General Dynamics Appeals $4 Billion Contract Decision

FALLS CHURCH, Va. (AP) -- General Dynamics Corp. will petition the U.S. Supreme Court for a review of its long-running dispute over the cancellation of a $4 billion Navy contract for a stealth aircraft.

The defense contractor said late Tuesday it lost another round when the U.S. Court of Appeals for the Federal Circuit denied a request for a rehearing of the Federal Circuit's decision in June backing the government's termination of the A-12 aircraft contract.

The U.S. Court of Appeals for the Federal Circuit ruled June 2 that General Dynamics and Boeing Co. must pay the government $2.8 billion to settle the dispute. The court said the Navy was justified in 1991 when it terminated the $4 billion contract with McDonnell Douglas and General Dynamics to build a stealth aircraft.

General Dynamics said it disagrees with the most recent decision and "continues to believe that the government's default termination was not justified."

The company said the ruling provides significant grounds for appeal.