Lockheed Martin to vie for missile defence deal

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Lockheed Martin Corp and Northrop Grumman Corp said they would seek to unseat Boeing from running the core US missile defence system, a potential $200 million (R1610 million) a year deal.
Lockheed Martin, the Pentagon’s No. 1 supplier by sales, is “really pursuing” a shot at operating and sustaining the Ground-based Midcourse Defense, or GMD, said John Holly, the company’s senior executive in Huntsville, Alabama, a hub of efforts to build a layered shield.
“We’ve got the right skills and the capability,” he added at a briefing for reporters on the company’s missile defense programs, which he said accounted for about 10 % of overall Lockheed sales last year.
Lockheed expected missile defense-related sales to amount to roughly the same percentage of global revenues in 2009, said Holly, a retired US Army major general who once served as Missile Defense Agency deputy director.
Northrop Grumman, the Pentagon’s No. 3 supplier by prime contract value, also plans to compete “vigorously” for the GMD contract, Lon Rains, a spokesperson for the company’s Redondo Beach, California-based Aerospace Systems sector, told Reuters.
In February, Boeing, the Pentagon’s No. 2 supplier and the GMD prime contractor, won a one-year $250 million (R2012 million) Missile Defense Agency contract for GMD maintenance and operations support.
Chicago-based Boeing has said it is well positioned to compete and win additional support contracts.
“With our current program, Boeing delivers outstanding performance for the customer, while also applying lean principles to continually improve,” Boeing’s GMD director for operations and sustainment, Terry Kunkel, said in a statement.
“Therefore we believe Boeing is the lowest risk option for the work because of this experience and success on the program.”
Raytheon Co also is “interested in the work,” said Anne Marie Squeo, a spokeswoman, adding she could not go any further about the matter now.
The MDA has announced it will seek competitive bids for future GMD operations in line with a trend toward broader competition for missile-defense and other pricey U.S. weapons programs.
“I foresee much more competition” for missile defense work, Army Lieutenant General Patrick O’Reilly, head of the Missile Defense Agency, told a group of Reuters editors and reporters in July.
“As long as I am satisfied that there are other companies out there that can do similar work at the same level of competency, I’m bound by law to compete those contracts” under the Weapons Systems Acquisition Reform Act, a revamped procurement approach signed into law by President Obama in May, O’Reilly added.
GMD is the hub of a layered, multibillion-dollar US bulwark against ballistic missiles that could carry chemical, biological or nuclear warheads. The system was deployed by then-president George W. Bush in 2004.
The Missile Defense Agency is planning to put out a draft request for proposals on the GMD work soon and a final one at the end of this year or in early 2010. It is expected to award a contract around Oct. 2010, Douglas Graham, another Lockheed missile-defense executive, told the briefing.
A spokesperson for the Pentagon agency did not immediately return a call seeking comment.
Lockheed executives said MDA was seeking a “performance- based” logistics approach to sustaining GMD, the sole US defense against long-range ballistic missiles.
Performance-based logistics involves payment for a specified service without paying for individual parts, spreading the risk from government to industry and giving a contractor an incentive to reach an agreed threshold.
“Who’s won the DoD performance-based logistics award for the past three of the last four years,” Holly asked rhetorically. “They were Lockheed Martin programs.”
“So we’ve got tremendous capability when it comes to (performance-based logistics) that we can directly apply here.”
Graham, a vice president for advanced missile-defense programs, added that Lockheed sees this as a growth market and “an area of growing importance to us.”

Pic: Lockheed Martin logo