Lockheed Martin Corp. and a Northrop Grumman Corp. shipbuilding subsidiary won a $17 billion contract yesterday to expand and modernize the U.S. Coast Guard's fleet of ships and aircraft.
The deal will enable the Coast Guard to more easily stop ships away from the U.S. coastline; instantly run lists of crew members and cargo shipments through intelligence databases; and check for biological, chemical or radiological materials.
Lockheed will develop the sophisticated communications equipment that the Coast Guard will use in the program. Northrop Grumman Ship Systems Ingalls Operations of Pascagoula, Miss., will build the ships.
The contract calls for the construction of more than 90 ships and more than 200 aircraft and logistics systems to protect the United States from 50 or more miles offshore.
The companies, through a joint venture, Integrated Coast Guard Systems, will split the revenue evenly.
The contract calls for spending $11 billion on equipment and $5.91 billion on operations, maintenance and other costs, and may extend for 30 years, Transportation Department spokesman Bill Adams said.
"It's a fantastic win," said Ken Ross, spokesman at Lockheed's Moorestown plant. It "truly defines us as the preeminent large-scale systems integrator," he said.
Ross said 200 employees at the Moorestown center focused primarily on the proposal and would work on the project. No additional staff is expected to be hired in Moorestown.
"This is a very big win for the two companies because it means that they own the Coast Guard business for a generation to come," said Loren Thompson, a defense analyst at the Lexington Institute, an Arlington, Va.-based industry group.
The Moorestown plant provides surface ship and submarine weapon systems, anti-submarine warfare and ocean surveillance systems, and ship systems integration services.
Lockheed and Northrop Grumman will manage the work of more than 100 companies in 32 states and abroad.