Boeing [BA] is considering bidding on the Navy’s next contract for the Aegis Combat System, the company said yesterday, adding a potential new twist to the competition in the multi-billion dollar program.

Lockheed Martin [LMT] inherited Aegis when it acquired Martin Marietta in 1995 and has been the sole contractor for the system ever since,  but the Navy wants to reopen the contract to a competitive process and issued a request for proposals (RFP) earlier this year, setting a Nov. 3 deadline. Raytheon [RTN], which has announced its intention to bid, was thought to be the only firm seriously challenging Lockheed Martin.

“Boeing is currently assessing the U.S. Navy’s RFP for the Aegis Combat Systems Engineering Agent,” Boeing spokesman Scott Day said in an emailed statement to Defense Daily.

“Boeing has successfully delivered open architecture mission systems to the Navy and would be able to effectively support the Navy’s goal to enhance the capabilities of the Aegis system to meet future threats and challenges,” he said. “We expect to announce our intentions on whether to compete for the contract at a later date.”

Losing the contract for the Aegis Combat System would be a major blow for Lockheed Martin, but the firm has remained confident it will win and has welcomed the competition as added incentive to evaluate and maximize the performance and affordability of its system.

“We’re not resting on our laurels,” Carmen Valentino, Lockheed Martin’s vice president for Future Surface Combatant Programs and lead for drafting its proposal, told Defense Daily in an interview Monday at its Moorestown, N.J., facility.

“We really feel we have the experience base,” he said, later adding that the “competition has validated a lot of things for us.”

“We’re not afraid to compete. We like it,” he said. Learning of Boeing’s interest in joining the bidding, Scott Lusk, a Lockheed Martin spokesman, said yesterday: “We embrace competition and we look forward to the submitting our proposal for CSEA.”

The next contract will be lucrative as the Navy has continuously looked to upgrade the Aegis system on its fleet of Arleigh Burke-class (DDG-51) destroyers and Ticonderoga-class (CG-47) cruisers, the two families that use the advanced command and control system that harnesses radar tracking to guide weapons to targets.

Lockheed Martin also builds Aegis Ballistic Missile Defense, the cornerstone of the Navy’s sea-based BMD program, under a separate contract with the Pentagon’s Missile Defense Agency. The Navy plans to begin upgrading to the Multi-Mission Signal Processor (MMSP) on ships next year, which will effectively merge functioning of the combat system with the missile defense version, under the current contract with MDA.

MMSP is designed to increase processing capacity to balance the use of the radar for both missions, said Jim Sheridan, Lockheed Martin’s director for Aegis modernization, said in Moorestown.

The DDG-113 will be the first of the Arleigh Burke-class to be equipped with the MMSP by the time of its commissioning, Sheridan said. The Navy in June awarded construction of the DDG-113 to Huntington Ingalls Industries [HII]. It will built at the firm’s Pascagoula, Miss., yard.