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Lockheed Wins Contract for New Spy Plane

Job Could Be Worth As Much as $6 Billion

By Renae Merle
Washington Post Staff Writer
Tuesday, August 3, 2004; Page E01

The Army awarded Lockheed Martin Corp. a contract yesterday that could be worth as much as $6 billion to develop spy planes that can detect enemy signals and track troop movements.

The unarmed plane, known as the Aerial Common Sensor, will fly 37,000 feet over the battlefield at 400 mph searching for enemy radio and radar signals. The new aircraft will replace two Army planes, Guardrail Common Sensor and Airborne Reconnaissance Low, and the Navy's EP-3E.


Lockheed Martin Corp. became the lead contractor in the Army's effort to develop more sophisticated surveillance aircraft. (Leslie E. Kossoff -- AP)

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The initial contract to design and develop the plane is worth about $879 million, but the program is expected to generate billions more once production begins. The Army and Navy are expected to order 38 and 19 of the planes, respectively, Army spokesman Timothy Rider said. It is unclear when the first plane will enter operation.

The Army has outgrown the existing airplanes, said John E. Pike, director of Globalsecurity.org, a research organization. "This would provide some of the earliest warnings of a surprise attack," Pike said. "The bigger airplanes get more notice, but these are really the backbone of the Army's signal intelligence."

The program signifies a "whole generation leap forward," said Stanton D. Sloane, Lockheed's executive vice president for integrated systems and solutions. "It's going to do great things."

The contract is considered a significant win for Lockheed, the Pentagon's largest contractor, in part because it based its proposed design on a foreign regional jet from Brazilian-based Embraer, which analysts said could have put it at a disadvantage. Lockheed's competitor, Northrop Grumman Corp., used a Gulfstream from General Dynamics Corp. of Falls Church for its bid.

Anticipating questions about foreign involvement in the project, Embraer has said it would lease a 71,000-square-foot manufacturing facility in Jacksonville, Fla., and plans to hire up to 200 employees. Major sections of the planes, including the wings, will be built overseas in countries such as Brazil and Chile, but the final product will be assembled in the United States, company officials have said. The jet program is Embraer's first Pentagon contract.

"We're happy to be part of the Lockheed team and to be providing our products now for the U.S. government," said Doug Oliver, Embraer's spokesman.


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