UPDATE 1-U.S. GAO rules for BAE Systems in Navy contract protest

Wed Nov 13, 2013 6:47pm EST

By Andrea Shalal-Esa

WASHINGTON Nov 13 (Reuters) - The U.S. Government Accountability Office (GAO) on Wednesday ruled in favor of BAE Systems PLC in the British company's protest of a U.S. Navy decision to award to Raytheon Co a contract for a next-generation electronic jammer, BAE and the Navy said.

The ruling reopens the procurement process for the jammer, but it was not immediately clear when the contract bidding would resume.

BAE protested to the GAO in July, saying it had concerns over how the Navy had evaluated its offering to win a deal worth about $279 billion.

"We are pleased that the GAO has sustained our protest. We look forward to working with the Navy to ensure a fair and open evaluation of our proposal for this important program," a BAE spokeswoman said.

In a report, the GAO, the audit and investigative arm of Congress, criticized the Navy's handling of the procurement process involved in awarding the contract.

The GAO said the Navy failed to reasonably evaluate the risk of the proposals, did not adequately document its decisions, and improperly credited Raytheon with outdated performance data.

It did not address the merits of the competing offers, which came from Northrup Grumman Corp as well as BAE Systems.

"This is a very positive development for BAE, because they get another crack at winning this crucial contract," said Loren Thompson, chief operating officer of the Lexington Institute.

"However, there is no guarantee that Raytheon won't win this again. The decision is about the process rather than the substance of the proposal."

The new jammer will replace the ALQ-99 tactical jamming system used on the EA-18G Growler aircraft build by Boeing Co. .

The Navy has said the jammer will be critical for future combat missions. The jamming pods will enable U.S. aircraft to render enemy radars useless.

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