By Geoff Fein
For the past several years, defense companies had been waiting for the Navy to open up the Aegis combat system modernization contract.
In May, when the Navy posted sole source solicitations to Lockheed Martin [LMT] on Federal Business Opportunities for Aegis modernization work, Raytheon [RTN] decided it was time to act. The company this week filed a protest with the Government Accountability Office (GAO), not over a contract award, but for lack of competition, an industry source said.
“In the past the government said it intended to compete the work for modernizing Aegis, and then opted, without explanation, to procure through sole source awards. Competition is the lifeblood of innovation, spurring technological advances and greater cost efficiencies. Raytheon believes that an open competition with transparency is essential to affordable U.S. naval superiority. We filed this protest as a course of last resort, and are hopeful for an outcome that will benefit the U.S. Navy and those that use our systems,” Raytheon said in a statement.
The Navy had been discussing for several years the potential for breaking up the Aegis modernization program into several components that included a ballistic missile defense focus, a Platform Systems Engineering Agent focus, and a focus on the baseline Aegis, a source told Defense Daily.
Due to the recently filed protest, neither Raytheon, Lockheed Martin nor the Navy would comment for the story.
Lockheed Martinhad been the incumbent on the existing contract. Although breaking the contract up could potentially introduce risk into the program, the Navy wanted to increase competition. Competition, Navy officials have been saying for several years, would bring down costs and make new systems, particularly combat systems, affordable.
In an interview with Defense Daily in October 2006, former Chief of Naval Operations Adm. Mike Mullen noted that the effort to move toward open architecture has been slow going.
Open architecture was viewed as the path the Navy would have to take to increase competition and drive down cost.
“I am disappointed we are not moving faster. The technology is outstripping us in terms of delivering less expensive technology rapidly and getting more capability to the fleet,” Mullen said. “I am going to press on this because, fundamentally, I think we are behind. We are moving too slow. We have had significant success with this in the submarine world. I need to see this equally successful in the surface and aviation world (Defense Daily, Nov. 3, 2006).”
Earlier this year Rear Adm. Terry Benedict, program executive officer integrated weapon systems (PEO IWS), laid out an elaborate road map to implement open architecture, in the coming years, into surface combatants.
But the Navy began to consider issuing a sole source contract to Lockheed Martin for Aegis development, according to a source.
The source noted concerns were raised within the Navy’s acquisition office, then-headed by John Thackrah, that going with a sole source contract would raise questions about the Navy’s open architecture efforts. According to the source, at that time, the Navy opted not to proceed with the planned sole source contract.
In February, Dan Smith, president of Raytheon Integrated Defense Systems, wrote a letter to Benedict expressing interest in pursuing opportunities in surface Navy combat systems.
Raytheon was already building the computing system for DDG-1000, more commonly known as the Total Ship Computing Environment (TSCE), and was looking for opportunities to compete for Aegis work, an industry source said.
“The Navy has invested over $3 [billion] on software and architecture for Zumwalt, and has created an opportunity to reuse nearly 95 percent of what has already been invested for modernization and commonality of the U.S. Navy’s combatant fleet,” Smith said in the February letter to Benedict.
In May, Naval Sea Systems Command posted a presolicitation notice at http://www.fedbizopps.gov to award Lockheed Martin a contract for Aegis development associated with Aegis Modernization (AMOD) Advanced Capability Build 12 (software upgrades and Technical Insertion (TI) 12 (hardware upgrades, including a base year (FY ’09) and three one-year options.
A second presolicitation notice for a sole source contract to Lockheed Martin was for procurement of 14 Multi-Mission Signal Processor sets, 13 Ballistic Missile Defense 4.0.1 sets, and multiple configurations of equipment upgrades as part of the AMOD, according to the solicitation.
A third notice was for Aegis support services.
Although the contracts had not been let, Raytheon felt it necessary to file a protest with the GAO, the industry source said.
A decision on the protest is expected by the end of the year, according to GAO’s website.