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20 Jul 04. General Dynamics Corp. and Lockheed Martin Corp. will split a multibillion-dollar contract to develop a new warfighter communications system that could be announced this week by the U.S. Army, sources familiar with the contract said on Tuesday.

General Dynamics, based in Falls Church, Virginia, will have the lead role in overseeing the contract, although the work will be shared equally between the two companies, defense officials and a congressional aide told Reuters.

The sources, who asked not to be named, said the contract was valued at $10 billion to $12 billion in the longer-term. The Army initially planned to award the contract to a single winner, but decided it could benefit from having both contractors working on the Army’s new Warfighter Information Network-Tactical (WIN-T) system.

WIN-T is designed to revolutionize battlefield communications, giving troops access to secure high-bandwidth voice, data and video communications over a mobile wireless network, industry officials said.

“The Army has decided that rather than having a competition, it will take the two teams that are seeking the WIN-T contract and fashion a single national team out of them with General Dynamics as the prime contractor,” said Loren Thompson, director of the Virginia-based Lexington Institute.

“It’s a big plus for both General Dynamics and Lockheed, because WIN-T will receive more funding as the network for the Army’s Future Combat System is delayed,” he said.

The Army is due to unveil a major restructuring of the FCS modernization program on Wednesday, including a delay in the networking architecture being developed for that project.

Its decision to allow General Dynamics and Lockheed to work together on the WIN-T project was finalized at meetings in Washington on Tuesday, the sources said. A formal announcement could come as early as Wednesday.General Dynamics built the Army’s current battlefield communications system, the Mobile Subscriber Equipment-Tri-Service Tactical Terminal in the 1980s.

But that system could not keep pace with the widespread operations in Iraq last year, forcing U.S. and coalition forces to buy secure, commercial satellite communications capabilities, mostly at high, last-minute prices. General Dynamics had no comment. On Monday, the company won a contract valued at around $1 billion to build handheld and portable radios that would use the new WIN-T network.

Jeff Adams, a spokesman for Bethesda, Maryland-based Lockheed, said he was aware of Army deliberations on splitting the contract between both bidders, but said the company had received no official notification from the Army.

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