Boeing and General Dynamics (GD) are to appeal against a court ruling that reversed their previous victories in the decade-long lawsuit over the 1991 cancellation of the US Navy's stealthy A-12 attack aircraft.

If their appeal is unsuccessful, the companies will have to repay almost $2.3 billion to the US Department of Defense (DoD). In the 31 August ruling, a US federal claims court judge ruled the US Navy had a legitimate basis for terminating the $4.4 billion A-12 development contract.

The same judge had previously ruled the DoD had improperly terminated the contract, and directed the government to reimburse the contractors more than $2.1 billion for work performed but not paid for. The A-12 programme was cancelled in January 1991 after the USNavy determined that the team of McDonnell Douglas (now Boeing) and GD would not meet a revised schedule calling for the first flight in December 1991.

The programme was also overbudget and the aircraft overweight. The termination for contractor default, rather than government convenience, required the companies to repay funding received.

Boeing says it would have to take a pre-tax charge of $1.4 billion to cover its share of the settlement if the appeal fails.

GD says it would have to take a $1.1 billion charge to cover its share. GD's Fort Worth, Texas, division, where its A-12 work was performed, was acquired by Lockheed Martin in December 1992, but liability for the programme was not transferred.

Source: Flight International