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10 Feb 04. Reuters reported updated news in the ACS contest between Lockheed Martin Corp. (NYSE:LMT – News) and Northrop Grumman Corp. (NYSE:NOC – News) to win a multibillion-dollar contract to develop a new joint airborne surveillance and reconnaissance system for the Army and Navy. (See BATTLESPACE C4ISTAR TECHNOLOGIES, December)

The companies submitted their bids on Feb. 3 and the Army is expected to award an initial contract for the Aerial Common Sensor worth about $670m in May, with some analysts putting the total cost of the program at over $6bn.

Stephen Cambone, defense undersecretary for intelligence, told industry executives on Tuesday the ACS program was a good example of how the military services were increasingly working together on weapons systems, instead of developing their own separate — but parallel — programs.Developing joint programs helps lower costs and makes it easier for military services to work together on the battlefield. In addition, the Army wants a high level of commercial technologies on the plane to further limit costs.

In this case, the Navy has agreed to use the Army-led ACS to replace its own fleet of aging EP-3 surveillance aircraft. Lockheed vice president Wes Colburn, who leads the company’s “capture team,” said in an interview that ACS would help the U.S. military shorten the time it took to identify enemy threats and respond to them.

“This system will drastically reduce the sensor to shooter timeline,” he said, although he declined to give precise details, saying that aspect of the project was classified.

ACS will carry a variety of sensors to detect, identify, locate, track and rapidly disseminate time-sensitve information to warfighters, according to an Army information paper. It is meant to be one of the first systems to reach a fight, providing early intelligence that could help shape the early stages of a battle, Army officials said.

Both Lockheed and Northrop have received Army funds to do initial development work on the surveillance system, but the Army intends to narrow the field to a sole winner this spring. Current plans call for the aircraft to be manned, with an eye to making it an unmanned platform in the future.

The Army is due to receive its first ACS in fiscal year 2009, with complete replacement of its current eavesdropping fleet by 2017. The Navy would start getting its ACS in 2012. Colburn said Lockheed first began work on ACS in 1997, and chose to use the ERJ-145 regional jet built by Brazil’s Embraer Sa (Sao Paolo:EMBR3.SA – News), which he called a “heavily U.S.-contented plane,” with over 70 percent of its parts being U.S.-made.Northrop Grumman CEO Ron Sugar said his company’s bid was strengthened by Northrop’s acquisition last year of TRW and an earlier purchase of Westinghouse’s electronic systems group.

“As a result of our legacy companies of TRW and Westinghouse, basically we’re the people who have 50 years of legacy knowledge in this business,” Sugar told Reuters. Sugar said Northrop had chosen a “fantastic” plane, the G450, the newest executive business jet produced by General Dynamics Corp.’s (NYSE:GD – News) Gulfstream Aerospace Corp.The G450 has more power and endurance than the Embraer plane, but Colburn argued that was not as important, since the aircraft essentially needed to be “a workhorse bus.”He said Lockheed chose the Embraer because of its reliability, maintainability and the Brazilian company’s existing worldwide logistics operation.

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