The U.S. Navy announced June 14 that it has chosen the Boeing Co. to be the prime contractor for the Multi-mission Maritime Aircraft (MMA), a program expected to be worth tens of billions of dollars for the winner.
Boeing, which defeated Lockheed Martin Corp., has been awarded a $3.89 billion contract to develop the replacement for the aging Lockheed Martin P-3 anti-submarine patrol aircraft. Total development and production costs are expected to be $25.5 billion.
Boeing offered a modified version of its 737 commercial jet, while Lockheed Martin proposed a significantly updated version of its P-3.
Navy acquisition chief John Young told reporters that Boeing's cost for development was "slightly lower" than Lockheed Martin's but that the decision was not based only on cost. The competition was "very close" and both companies did "an excellent job," but Boeing's "ability to manage and deliver in a timely way ... helped tip the scales," Young said.
While Lockheed Martin contended that its turboprop design would be better suited for flying at low altitudes, a key requirement for maritime missions, Boeing countered that its turbofan design can fly as low as needed and offers more reliability.
Richard Aboulafia, an aviation consultant at the Teal Group, called the Navy's decision a "major victory" for Boeing, which will "take over this franchise" from Lockheed Martin.
"This is a major plus for Boeing," Aboulafia told The DAILY. "After a year of scandals, setbacks and a failed [Air Force 767] tanker bid, this expands their defense work into a new area, and validates their belief in a civil-military corporate structure. Their emphasis on networked warfare is clearly paying dividends."
For Lockheed Martin, "losing maritime patrol revenue is going to hurt," Aboulafia said. "They'll gradually lose the maritime patrol franchise, which they've had for decades. It's also a lost opportunity to increase their net-centric combat systems work."
The Navy plans to buy a total of 108 MMAs. Low-rate production of 34 aircraft is expected to take place from 2010 to 2012. A full-rate production decision is scheduled for 2013, though the Navy is looking at the possibility of accelerating that.
The MMA program is not expected to offer as many export opportunities as the P-3 due to reduced demand for anti-submarine systems, as well as increased competition from other countries and from anti-submarine helicopters, Aboulafia said. While Lockheed Martin has sold hundreds of P-3s overseas, Boeing will be fortunate to export just 30 to 40 MMAs, he said.
The MMA is expected to improve upon the P-3 by making it easier to exchange information with other forces. It is supposed to be complemented by the Navy's Broad Area Maritime Surveillance (BAMS) unmanned aerial vehicle, whose prime contractor has not been chosen yet.
The Department of Defense said June 7 that acting Pentagon acquisition chief Michael Wynne had given the MMA program approval to begin system development and demonstration (DAILY, June 8). The Navy will have to undergo another review in fiscal 2009 before committing funds to low-rate production.
The Navy plans to achieve an initial operational capability (IOC) for MMA in FY '13. The Boeing aircraft will be powered by CFM56 turbofan engines, a product of a 50/50 joint company consisting of General Electric USA and Snecma of France (DAILY, Nov. 14, 2003). Northrop Grumman and Raytheon will supply several sensors.
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