Lockheed Beats Raytheon, Boeing to Retain Aegis Systems Work

Lockheed Martin Corp. (LMT), the world’s biggest defense contractor, beat Boeing Co. (BA) and Raytheon Co. (RTN), to retain its role as primary systems engineer for the Navy’s Aegis weapons system, the Pentagon said today.

For the short-term, Lockheed Martin’s Moorestown, New Jersey-based Mission Systems and Training unit received a cost- plus incentive fee contract valued at as much as $100 million, of which $2.9 million will be obligated today, the Pentagon said in its daily list of contracts.

The Aegis program is the U.S. Navy’s primary system for detecting and intercepting threats to surface ships. Chicago- based Boeing and Raytheon, based in Waltham, Massachusetts, submitted bids in 2011.

Lockheed, based in Bethesda, Maryland, will modernize the current system and maintain it on future CG 47-class cruisers and DDG-51-class destroyers and any new Aegis class ship, the Pentagon said.

A victory by Boeing or Raytheon to become the new systems integrator would have broken a 40-year lock on the program by Lockheed and predecessors, according to the Congressional Research Service. Several companies that were acquired by Lockheed inherited the contract since the 1970s through mergers and acquisitions.

Scott Day, a spokesman for Boeing Strategic Missile & Defense Systems, said in an e-mailed statement that while the decision “is a disappointment, we remain committed to supporting the U.S. Navy’s ballistic defense mission,” he said.

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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