Westinghouse unit fails to win $840 million pact for air system Firm was considered front-runner in bidding.


A Maryland unit of Westinghouse Electric Corp. failed to win a $840 million contract for which it had been considered the front-runner, but a spokesman said the company plans no layoffs as a result.

The Air Force last week selected Hughes Aircraft Co. of Fullerton, Calif., to complete work on an air defense system for Saudi Arabia.

The Boeing Co. of Seattle had been working on a contract to produce the system, dubbed the Peace Shield. But the Air Force, alleging poor performance by the contractor, canceled the deal and last year withheld $240 million in payments.

It requested and received bids from other contractors, including Westinghouse, to complete the system. Westinghouse was a subcontractor to Boeing on the original project and was considered the bidder to beat, said Dan Reeder, spokesman for Hughes.

A spokesman for Westinghouse, Jack Martin Jr., said "suffice it to say we were disappointed."

But he said he knew of no layoffs planned because of the loss of the work.

Westinghouse's Electronic Systems Group, which is based near the Baltimore-Washington International Airport, earlier this year laid off workers due to cutbacks in defense spending.

The Peace Shield is a ground-based network of 17 radar sites and five command centers being designed to warn the Saudis of incoming air attacks and to coordinate air defenses.

Hughes will probably not hire any additional workers but will have up to 500 employees assigned to the project at its peak in the next few years, Reeder said.

The contract is the largest ever awarded the Hughes ground systems group, Reeder said.

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