Navy Cancels Contract for Attack Planes

DEFENSE Secretary Richard Cheney has canceled the troubled A-12 attack plane program, believed to be the biggest US weapons contract ever terminated. In doing so Jan. 7, Mr. Cheney rejected a Navy plan to rescue the multibillion-dollar project by sharing some of the cost overruns with the two contractors and by buying fewer of the proposed bombers over a longer period.

In explaining his decision to terminate the contract, Cheney said: ``No one can tell me exactly how much more it will cost to keep this program going. And I do not believe that a bailout is in the national interest. If we cannot spend the taxpayers' money wisely, we will not spend it.''

The two defense contractors, General Dynamics Corporation and McDonnell Douglas Corporation, said they would lay off about 8,000 workers who are assigned to the A-12 project. Both firms vowed to contest the Cheney's surprise decision.

General Dymanics and McDonnell Douglas were to develop, build, and deliver 620 of the carrier-based bombers over a period of about 18 years for more than $60 billion. As of Jan 7, the program was already more than 18 months behind schedule and as much as 80 percent over its developmental budget.

The cancellation, which Cheney spokesman Pete Williams told reporters was the biggest ever by the Pentagon, left a major question mark over the Navy's hopes of quickly replacing its 1960-vintage, carrier-based A-6 Intruder attack jets now based in the Persian Gulf.