Boeing wins $3.89 billion Navy contract - East Valley Tribune: Business

Boeing wins $3.89 billion Navy contract

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Posted: Tuesday, June 15, 2004 6:14 am | Updated: 5:05 pm, Thu Oct 6, 2011.

WASHINGTON - The Navy has awarded Boeing Co. a $3.89 billion contract to develop a long-range patrol plane to replace an aircraft that once was the sea service’s main submarine hunter, the Pentagon said Monday.

Boeing will base the new plane on its 737 airliner. The Chicago-based company was chosen over rival Lockheed Martin for the project, which could be worth $44 billion by the mid-2030s.

The new plane, called a Multimission Maritime Aircraft, will replace Lockheed’s P-3 Orion, a venerable design that has been in use since 1962. The P-3 production line shut down in 1990, and Navy officials said the average age of the 196 aircraft still in the inventory is 26 years. The plane developed into an airborne battlefield observation platform, including missions in Afghanistan and Iraq.

Like the P-3, the new plane will be designed to hunt submarines and surface vessels and conduct longrange surveillance. Unlike the P-3, the plane will be a jet instead of a turboprop.

John Young Jr., the Navy’s assistant secretary for research, development and acquisition, said during a news conference that he expects the new plane to be ready to deploy by 2013. According to Young, Boeing said it could be finished a year sooner.

The initial $3.89 billion development contract includes money to build only three demonstrator and test aircraft, Young said. It also includes $314 million in incentives if Boeing completes work on schedule, said Thomas Laux, a Navy executive overseeing the program.

The production run of 108 combat-capable planes is expected to cost $20 billion; including development, production and at least 20 years of maintenance, the program will run to $44 billion.

Boeing unit Integrated Defense System of St. Louis won the contract. The airframes will be built at the Boeing plant in Wichita, Kan., and completed in Washington state.

‘‘This is a huge win for Boeing and its employees in Washington and around the country,’’ said Sen. Patty Murray, D-Wash.

Young suggested Boeing’s proposals for its production line gave it the edge over Lockheed Martin.

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