Boeing, General Dynamics Win Appeal in Bomber Case

A federal appeals court Monday overturned a ruling that could have allowed the government to collect damages from Boeing Co. and General Dynamics Corp. for a Navy bomber program scrapped in 1991, and sent the parties back to court.

The Court of Appeals for the Federal Circuit in Washington also affirmed a December decision that blocked the Defense Department from collecting $2.3 billion it claims the two companies owe for the program.

The companies and the government had hoped the appeals court would finally settle more than a decade of litigation about the $4.8-billion radar-evading A-12 bomber, canceled for cost overruns and nonperformance in 1991 by then-Defense Secretary Dick Cheney.

But the court said it lacked a complete record to finally decide the case, since the Court of Federal Claims had not adequately determined whether the Navy justifiably terminated the contract.

The claims court had focused in its ruling on a December 1991 “first flight” deadline missed by the contractors, declining to look at other factors, including the contractors’ alleged cost overruns and other problems, the appeals court said.

“Accordingly, we have no choice but to vacate the trial court’s judgment and remand for further proceedings,” the court wrote in its decision.

The Defense Department had no immediate comment on the decision, which means the parties will be back in court to argue the merits of the termination of the contract.

Falls Church, Va.-based General Dynamics declined to comment. “We have just received the decision, and until we’ve had an opportunity to review it, it would be inappropriate to comment,” spokesman Kendell Pease said.

Officials at Chicago-based Boeing said they were reviewing the decision as well and had no immediate comment.

The decision represents the latest twist in a lengthy saga, with both sides winning decisions in the often bitter dispute.