RPT-UPDATE 2-Boeing faces competition for US Army modernization

(Repeats to additional subscribers)

* Boeing will still be able to participate

* Pentagon revamps the projected $160 bln project

* Boeing shares end 6.5 pct lower on NYSE (Adds Boeing-SAIC comment, Army-Marine ground vehicle study)

WASHINGTON, June 23 (Reuters) - Boeing Co (BA.N), lead contractor for the U.S. Army's canceled Future Combat Systems modernization program, is to face competition to manage successor programs, the Pentagon said on Tuesday.

"Boeing will have an opportunity to participate in all those pieces," Ashton Carter, the Pentagon's top weapons buyer, told reporters in announcing a restructuring of the projected $160 billion modernization.

Asked if that meant the programs would be open to competition, he replied: "Yes, they will be."

In formally killing the old effort, Carter directed the Army to put together "separate but integrated programs" that would meet goals laid out by Defense Secretary Robert Gates in the Pentagon's fiscal 2010 budget request.

The first slice of new capabilities is to be spun out initially to seven infantry brigades, the Defense Department said.

A Pentagon order, called an acquisition defense memorandum, directed the Army to join the Marine Corps in assessing "joint capability gaps for ground combat vehicles."

"The assessment will inform new requirements for Army ground combat vehicle modernization, leading to the launch of a new acquisition program in 2010," a Pentagon statement said.

Gates had said the old effort had failed to reflect adequately the lessons of counterinsurgency and close-quarters combat in Iraq and Afghanistan.

"He was further troubled by the terms of the single contract covering the whole FCS effort," the Defense Department added in the statement.

Boeing was the senior partner in managing the project, the world's largest land warfare weapons program. Science Applications International Corp [SAIC.UL] was the junior partner in the old "lead systems integrator" role.

In a joint statement, Boeing and SAIC said the acceleration and expansion of the network to Army combat brigades reflects confidence in "technological maturity" of FCS capabilities and the progress made on that program.

Boeing shares fell $3.03 or 6.5 percent to close at $43.87 on the New York Stock Exchange on Tuesday. (Reporting by Andrew Gray and Jim Wolf, editing by Gerald E. McCormick and Matthew Lewis)