Boeing has found itself competing for the first time to keep its U.S. missile defense work, with Lockheed Martin also vying for a shot at the $10 billion government contract.
The Missile Defense Agency, which has a sizeable presence at Schriever Air Force Base, will soon take bids on the contract to manage and maintain the nation’s missile defense system, which was developed and tested by Boeing.
Boeing has about 3,000 people nationwide working on the Ground-based Midcourse Defense project, or GMD as it’s known in the industry. About 80 people work on GMD in Colorado Springs.
A decision is expected in 2011. The rivals showed off their technology and announced partners last week at the U.S. Army’s annual Space and Missile Defense Conference in Huntsville, Ala.
Boeing’s existing contract is worth about $18 billion for the 10 years that ends in 2011. The company was first awarded the national defense missile award in 1998, said Boeing spokeswoman Jessica Carlton. Then, in 2001, it won a contract to complete the core of the project. It also has a third contract: the maintenance of the system.
“MDA decided they would marry the sustainment contract with the development contract with this competition,” Carlton explained. “So it’s the first time we’ve competed for the entire project. It’s not a small contract, and it’s a very big deal for us.”
Other companies are also hoping for a piece of the business. Northrop Grumman Corp has teamed with Boeing, while Lockheed is teamed with Raytheon.
The new contract is coming at a time when the Pentagon is interested in reining in costs. And cost “is a major factor” in who gets the next contract, said Lt. Gen. Patrick O’Reilly, head of the Missile Defense Agency.
The contract will amount to $5 billion in its first five years, followed by an equal amount for the next five, he said. In other words, the government plans to spend about half as much over the life of the 10-year deal as it did in the first decade of its contract with Boeing.
The new project will build on Boeing’s success, overseeing testing and development of the Ground-Based Midcourse Defense project, “our only line of defense” against intercontinental ballistic missiles, O’Reilly said.
That segment of the contract is supposed to be completed by the end of this year, and includes 30 ground-based interceptor missiles, a sea-based radar platform and a command-and-control center. The interceptors can strike missiles as much as 200 miles above Earth at a speed of 15,000 miles an hour.
The decision to open the process for competition comes from a DoD effort to end “no-bid” contracts.
Boeing has a total of 500 people working in the Springs, on the Global Positioning System satellites, as well as intelligence and security.
Lockheed is the world’s largest defense contractor, and obtaining the bid will give the company a role in every missile-based defense system. It already builds land-based interceptors for short- and medium-range missiles.
The Milstar system, a 16-year-old satellite constellation, received a much-needed boost last week when the Air Force launched the first Advanced Extremely High Frequency satellite.
Milstar is operated by the 4th Space Operations Squadron at Schriever Air Force Base.
The launch will provide protected cross-linked satellite communications worldwide in areas where military operations are ongoing, said Lt. Col Todd Hoover, director of operations for the division.
“Its benefits will be felt in special operations, strategic nuclear deterrence, strategic defense, theater missile defense and space operations and intelligence,” he said.
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