Lockheed Martin loses the bid for US Defence Missile System against Boeing Corp.

Call it intuition but the move was on the cards and Boeing wins the bid against Lockheed Martin Corp.

Boeing beat Lockheed to win a $3.48 billion, 7-year contract that lets then keep their role as the primary developer of the U.S. protection program against intercontinental ballistic missiles.

The Missile Defence Agency announced the contract in a statement today. The agency oversees the Ground-based Midcourse Missile Defence, which includes interceptors in Alaska and California, ground and sea-based radar, satellites and a command and control
system.

The Boeing team, which included Northrop Grumman Corp. (NOC) from Falls Church, Virginia, delivered “a cost-effective approach to program management and execution,” Dennis Muilenburg, chief executive of Boeing’s defense unit, said in a statement.

Bethesda, Maryland-based Lockheed, the world’s largest defence contractor, was seeking to let down Boeing from the contract, it has held since 1998 on a sole-source basis. Chicago- based Boeing has said the program has totalled as much as $18 billion during
the 10 years ending 2011.

Lieutenant General Patrick O’Reilly, head of the Missile Defence Agency, said in August 2010, when the agency was preparing to call for bids that it needed to contain costs. “But before we get to cost, bidders have got to demonstrate they’ve the capacity
and capability, and also an ability to do upgrades,” he said.

The government for the first time has announced that the contractors will be held financially responsible for poor-quality parts. The Ground-based Midcourse program had a 53 percent success rate in tests, with two, back-to-back test failures in 2010. In
October, the Missile Defence Agency said a $300 million test failed because of a “guidance error” in the warhead made by Raytheon Co. (RTN) of Waltham, Massachusetts.

Parts defects have affected nearly every major space and missile defence program, causing millions of dollars in cost overruns and many months of schedule delays, Christina Chaplain, an associate director at the U.S. Government Accountability Office who
follows the agency, said in an e-mail.

Lockheed’s team included Raytheon, which makes the non- exploding warhead that is designed to seek and destroy enemy missiles. Raytheon was on both teams.

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Posted by Usman Khalid on Dec 31 2011. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry