U.S. eavesdropping agency says Private Citizen is purely R&D

WASHINGTON, July 8 (Reuters) - A contract has been awarded for research to help counter computer-based threats to national-security networks, the chief U.S. code-cracking and eavesdropping agency said, amid mounting concern over cyber vulnerabilities.

The program, dubbed Perfect Citizen, is "purely a vulnerabilities-assessment and capabilities-development contract," Judith Emmel, a National Security Agency spokeswoman, said in an email to Reuters.

"This is a research and engineering effort," she said. "There is no monitoring activity involved, and no sensors are employed in this endeavor."

The Wall Street Journal, in its Thursday editions, described Perfect Citizen as relying on sensors it said would be deployed in networks running critical infrastructure such as the electricity grid and nuclear-power plants.

Raytheon Co (RTN.N) won a classified contract for the classified work's initial phase valued at up to $100 million, the report cited a person familiar with the project as saying.

Joyce Kuzmin, a Raytheon spokeswoman, told Reuters in response: "We have no info on this."

The NSA, a Defense Department arm, did not confirm or deny that the contract in question had been awarded to Waltham, Massachusetts-based Raytheon.

"This contract provides a set of technical solutions that help the National Security Agency better understand the threats to national security networks," Emmel said.

It would be inappropriate to confirm or deny details of the Journal report because of "the high sensitivity of what we do to defend our nation," she added.

"Any suggestions that there are illegal or invasive domestic activities associated with this contracted effort are simply not true," Emmel said. "We strictly adhere to both the spirit and the letter of U.S. laws and regulations."

U.S. Deputy Secretary of Defense William Lynn said last month that more than 100 intelligence agencies and foreign militaries were actively trying to penetrate U.S. computer systems, and "weapons-system blueprints are among the documents that have been compromised."

The United States must be able to operate freely in cyberspace amid dangers of "remote sabotage," General Keith Alexander said June 3 in his first public remarks as head of U.S. Cyber Command. It was activated in May to harmonize offensive and defensive U.S. operations in cyberspace.

(Reporting by Jim Wolf)