Lockheed seeks lucrative Boeing missile-defense job

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Lockheed Martin Corp is aiming to unseat Boeing Co for a potential 10-year, $6 billion deal and to take responsibility for the US strategic missile shield.

"Lockheed Martin welcomes the opportunity to apply our talent and experience to a broader set of requirements for this important missile defense system," retired Army Major General John Holly, a Lockheed vice president for missile defense, said in a statement earlier this week.

The statement followed a Pentagon decision to combine contracts for the operations and maintenance of the so-called Ground-based Mid-course Defense, or GMD, with work on the system’s continued development.

GMD is the hub of a layered, multibillion-dollar US bulwark against ballistic missiles that could carry chemical, biological or nuclear warheads.

The sole US defense against long-range missiles, it was deployed by then-President George W. Bush in 2004 and involves silo-based missile interceptors in California and Alaska.

The Pentagon’s Missile Defense Agency, in a Nov. 25 posting on the Federal Business Opportunities website, said the combined GMD work was expected to have an annual value of about $600 million for five to 10 years.



In adding development, fielding and systems engineering, the contract would go significantly beyond GMD operations and logistics support, which the agency previously had announced as the potential scope.

Boeing has led the GMD industry team since its inception. The value of its contracts would total about $18 billion from January 2001, when it formally became the prime contractor, through December 2011, when the latest contract ends, Boeing spokesman Chuck Cadena said.

Boeing, the Pentagon’s No. 2 contractor by sales after Lockheed, intends "to continue to lead the GMD program for the Missile Defense Agency," said Greg Hyslop, a vice president at Boeing Missile Defense Systems business unit.
"Based on our experience leading the GMD best of industry team, we will provide the lowest-risk, highest readiness and most reliable defense," he said in response to a query from Reuters.

Holly, a former Missile Defense Agency deputy director, said Lockheed’s "mission understanding and domain expertise" would assure "a seamless transition in supporting and extending the life of this crucial fielded weapon system."

A draft request for proposals will be issued in early 2010, and a contract is expected to be awarded in early 2011.

Northrop Grumman Corp, the Pentagon’s No. 3 supplier by prime contract value, had said it would compete for the operations and sustainment work. It did not respond to a query about whether it would vie now for the expanded work.

A Missile Defense Agency spokesman did not immediately reply to a question about the reason for the change in the scope of the GMD contract.

Army Lieutenant General Patrick O’Reilly, the agency head, told Reuters in July that he foresaw much more competition for missile defense work under a weapon systems acquisition reform act signed into law by President Barack Obama in May.
"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," he said at the time.