The Navy on Thursday awarded Raytheon [RTN] a $15 million firm-fixed-price contract for the Over-the-Horizon (OTH) missile program for use on Littoral Combat Ships (LCS) and the future guided-missile frigate (FFG(X).

The Navy released its request for proposals (RFP) for the OTM program last year and it closed last June.

The Navy's test of the NSM on a Littoral Combat Ship last year. Photo: US Navy
The Navy’s test of the NSM on a Littoral Combat Ship last year. Photo: US Navy

A Raytheon-Kongsberg Gruppern team was the only remaining competitor after Boeing [BA] and Lockheed Martin [LMT] both dropped out last May. Those companies said the requirements in the original RFP changed top level requirements that undervalued their bids (Defense Daily, June 23, 2017).

Raytheon and Kongsberg offered their Naval Strike Missile (NSM), the main weapon for Norway’s newest frigates and coastal corvettes. They first announced their team offering last June.

The award confirmed the Navy received only one offer in the competitive process.

This past February the Navy budgeted $18 million for the first eight OTH missiles in its fiscal year 2019 Defense Department budget request. The FY ‘18 budget documents showed the service plans to procure up to 64 OTH missiles through FY 2023 and the Navy expects each missile to cost about $2.2 million each (Defense Daily, Feb. 15).

Thursday’s award covers the manufacture and deliver of the OTH, which consists of encanistered missiles (EMs) loaded in launching mechanisms (LMs) and a single fire control suite (FCS).

The contract covers tactical, telemetered, and inert operational EMs, FCSs, LMs, Mission support equipment, training equipment and courses, engineering services, and other direct costs.  

The contract includes options that if exercised would increase the total value up to $848 million.

The majority of work will be performed in Kongsberg, Norway (75 percent) and Tucson, Ariz., (15 percent) and is expected to be finished by May 2020.

The total contract amount was obligated at award time and comes from FY ‘18 Navy research, development, test and evaluation (RDT&E) and other procurement accounts.