Lockheed Martin [LMT] on Tuesday formally protested the Navy’s decision earlier this month to award the contract for the new Air Missile Defense Radar (AMDR) to Raytheon [RTN].

Lockheed Martin confirmed it filed the protest with the Government Accountability Office (GAO), saying its proposal was not properly evaluated. Northrop Grumman [NOC] also lost the competition but has not announced its intentions.

Raytheon’s rendering of AMDR.

“After careful consideration, Lockheed Martin has protested the Navy’s award of the Air and Missile Defense Radar (AMDR) contract,” spokesman Keith Little said. “We submitted a technically compliant solution at a very affordable price. We do not believe the merits of our offering were properly considered during the evaluation process.”

Ralph White, the head of the GAO’s protest office, said he expects the agency to rule on the challenge by Jan. 30.

The Navy awarded Raytheon an initial $156.9-million contract on Oct. 10 that carries options that could reach a combined total value of $1.6 billion.

AMDR is to be installed on the Navy’s fleet of Arleigh-Burke-class (DDG-51) guided missile destroyers, starting with the Block III version of the ship in 2016. The AMDR award was a major victory for Raytheon in the highly anticipated outcome of a competition that began when the three firms submitted their bids in July 2012.

After the award Lockheed Martin said it was “very disappointed” with the Navy’s decision to go with Raytheon.

AMDR is planned to replace the Lockheed Martin-built AN/SPY-1 radar that operates in the Aegis combat systems for air-theater defense and ballistic missile defense. Aegis is also built by Lockheed Martin.

Lockheed Martin received a briefing from the Navy on the decision on Thursday, Little said. The protest will likely force the Navy to issue a stop-work order on AMDR until the GAO reaches a verdict. Raytheon said it’s confident the award will be upheld.

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"We remain confident in our proposed solution and we’re eager to move forward and deliver this much needed AMDR capability to the Navy," spokeswoman Carolyn Beaudry said. "We’ll trust the process and will work closely with our customer to mitigate any resulting delays once resolved." 

Raytheon’s cost-plus-incentive contract award covers the engineering and modeling development phase, integration, testing and delivery of the S-band AMDR and radar suite controller, and options for low-rate initial-production beginning in 2017, the Navy has said. It is also to integrate the existing Northrop Grumman-built AN/SPQ-9B X-band radar to give it dual-band capability.