WASHINGTON Raytheon Co (RTN.N) on Monday beat out incumbent Northrop Grumman Corp (NOC.N) and others to win a $279 million deal to develop a new electronic jammer for the U.S. Navy, a deal analysts said could eventually be worth billions of dollars.
The Pentagon announced late on Monday that Raytheon had won a contract for technology development of the Next Generation Jammer, which will replace the ALQ-99 tactical jamming system used on the EA-18G Growler aircraft built by Boeing Co (BA.N).
The Navy said the new jammer would be critical for future combat missions and should be ready for use by fiscal 2020. The jamming pods will enable U.S. aircraft to render enemy radars useless.
The 22-month contract, which runs through May 2015, marks a significant win for Raytheon, said Loren Thompson, chief operating officer of the Virginia-based Lexington Institute, noting that there were few if any other significant electronic warfare contracts expected in coming years.
"This is a huge win for Raytheon and such a big blow to the losers that it may trigger consolidation in the defense electronics sector," Thompson said. "This program is crucial to combating efforts by China and other countries to keep U.S. forces out of their region."
Thompson said he expected the losing bidders - Northrop, ITT Exelis XLS.N and BAE Systems (BAES.L) to lodge protests against the contract decision, given its importance, but said he did not expect the award to be ultimately overturned.
Northrop spokesman Randy Belote said the company, which had teamed with Exelis on its bid, was disappointed by the decision and remained convinced that its solution was superior.
"We look forward to the Navy's debrief to understand why our offering was not selected," he said in an emailed statement.
Raytheon was one of four companies that worked on a 33-month technology contract that identified and matured critical technologies for the new jamming system.
"We couldn't be more pleased with the customer's selection of our NGJ offering," said Raytheon spokesman Jon Kasle. "We look forward to beginning work on this landmark program."
Naval Air Systems Command said the contract was the next step in transitioning mature components into testable systems, as well as developing a preliminary design for the new jamming pods that will be used on the EA-18G Growler by fiscal 2020.
It said the technology development phase would be followed by a 4-1/2-year engineering and manufacturing phase, during which the pods developed by Raytheon would be testing and flown on the Boeing-built warplanes.
(Reporting by Andrea Shalal-Esa; Editing by Stephen Coates)