Blast from the past…old funding dies hard

This article caught my attention mainly because I hadn’t heard much about the court battles on terminating funding for the A-12 because I thought it was done. But the inability of DOD to submit documentation that might justify that the A-12 was not viable due to classified and secret information and specs made an impression on me as a catch-22 of funding for non-viable projects…making it horribly difficult to ‘learn from mistakes’ so to speak.

Here is a response from ilsm to my sending him the link:

Dan,

The A-12 a blast from the past!

I believe the Supreme Court last year decided the Navy/US Government would not be paid back “progress payments” paid prior to the termination of the A-12 sometime in the early 1990’s. Here is an article form Feb 1999 about the case as it stood then, it kept going until 2010!

http://www.usni.org/magazines/proceedings/1999-02/12-legacy-it-wasnt-airplane-it-was-train-wreck

I had read the linked article years ago and am surprised to find it. In the past 8 or so years I have only kept up with the A-12 headlines, when I saw them. The A-12 was a stealthy fighter concept, a carrier based version much different [of course] to the already retired F-117. Purportedly, the free world depends on things like the A-12.

The interesting issue to me is why then Sec Def Cheney terminated the contract for “convenience”, a termination used when the service decides it does not need the equipment. The Navy’s acquisition approach was to have Mc Donald Douglas (now owned by Boeing) build 12 of the A-12’s for test and evaluation. The technology was risky and the specifications challenging, for example they had to keep the weight under 80,000 pounds which was the limits of the elevators on aircraft carriers and likely a big deal to beef them up (maybe the decks cannot handle the load of the landings either).

I am neither an expert in stealth nor an expert in aircraft carriers, mostly Air Force. The contract type for this risky development was “fixed price”, which means Mc Donald Douglas signed up to deliver the 12 airplanes at a specification at a set time and contract price. In order words the contractors assumed al the risk.

As it happens today, and then Mc Donald Douglas promised to “name the song in 5 notes”, but needed about 20 special notes not on contract, they kept the Navy at bay, who would have done some insider contracting “magic” to raise the price until a contract auditor discovered the A-12 would not get any airplanes in the time and money Mc Donald Douglas had entered into the contract to deliver.

  George HW Bush was president and his advisors had some interest in cutting DoD spending [FY 91 spending had declined to 475B from 553B in 1989 a decline which was disrupted by the first Gulf war, but hit $400B in 2011 dollars in 1999] and finding new ways to do acquisition which was as much a mess as today.

So, through a fair amount of trading and evading it was decided to terminate for convenience. The better termination was for default, and I do not know why Cheney directed the type of termination, nor why a Navy contracting authority would not set him straight.

Cheney could have done three things, one being convenience. He could have terminated for “default”, which they were doing, or he could have called Mc Donald Douglas in and said: “a contract is a bond, do the job [which is impossible given the traditional ineptitude of defense contractors]. The point in Fensler’s article, which is valid today, is that the Navy needed Mc Donald Douglas and would have (without the publicity) kept shoveling good money after bad for  the A-12, (like the AF did F-22 and now F-35). The good thing is despite the fact the government does not get its progress payments back, the Navy has not been saddled for twenty years and likely $200B in costs to try and make the A-12 fly, a burden the USAF has successfully held up so their generals could have good jobs…

… Bottom line from the Supremes: the military industrial complex does not get real contracts, as in common law, they get paid whether they meet their promises or not.