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NAVY REPORTS GOVERNMENT, CONTRACTORS AGREE TO PURSUE A-12 SETTLEMENT NEGOTIATIONS

 FALLS CHURCH, Va., Dec. 15 /PRNewswire/ -- General Dynamics Corporation (NYSE: GD) described as positive and appropriate today the U.S. government's agreement to pursue negotiations toward settlement of the A-12 termination dispute in conjunction with the Navy's decision to continue its A-12 claim deferment.
 "From the outset of this dispute, we have maintained that the A-12 program should not have been terminated for default' and that the contractors, rather than owing money to the government, are still owed money by the government," General Dynamics said in response to the Navy's announcement of its decision last night.
 The Navy said that "in the best interest of the government" the deferment of its claim against A-12 contractors General Dynamics and McDonnell Douglas will stand, subject to a new review in December 1993, and added: "The government and the contractors have agreed to pursue settlement negotiations as a possible alternative to extended and expensive litigation."
 "The Navy's announcement was positive and appropriate," General Dynamics said. "The companies have challenged the Navy's claim and have filed suit in the U.S. Claims Court to establish that the termination for default' was improper and that the termination in reality was for convenience' of the government.
 "We feel strongly that our position in this litigation will prevail and that the court will determine the companies were not in default of the contract. However, we stand ready to work expeditiously with the government to pursue a settlement that will avoid protracted litigation that will be costly to the government as well as the contractors."
 -0- 12/15/92
 /CONTACT: Alvin A. Spivak of General Dynamics, 703-876-3190/
 (GD)


CO: General Dynamics Corporation ST: Virginia IN: ARO SU:

TW -- DC014 -- 7228 12/15/92 13:06 EST
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Publication:PR Newswire
Date:Dec 15, 1992
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