Lockheed Martin Corp (>> Lockheed Martin Corporation) beat out Raytheon Co (>> Raytheon Company) to win a contract worth up to $428 million to continue modernizing Aegis combat systems on U.S. Navy ships, the Pentagon announced on Friday.
The U.S. Department of Defense said the Navy awarded Lockheed an initial contract worth $26.5 million, which includes options that would bring the total value to $428 million.
Lockheed said the 10-year contract expands its 40-year legacy integrating the Aegis combat system on Navy warships.
The contract calls for Lockheed to install the hardware and software needed for the combat system on board new Arleigh Burke-class destroyers and to modernize existing destroyers and cruisers to operate the latest version of Aegis, Baseline 9.
The system allows ships to defend simultaneously against airborne threats, such as aircraft or cruise missiles, while also targeting and intercepting ballistic missiles, Lockheed said.
"When a ship goes into harm’s way, the combat system must work 100 percent of the time – there is no margin of error,” said Chris Minster, a senior program manager with Lockheed.
(Reporting by Andrea Shalal; Editing by Dan Grebler)