T-45A Aircraft

United States

McDonnell Douglas recovered more than US$200 million from Federal Government over U.S. Navy contract dispute

 

 

Brief

McDonnell Douglas signed a full-scale engineering and development contract with the US Navy to design, test, and manufacture the T-45A aircraft – a carrier-suitable version of the British Royal Air Force Hawk T1 jet trainer. As the project matured, the Navy ordered a series of modifications to the base contract design, resulting in significant project delays and cost increases for McDonnell Douglas. The contractor sought to recover these increased costs and filed a claim with the Navy, which the Navy rejected. McDonnell Douglas appealed the Navy’s decision before the Armed Services Board of Contract Appeals.

What we did

HKA was retained by counsel for McDonnell Douglas to assist with developing a detailed claim and its supporting materials. HKA provided an in-depth analysis of company records to reconstruct job costs. We also thoroughly evaluated program performance activities to determine the durations and causes of delays to both the testing and manufacturing schedules. The relevant schedule delays were then used to calculate McDonnell Douglas’ increased costs due to extended overhead, prolonged test support, sustained engineering, and other activities impacted by the delays attributable to the Navy.

Outcomes

In an agreement described as “fair and equitable” by McDonnell Douglas, further litigation was averted, and a settlement was reached with McDonnell Douglas recovering more than US$200 million in costs. The expert analysis and the communication of this analysis in an understandable and compelling way by HKA was critical in effecting the outcome of negotiations between McDonnell Douglas and the Navy.

Project Details
  • Client
    McDonnell Douglas (now Boeing)
  • Value
    US$200 million
  • Services
    Expert, Government Contracts
  • Sectors
    Government Contracts