The A-12 is the poster child for a failed defense program.

Don’t take our word for it. Read this article written by Herb Fenster, Esq. and published in 1999 in the U.S. Naval Institute’s Proceedings. It’s called: “The A-12 Legacy: It Wasn’t an Airplane—It Was a Trainwreck.” It’s really a very important set of observations regarding how the Navy put General Dynamics and McDonnell Douglas into the firm, fixed-price, mess they found themselves in, and the implications of Secretary of Defense Dick Cheney’s program Termination for Default, which lasted through multiple rounds of litigation starting in roughly 1992 and lasting through until very recently. Even the Supreme Court of the United States weighed-in on the never-ending litigation circus.

Mr. Fenster summed up the situation in a footnote, as follows—

Eleanor Spector was DoD's most knowledgeable procurement executive. She had the additional advantage of having spent several years at NavAir. She later revealed what knowledgeable procurement people all know: A program such as this to produce a new highly sophisticated aircraft, incorporating unproven technologies to accomplish unproven mission objectives presented huge risks. She also had the advantage of having been advised of these risks by Brigadier General Keith Glenn, U.S. Air Force, who had been the B-2 program director and was then functioning as the special access programs director for DoD. He had told her, in unequivocal terms, that the program was far too risky for fixed-price contracting.

In another article published in Air Force Magazine just after the program was terminated, author David Montgomery wrote—

The Secretary's summary execution of the A-12 abruptly ended the saga of a plane that, six months earlier, enjoyed broad congressional support and appeared problem-free. The stealthy, carrier-based attack plane had been naval aviation's top priority since 1984. What caused it to nosedive from preeminence to oblivion?

Investigators and officials place the blame on four factors: 

• Overly protective Navy officials, who didn't want to endanger the plane by pointing out problems. A Pentagon analyst first detected a possible cost overrun two years ago, but the Navy program manager continued to describe the A-12 as being on track until after a major Pentagon review last year.
• A ‘don't-rock-the-boat’ segment of the Pentagon bureaucracy, which was aware of the problems but apparently reluctant to buck its superiors to press its case. In one incident, a report noting A-12 problems was tucked away and forgotten.
• Overly optimistic A-12 contractors, who miscalculated the extent of the technical difficulties in producing such a plane and shielded the problems from the government. An inquiry by Navy Deputy General Counsel Chester Paul Beach found that General Dynamics and McDonnell Douglas discovered "increasing cost and schedule variances" but did not alert the Navy in a timely fashion.
• Excessive secrecy, which blanketed the project and prevented examinations that might have brought problems to light. Officials assigned to Secretaries Cheney and Garrett were kept away, standard reporting procedures were abandoned, and information was transmitted verbally rather than in writing.

One important outcome of the A-12 debacle was a critical look at the Earned Value reporting metrics used by the program, which eventually led to a reinvention of EVMS in the early 2000’s. Another important outcome was the recognition that use of cost-based progress payments didn’t reward contractors for making progress; instead, they rewarded contractors for spending money. That recognition led to the creation of Performance-Based Payments in the late 1990’s, which are still considered to be the Federal government’s “preferred” contract financing option, despite Shay Assad’s direction to walk away from their use.

But although there were some positive outcomes, they did not outshine the problems with the program and its termination, much like a silver lining fails to outshine the dark clouds accumulated over 23 years of constant litigation.

The parties finally reached a settlement a week ago, as reported by Reuters. At one point, the government wanted the contractors to repay about $1.5 Billion each, and the contractors wanted to keep their progress payments plus get another $1 Billion plus interest.

Reuters reported that the contractors will not have to repay their progress payments, but the government will not have to pay anything more. In addition, “the Navy will receive three EA-18G electronic attack aircraft from Boeing, and a $200 million credit from General Dynamics toward its work on a new DDG-1000 destroyer.”

So that’s it then.

Our long national nightmare is over.

The multitude of attorneys involved in the legal battles can get back to other clients.

And the Navy will make do with its F-35 variant.