Opinion ID: 208635
Heading Depth: 2
Heading Rank: 1

Heading: The A-12 contract

Text: In January 1988, the Navy awarded the contractors a fixed-price research and development contract for the A-12 stealth aircraft. The full-scale engineering and development (FSD) contract was structured as an incrementally funded, fixed-price incentive contract with a ceiling price of $4,777,330,294. The contract incorporated by reference Federal Acquisition Regulation (FAR) 52.249-9 Default provision (Fixed-Price Research and Development), which provides in relevant part: (a)(1) The Government may ... by written Notice of Default to the Contractor, terminate this contract in whole or in part if the Contractor fails to . . . (ii) Prosecute the work so as to endanger performance of this contract (but see paragraph (a)(2) of this clause); . . . (2) The Government's right to terminate this contract under subdivisions (a)(1)(ii) and (iii) of this clause may be exercised if the Contractor does not cure such failure within 10 days (or more, if authorized in writing by the Contracting Officer) after receipt of the notice from the Contracting Officer specifying the failure. 48 C.F.R. § 52.249-9 (1984). Under the contract, the contractors were to design, manufacture, and test eight A-12 prototypes according to a specified schedule, with the first aircraft to be delivered in June 1990 (the first flight date) and the remaining seven to be delivered monthly through January 1991. The contractors were to conclude their testing of the aircraft by April 1993, the completion time of the Navy's technical evaluation program (TCHEVAL). The contractors would also support the Navy's evaluation of the aircraft and further provide training support for three years after delivering training equipment to the Navy in June 1993. In addition, the contract gave the Navy the option to purchase four production lots of aircraft. In May 1990, the Navy exercised its option on Lot I for six aircraft to be delivered between June 1991 and May 1992.