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To: Jorj X Mckie who wrote (15741)	12/8/2002 12:23:56 AM
From: Techplayer	Respond to of 57110

quicken.com Defense Department Seeks $2.3 Billion From General Dynamics, Boeing Tuesday, December 3, 2002 06:38 PM ET Associated Press WASHINGTON -- The Pentagon said Tuesday it will begin collecting $2.3 billion from General Dynamics Corp. (GD, news) and Boeing Co. (BA, news) for what the government considers debt owed on a canceled A-12 stealth aircraft project 11 years ago. Instead of asking the companies to turn over the $2.3 billion, the Pentagon will get the money by withholding about $128 million a month for 18 months on other government contracts held by the companies. General Dynamics said it intends to ask a federal judge to block the government from deducting the $2.3 billion in payments. "The Defense Department's entitlement to any payment in the A-12 matter is central to the issues that court is already scheduled to hear on January 9, 2003," General Dynamics said in a statement. "Accordingly, the company believes DoD's collection effort is inappropriate and that it usurps the jurisdiction of the courts." The A-12 was to be built for the Navy, but in 1991 then-Defense Secretary Dick Cheney canceled the project, citing cost overruns and delays. The contractors and the Pentagon have been in court over the matter ever since. In August 2002 the Navy demanded that General Dynamics and Boeing repay the $ 2.3 billion and said that if they failed to do so, the government would begin collecting the debt. "Because the Department of Defense and the Department of Justice continued to engage in what we had hoped would be productive settlement negotiations with the companies, [the Pentagon] did not begin any collection efforts between August and November," the Pentagon said in a statement. "Since it now appears that an equitable settlement will not be reached in the near term," the Pentagon has decided to start collecting the debt, it added. Copyright 2002 Dow Jones & Company, Inc. All Rights Reserved