Management Accounting Case Book

The A-12 Stealth Bomber: Escalating Commitment to a Failing Project

David S. Christensen and Robin Boneck, Southern Utah University

THE A-12 WAS THE NAVY’S TOP AVIATION PRIORITY. The carrier-based stealth bomber was designed to replace the aging and crippled A-6 Intruder. In 1991 the program was cancelled due to cost overruns, schedule delays, technical problems, and a culture that suppressed bad news about the A-12 from Congress. To increase moral awareness, students are required to reflect, write about, and discuss the facts and moral implications of an ethical dilemma experienced by a cost analyst whose cost estimate about the A-12 was suppressed by supervisors in her chain of command.

Students use the IMA^® Statement of Ethical Professional Practice as a framework to explore applicable values, standards, and actions. The case is designed for a graduate cost accounting course for both MBA and accounting students.

Keywords: moral awareness, ethics, values, escalation of commitment.

The A-12 Stealth Bomber: Escalating Commitment to a Failing Project

David S. ChristensenSouthern Utah University

Robin BoneckSouthern Utah University

INTRODUCTION

On January 7, 1991, Defense Secretary Richard Cheney announced that the Navy’s A-12 stealth bomber project was terminated, citing severe schedule, cost, and performance problems as the reasons. It was the largest weapons system contract cancellation in the history of the Pentagon. In cancelling the program, a result of an investigative ...