“There are a lot of things to be determined and negotiated as a final decision has not been made,” Cummings said. A decision on the competition is scheduled for this month.
Raytheon and Alliant Techsystems are the sole bidders in the winner-take-all competition, the value of which may drop to about $250 million from an original estimate of more than $1 billion, according to Cummings. Defense Secretary Robert Gates is seeking savings of $100 billion over five years, and the Army wants to save about $10 billion through 2016.
Raytheon, based in Waltham, Massachusetts, and Alliant Techsystems, based in Minneapolis, are the sole bidders.
The weapon has proven to be the Army’s most accurate shell and has minimized civilian casualties and accidental military deaths during its initial use in Afghanistan and Iraq, the Pentagon’s testing office said this year.
Alliant Techsystems, based in Minneapolis, looks “forward to completing the competition,” Bryce Hallowell, a spokesman, said in an e-mail. John Patterson, a spokesman for Raytheon Missile Systems, had no comment on the proposed cut.
Raytheon, based in Waltham, Massachusetts, began producing the shells in 2007.
Each Excalibur currently costs $102,000. The Army is seeking a price of $47,400, said Audra Calloway, a spokeswoman.
The service is looking at a precision guidance kit that can be placed on existing shells for about $600 apiece, he said. That would be less accurate than the Excalibur, he said.
The Army is “performing a critical analysis of all requirements to ensure all capabilities regardless of performance and cost are indeed needed,” Cummings said.