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Lockheed, Boeing battle for future of Aegis


Just imagine how Lockheed Martin company leaders must have felt Wednesday upon seeing the announcement that Boeing, of all companies, is submitting a bid to become the Combat System Engineering Agent for the U.S. Navy's Aegis system.

Aegis has been a Lockheed Martin product -- or the product of companies now part of Lockheed -- for years, but evolving technology means other players can now try to get into the game.

Aegis is a network of radars and computers that helps surface warships see, think and act quickly against air, surface and undersea threats. It was originally designed to protect carrier battle groups from Soviet attacks at sea: In the age of high-speed anti-ship missiles, it just took too long for human sailors to spot, identify, track and decide to launch against an incoming threat. The Navy needed sensors and computers that, if necessary, could do so in the blink of an eye. Since then, the service has taught Aegis to shoot down a satellite and defend against ballistic missiles. Four Aegis warships will defend Europe as part of the Obama administration's missile shield.

For most of its history, the 1970s-vintage guts of Aegis looked like the dusty back shelf at Radio Shack, full of vacuum tubes and big transistors and many complicated parts. They worked, but to the Navy's delight, today's new electronics mean that the latest builds of Aegis can be decoupled from their old proprietary hardware and use regular computer servers -- meaning it's "open architecture."

Enter Boeing. It's got an opportunity to make a play for what has been a core Lockheed business in trying to help run the Navy's Aegis modernization, and it wants the job of helping to field Aegis on the Navy's planned new destroyers. Take special note of how Big B characterized the system in its announcement:

“Boeing has assembled a strong team to support the next evolution of the Aegis Weapon System with fresh, innovative solutions,” said Boeing Network & Space Systems President Roger Krone. “Boeing recognizes the vital importance of the Aegis program to the nation’s security, and we are prepared to support the Navy’s goal of affordably enhancing the system’s capabilities to meet future threats and challenges.”

Developed by the Navy, the Aegis Weapon System is a surface-to-air integrated weapons platform designed to defend against airborne threats. The Aegis CSEA will provide systems engineering and development support for the modernization of the current system. Under the new contract, enhanced air and missile defense capabilities will be integrated on Flight III destroyers to help warfighters respond to advancing threats. The Navy is expected to award the Aegis CSEA contract in fall 2012.

See that? "Developed by the Navy" -- technically true. But that's not the version of history that Lockheed gave:
"Lockheed Martin has been proud to support the U.S. Navy over four decades of Aegis, and we believe bringing that our proven combat system experience make our proposal the most reliable, lowest risk and most reasonable approach," said spokesman Scott Lusk.

He continued: “Lockheed Martin has been proud to support the U.S. Navy designing, developing, integrating and producing Aegis combat system components for more than 40 years. Lockheed Martin has successfully delivered 15 technological evolutions to the U.S. and allied navies.  We have partnered with the Navy to take the Aegis Combat System from an anti-ship missile system to the basis for the U.S. approach to global missile defense – at sea or on shore.”

Also true. Going forward, however, Lockheed apparently will need to defend its kingship of this mountain, rather than just carrying it over automatically. Theoretically, all this puts the Navy in the good acquisitions sweet spot -- it now has "competition" for an important program and will get the benefit of "savings" as Boeing and Lockheed duel to become the next systems engineering agent. Still, until the companies or the government divulge the actual numbers involved, we may not know how big a benefit the Navy actually gets.


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