* Lockheed gets order worth $697 mln
* Austal order worth $682 mln
* Lockheed beats out rivals for Aegis combat system work
By Andrea Shalal-Esa
WASHINGTON, March 4 Lockheed Martin Corp
and Australia's Austal each won orders to build two
more smaller warships for the U.S. Navy, while Lockheed beat out
two rivals to remain the chief developer of the Aegis combat
system, the Pentagon said Monday.
Lockheed won an order valued at $697 million to build two
more of its steel monohull Littoral Combat Ships (LCS) for the
Navy using fiscal 2013 funding, the Defense Department said in
its daily digest of large weapons contracts. It said work on the
two new Lockheed ships would be completed by July 2018.
The U.S. unit of Austal received a contract valued at $682
million to build two more LCS ships based on its
aluminum-hulled, trimaran design for LCS ships for the Navy,
with the work slated to be finished by June 2018, the Pentagon
Navy acquisition chief Sean Stackley said the strategy of
buying the new LCS ships in blocks was translating into
"One of our imperatives in dealing with this fiscal crisis
is to execute our programs as effectively as possible," Stackley
said in a statement. "This (latest contract action) again
demonstrates our efforts to bring stability to industry, from
the shipyards to the small businesses that support these ships'
construction, in a period of great uncertainty."
The first LCS ship built by Lockheed, the USS Freedom, began
its voyage last Friday to Singapore, where it will be based for
Austal said the contract funded the fifth and sixth ships in
a 10-ship block buy awarded to Austal in December 2010. The
overall value of the 10-ship block was over $3.5 billion, it
Separately, the Pentagon announced that Lockheed beat out a
rival team including Raytheon Co and Boeing Co to
retain its role as chief developer of the Aegis combat system
for use on Navy destroyers, cruises and future warships.
It said Lockheed won a five-year contract with an initial
value of $101 million, to be the chief engineer for the design,
development, integration, test and delivery of the next
generation of the Aegis combat system, which was developed by
Lockheed and the Navy and first went into service in 1983.
The Navy had sought to inject competition into the Aegis
program by opening the contract, valued by analysts at several
hundred million dollars over time, to competition for the first
time in 40 years.
Lockheed's top executive for the Aegis program told
reporters the company was "thrilled with the news that we get to
continue on in this role," calling it a "franchise program" for
the Pentagon's biggest supplier.
Jim Sheridan, director of Aegis programs for Lockheed, said
the company won the contract by showing the Navy that it would
"continue to push the envelope with respect to capability, but
doing so affordably in a fiscally responsibly manner."
Navy Rear Admiral Joe Horn, program executive officer for
integrated weapons systems, said the contract underscored the
Navy's commitment to competition.
"By openly competing the Aegis ... contract, the Navy will
benefit from improved systems at a lower cost, which is
absolutely critical in light of our budget challenges," Horn
said in a statement.
Sheridan said the contract would be allowed to proceed,
despite a U.S. congressional budget resolution that bans new
programs, because it continued ongoing efforts on the Aegis
program and did not constitute a new program.