Boeing and General Dynamics are to appeal the latest ruling in the long-running lawsuit over the US Navy’s 1991 termination of the contract for the A-12 stealth attack aircraft.

The US Court of Federal Claims last week upheld the Navy’s decision to terminate the A-12 contract for default, requiring the contractors to return progress payments of about $1.35 billion – a sum that now exceeds $2.6 billion including interest.

McDonnell Douglas (now Boeing) and General Dynamics were awarded a $4 billion fixed-price contract in 1988 to develop the A-12 Avenger II Advanced Tactical Aircraft, a stealthy replacement for the carrier-based Grumman A-6 Intruder.

 A-12 mockup
 The A-12 Avenger II mockup

In January 1991, then defence secretary Dick Cheney cancelled the A-12 because it was substantially over budget and behind schedule. The contractors challenged the default termination, launching a lawsuit that has rumbled on for 16 years.

The court originally ruled against the government, finding Cheney had wrongfully cancelled the A-12, and ordered the termination converted to “for convenience” and the contractors to be paid $1.2 billion for work in progress at the time of cancellation.

 A-12 sim
  The A-12 simulator visual system

Following two appeals, the court held the Navy had properly terminated the contract for default because the contractors had missed the originally required first flight date of June 1990 and were not going to meet the revised target of December 1991.

More than $2 billion was spent, and the A-12 never flew, but Boeing and General Dynamics continue to argue that the default termination was not justified and that the US government owes them money for work performed on the programme.

Cancellation of the A-12 had massive consequences for US naval aviation. The A-6 was retired without being replaced and the Navy still has no low-observable aircraft on its carrier decks, while the US Air Force is on its third generation of stealth.

In the wake of the A-12 cancellation, the Navy focused on the low-risk development of the Boeing F/A-18E/F Super Hornet, which was completed on schedule and under budget. The Hornet series is now the only strike aircraft on US carrier decks.

The “first day of war” attack role originally envisioned for the flying-wing A-12 is now planned to be performed by the F-35C carrier version of the Lockheed Martin Joint Strike Fighter, which is not scheduled to be operational until 2015.