NavWeek: Radar Rub

If the Lockheed Martin protest of the U.S. Navy's award to Raytheon for the Air & Missile Defense Radar (AMDR) proves one thing, it is this: no contract is protest-proof.

The Navy did some pretty nifty acquisition yoga to make the competition as transparent as possible, in the hopes of avoiding a protest and the resultant delays. Now the program is under a stop-work order while the Government Accountability Office weighs the merits of Lockheed's case.

From the outset, though, Lockheed really had little to gain and much to lose in the AMDR fight. The company already reigns over shipboard missile defense, as the prime developer and contractor for the Aegis Combat System.

Pinpointing the decades-long investment in Aegis thus far is no easy task. Some put its development at about $30 billion, or more than $80 billion if one includes ship-integration costs. The rule of thumb, though, is about $1 billion per ship for an Aegis system installation, with more than 90 ships equipped thus far.

Aegis has the international reputation for being the gold standard for shipboard combat systems. The Navy and Lockheed have embarked on an ambitious plan to improve Aegis, with special emphasis on upgrades to bolster the ships’ abilities to do ballistic missile defense (BMD), in response to a greater national and international need.

The improvements include opening up parts of Aegis to greater competition, to break what many see as a proprietary hold that Lockheed has on a system that has endured through the decades mostly as a result of evolving needs and requirements.

With each successful Aegis test, there has been an undercurrent of murmuring about the need for AMDR.

AMDR is the Navy program designed to better meet BMD missions – and yet-unnamed threats – far into the future. And by starting as a blank-sheet program, it has an open architecture that prevents any proprietary usurpation.

It’s pretty apparent, then, that Lockheed was in a tough situation with AMDR. Given the Navy’s desire to open up its combat and missile-defense systems to greater competition, and given the experience and talent of AMDR rivals Raytheon and Northrop Grumman, it should have come as little surprise that the initial nod went to someone other than the perceived incumbent.

And, in retrospect, it should not be a surprise that Lockheed protested. If Raytheon’s proposal had been a walkaway winner that would have been one thing. But by all accounts, this was a close call. So, why not protest? It’s almost like a speeding ticket. What's the harm in fighting it? Who knows, you might win.

Of course, there could be harm to the AMDR program writ large. Any delay in this financial climate could cost funding, which could have serious repercussions for the effort.

And then what? The Navy would have to depend more on Aegis, as it has been all these years.

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