WASHINGTON — Lockheed Martin’s decades of dominance as the single primary supplier for the Aegis combat system are officially over now that the company has dropped its protest of the US Navy’s decision to award Raytheon a contract to build a new radar for the system.
“Lockheed Martin protested the Navy’s award of the Air and Missile Defense Radar (AMDR) contract because we believed the merits of our offering were not properly considered during the evaluation process,” spokesman Keith Little said Jan. 10. “While we believe that we put forward an industry-leading solution, after receiving additional information we have determined it’s in the best interest of the Navy and Lockheed Martin to withdraw our protest.”
Lockheed and Raytheon, along with Northrop Grumman, had been in a fierce contest for the AMDR, which is to be installed in new Aegis destroyers and cruisers starting in 2016. The Navy’s choice of Raytheon, announced Oct. 10, stunned Lockheed, which has had a lock on the valuable Aegis franchise since the system was developed starting in the late 1970s. Sources said Northrop Grumman — which, according to the Navy, also made a very credible run in the competition — was also annoyed, having seen Lockheed as the frontrunner.
Lockheed last year beat off competition from Raytheon and Boeing to take over management of the Aegis system. The Combat System Engineering Agent contract awarded March 4 gave the company management rights over Aegis through May 2018, when the Navy will award another five-year contract.
Raytheon, as a subcontractor, already produces key components of the Aegis system. The company also makes the Standard surface-to-air missiles that equip all Aegis cruisers and destroyers.
Under the AMDR award, Raytheon will receive up to $1.63 billion to develop, test and deliver the new radar, which will replace SPY-1 radars in new Aegis ships. The initial contract announced Oct. 10 is a $385.7 million cost-plus-incentive-fee contract, using $157 million in fiscal 2013 funding already appropriated. The Navy is asking for $240 million in AMDR research-and-development funding in the 2014 budget request, still to be approved by Congress.
“We are ready to move forward with the engineering and manufacturing development phase of the AMDR,” Cmdr. Thurraya Kent, a spokeswoman at the Pentagon, said Jan. 10. “We look forward to continuing our work with industry to bring this much-needed next generation capability to the war fighter.”
The Navy is anxious to get going on AMDR development. The radar is set to be installed on the second of two DDG 51 Arleigh Burke-class destroyers scheduled to be ordered in 2016. Current destroyers are designed to the Flight IIA standard; the AMDR will mark the beginning of Flight III construction.
The protest has not delayed production, Kent said.
“In accordance with the applicable regulations, the contracting officer suspended performance of the AMDR contract pending resolution of the protest,” she said. “The contracting officer planned for potential changes in the AMDR award schedule, so at this time, there is no immediate impact on the delivery date or schedule.”
Raytheon said it’s ready to go.
“The Raytheon team and its plans are in place, ready to move forward on the program,” spokeswoman Carolyn Beaudry said Jan. 10. “Our focus is now dedicated to delivering this critical AMDR capability to the Navy.”