The US Navy has terminated a contract with McDonnell Douglas and General Dynamics for the A-12 stealth attack aircraft, it was confirmed by the US Court of Appeals for the Federal Circuit.
The companies received the $4bn award in 1988 for the development of the A-12 Navy fighter-bomber.
The programme met with major technical difficulties and the Department of Defense refused to approve extra funding for the programme in 1991, effecting the termination of contract.
According to the decision, the contractors have to refund the government more than $1.35bn plus the accrued interest since 1991 – a total of approximately $2.8bn.
Following 18 years of judicial proceedings, the contractors have objected to the termination, and the recent appeal was also judged unacceptable confirming the 2007 judgment of the Court of Federal Claims that the navy had properly terminated the contract for default.
US Department of Justice civil division assistant attorney general Tony West said that the decision also represents a critical step toward bringing this long litigation to an end.