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LOCKHEED MARTIN/NORTHROP JV WIN $16.95BN DEEPWATER CONTRACT

25 Jun 02. A joint venture of Lockheed Martin (NYSE: LMT – News) Corp. and Northrop Grumman Corp. was awarded a contract worth $16.95 billion to supply new ships and aircraft, plus improved command and control systems, for the U.S. Coast Guard.

The contract, known as the Deepwater Program, is the largest ever for the Coast Guard.

“The Deepwater Program will ensure the Coast Guard continues to guarantee the nation’s maritime security,” said U.S. Deputy Secretary of Transportation Michael P. Jackson in a prepared statement Tuesday. “As America’s first line of defense for maritime homeland security, it is critical that the Coast Guard be able to identify and intercept targets of interest as far from U.S. shores as possible.”

The Coast Guard issued a nationwide alert two weekends ago, saying it had received reports of a possible threat from swimmers and divers against the country’s ports and harbours.

The award to the Integrated Coast Guard Systems venture, which may extend up to 30 years, includes $11.04bn to buy new ships and aircraft and upgrade control systems, and $5.91bn for operating, maintenance, and sustainment costs.

The Deepwater program will involve acquiring up to 91 ships, 35 fixed-wing aircraft, 34 helicopters, 76 unmanned surveillance aircraft, and upgrading 49 existing cutters and 93 helicopters, in addition to systems for communications, surveillance and command and control.

The contract calls for delivering the first ships and planes, as well as upgrades to some existing vessels, within the next five years. This is the first time the Coast Guard has bundled procurement of several types of ships, aircraft and other equipment into an integrated procurement program.

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