General Dynamics Corporation and Subsidiaries - Page 23

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          In late October 1983, just 6 months after GENDYN began delivering           
          aircraft under the multiyear contract (2034), cracks began                  
          appearing in a critical structural element of the airframe known            
          as the 446 bulkhead (so designated because it is located 446                
          inches from the nose of the aircraft).  The 446 bulkhead is a               
          large aluminum ring that encircles the aircraft's engine and                
          supports the engine's weight, thrust, and torque.  The 446                  
          bulkhead also bears some of the loads created by the tail wing              
          and the fuel tanks, and the cracks could expand with catastrophic           
          consequences.                                                               
               When the cracks appeared, the Air Force began to inspect the           
          aircraft following every 25 hours of flight time to ensure the              
          cracks had not reached a critical length.  The Air Force issued a           
          notice of deficiency to GENDYN and began withholding progress               
          payments.  After extensive engineering analysis, GENDYN developed           
          a new design for the 446 bulkhead which GENDYN believed would               
          prevent the cracking.  Developing this solution took more than 1            
          year, much longer than GENDYN expected.                                     
               Minor problems in performance were common, and most aircraft           
          delivered to the Air Force under Contract 2034 were accepted with           
          deviations from and waivers of various aspects of the aircraft's            
          specification.  Depending upon the nature and seriousness of the            
          deviation, the Air Force might accept or refuse a nonconforming             
          aircraft.  In some cases, the Air Force would accept the aircraft           
          but withhold some portion of the consideration due GENDYN until             



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