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Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Cancellation of A-12 Program

In 1988, the U.S. Navy awarded a $4 billion fixed-price contract to McDonnell Douglas (acquired by Boeing in 1997) and General Dynamics for development of the A-12 stealth attack aircraft. The program encountered serious technical difficulties, running substantially over budget and behind schedule. In 1991, after the Department of Defense refused additional funding, the Navy terminated the contract due to the contractors’ default. The contractors challenged the termination in federal court. In June 2009, the U.S. Court of Appeals for the Federal Circuit affirmed the Navy’s termination, holding that the termination decision was justified due to “the contractors’ performance history (e.g., the failure to meet several milestones, including the significant first flight), coupled with the contractors’ dire financial difficulty, which negatively impacted their performance under the contract.” The appeals court decision required the contractors 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 of approximately $2.8 billion. In May 2011, the U.S. Supreme Court overturned the appeals court and remanded the case for further proceedings. In January 2014, it was announced that Boeing, General Dynamics, and the government agreed to a settlement in which both companies each agreed to provide aircraft and services to the military valued at $200 million. General Dynamics agreed to provide a credit against a contract to build the DDG-1002 guided missile destroyer, and Boeing agreed to provide three EA-18G aircraft and a credit for converting the existing multi-year contract to a firm-fixed price contract.

Misconduct Type
Poor Contract Performance
Enforcement Agency
Defense – Navy
Contracting Party
Defense - Navy
Court Type
Civil
Disposition
Settlement
Date of Settlement Announcement
1/23/2014
Contractors Involved Penalty
Total
Boeing Company $200,000,000
General Dynamics $200,000,000
Further Information Released
DOJ Press Release (Jan. 2014) 1/29/2014

Federal Contractor Misconduct Database