Lockheed Martin Corp. may be losing its grip on a spy-plane project that could be worth as much as $6 billion.
The company, based in Bethesda, Md., won an $879 million contract in August 2004 to develop the initial phase of a new fleet of military spy planes for the U.S. Army and Navy.
On Monday, the Navy distanced itself from the project.
If the Navy withdraws, analyst David Rockwell says, there’s at least a 50-percent chance that Lockheed will lose the contract.
“There’s a good chance that the Navy will duck out, and that makes it an even better chance that the Army will” open the contract for new bids, said Rockwell, an analyst with Teal Group Corp., an aerospace and defense research firm based in Fairfax, Va.
Lockheed employs 10,000 people in Colorado, including about 250 engineers at its Deer Creek plant in Jefferson County who are developing the brains for the spy-plane program, called the Aerial Common Sensor.
When initially announced, the project was expected to produce up to 38 planes for the Army and up to 19 planes for the Navy.
In April, the Army discovered that the aircraft Lockheed planned to use might be too small to hold the equipment needed for battlefield intelligence and surveillance missions.
Army officials told Lockheed it had until this month to draw up a new plan.
Lockheed said it is working to address the problems with the program and is preparing to present a new plan to the government Monday.
“Over the last year, we have made substantial progress in the development of the Aerial Common Sensor, and we remain committed to the delivery of this revolutionary capability to the war- fighter,” the company said in a statement.
Lockheed also said it has not been notified of any changes to the program.
“We are not yet a full member of the program,” said Capt. Tom Van Leunen, a Navy spokesman. “It is an Army program in which the Navy is considering becoming a full partner.”
Analyst Rockwell said the Navy is not dependent on the Aerial Common Sensor because it has its own next-generation spy-plane program called the Multimission Maritime Aircraft project.
The Army doesn’t have any alternatives, he said.
“They can change it, but they can’t dump it,” Rockwell said. “The Navy, on the other hand, can easily dump it.”
The initial 66-month contract is for Lockheed to develop software and hardware and provide systems integration for the first five spy planes.
Staff writer Andy Vuong can be reached at 303-820-1209 or avuong@denverpost.com.
Aerial Common Sensor
The Aerial Common Sensor project was created to provide the U.S. Army and Navy with a new fleet of 57 military spy planes. A rendering of one such plane is above.
Lockheed’s initial contract: A 66-month, $879 million deal for software and hardware development and systems integration for the first five planes
Local workers: 250 engineers at the Deer Creek facility in Jefferson County
Other companies working on initial contract: Brazil’s Empresa Brasileira de Aeronautica; Argon Engineering Associates Inc.; BAE Systems Plc; Harris Corp.; L-3 Communications Holdings; Raytheon Co.
Potential value of entire project: $6 billion
Planes for Army: Up to 38
Planes for Navy: Up to 19
Sources: U.S. Army and Navy
