted around the litigation ever since, fighting it out to the US Supreme Court.

Now it appears the matter finally may be coming to an end, following court decisions against the plaintiffs. Under a deal brokered by negotiators and approved by Congress, each company will pay the equivalent of $198 million to the Navy. In GD’s case, that means providing a credit for most of the deckhouse for the new Zumwalt-class destroyer Lyndon Johnson. In Boeing’s case, three EA-18G Growler electronic warfare aircraft will be provided “at no cost” to the Navy.

Bath Iron Works, a GD subsidiary, received a $212 million contract in August to build the steel deckhouse at its shipyard in Bath, Maine.

The brokered agreement was included as an amendment in the 2014 defense authorization bill, approved by Congress and signed into law last month. The provisions were sponsored by Maine Sens. Susan Collins (R) and Angus King (I).

The legislation was necessary to authorize the Navy to accept the payments, to which neither company is objecting. Motions to dismiss still need to be filed in the US Court of Federal Claims before the case can finally end.

“Passage of this legislation is an important step toward the conclusion of over 20 years of litigation once and for all, on terms acceptable to all involved,” said Boeing spokesman John Dern. This legislation enables the parties to avoid continued litigation, and it offers value to the Navy and to US taxpayers.”

General Dynamics declined to comment, but referred to statements filed in October with the Securities and Exchange Commission describing the proposed agreement. The statements noted that if Congress had not approved the agreement, the corporations would have been liable together for $1.4 billion in progress payments from the original A-12 contract, plus $1.6 billion in interest.

The Navy declined to comment, citing the case as still open. Spokespeople at the Federal Claims court did not respond to requests for information.

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