Britain's BAE rises as Pentagon supplier

By Jim Wolf

WASHINGTON (Reuters) - BAE Systems Plc has become the Pentagon's sixth-biggest supplier, up from eighth, despite a U.S. investigation of its compliance with anti-bribery laws to win a Saudi arms deal in the 1980s.

BAE, based in Farnborough, England, picked up $9.2 billion in fiscal 2007 prime contracts, a list of the Pentagon's top 10 contractors showed on a new White House Web site.

In fiscal 2006, its prime Pentagon contracts totaled $4.7 billion. The sole supplier of Bradley Infantry Fighting vehicles, BAE remained alone among Europe-based companies to figure as one of the Pentagon's top 10 suppliers.

It was boosted by its acquisition last year of Armor Holdings Inc and demand for its combat vehicles and other land systems used by U.S. forces in Iraq and Afghanistan.

The Pentagon's top five suppliers did not change from 2006. In order of sales, they are Lockheed Martin Corp, Boeing Co, Northrop Grumman Corp, General Dynamics Corp and Raytheon Co.

L-3 Communications Holdings Inc stayed in seventh place. United Technologies Corp rose to eighth from ninth the year before.

KBR Inc, the biggest Pentagon contractor in Iraq, was No. 9, down from sixth when it was still part of Halliburton Co.

Science Applications International Corp filled out the last at No. 10, unchanged.

The Defense Department handed out $312.1 billion in prime contracts in fiscal 2007, up from $298.5 billion the year before, the government figures showed.

For the first time, the rankings were posted on USAspending.gov rather than released by the Pentagon, said Chris Isleib, a Defense Department spokesman.

The change is in keeping with the Federal Funding Accountability and Transparency Act of 2006, which mandated a website reporting detailed information on all government transactions topping $25,000.

The new site "provides better access to federal spending data than any other source, and transparency is its primary goal," said Jane Lee, a spokeswoman for the White House budget office.

BAE disclosed the U.S. anti-corruption investigation in June 2007. For years, BAE has denied charges it made illegal payments in the mid-1980s to Saudi royalty and others to clinch a sale of Tornado fighters and other arms to Saudi Arabia worth up to $80 billion.

(Reporting by Jim Wolf, editing by Richard Chang)