Pentagon picks Boeing for anti-missile system Lockheed Martin-led group is passed over


WASHINGTON -- The Pentagon chose Boeing Co. yesterday to begin assembling a national shield against ballistic missile attacks, shunning a team of companies led by Bethesda's Lockheed Martin Corp.

The three-year, $1.6 billion contract gives Boeing the responsibility to marshal a wide range of companies and hardware so the military can decide in the year 2000 whether to put the National Missile Defense System into use.

If the Pentagon exercises several options to move forward, yesterday's contract could be worth up to $5.2 billion.

Lockheed Martin had joined with Raytheon Co. and TRW Inc. to form the United Missile Defense Co. in pursuing the contract.

Those companies have almost all the nation's current contracts related to ballistic missile defense, while Boeing's role in the field has been limited.

Lockheed Martin has had highly publicized problems with an Army ballistic missile defense program, though, leading some experts to speculate that the company's failure would hurt its chances for a national contract.

Air Force Lt. Gen. Lester L. Lyles, director of the Ballistic Missile Defense Organization, saidyesterday that while Lockheed Martin's past performance was a consideration in making the award, other factors were more important -- such as cost, technical details and management.

"It was a clear decision and Boeing clearly was the winner from a best-value [perspective]," Lyles said.

Boeing's program manager, John B. Peller, disputed the notion that his company was an underdog, noting that it has conducted research in the field for many years.

Peller also pointed out that Lockheed Martin's partners, TRW and Raytheon, will now become subcontractors to Boeing on the program.

"So the difference really came down between Lockheed Martin and Boeing," Peller said.

United Missile Defense Co. canceled a telephone news conference, and officials there could not be reached for comment. Executives of Lockheed Martin also could not be reached for comment last night.

Industry experts say that while the win is a coup for Boeing, Lockheed Martin is not seriously harmed by losing because it stands to be involved in some of the programs that make up the overall system.

"It's more of a psychological win than it is an economic win," said NTC Paul Nisbet, a financial analyst with JSA Research Inc. "I think the likelihood is that it will never get into production anyway because it is too controversial."

The Pentagon has been trying since President Ronald Reagan unveiled his "star wars" system in 1983 to come up with a way to combat ballistic missile attacks. About $50 billion has gone into the overall effort since then, and no working system has been produced.

The military has decided to hand responsibility for assembling the complex system to a private company.

The Defense Department history of integrating such hardware into a single network "is not very shiny," Lyles conceded yesterday. He said he expects Boeing to do so much more efficiently.

The National Missile Defense System the Seattle-based company will be working on is much less ambitious than what Reagan originally envisioned. Instead of countering a huge onslaught of warheads, this system will be designed to knock out only a limited attack, such as an accidental missile launch by Russia or a terrorist launch by a rogue nation.

Even so, the National Missile Defense System will involve a complex network of satellite sensors, ground radars, and

communications systems to alert and guide anti-missile missiles housed at a central location. Those missiles will have to be able to knock a hostile rocket from the sky.

While only a handful of test shots have succeeded in doing that over the years, both the military and Boeing say it can be done. The big question, all sides agree, is whether it can be done as soon as envisioned -- possibly by 2003.

"That's probably the biggest risk, can we really do it that fast," Peller said. "We will shoot for it."

Pub Date: 5/01/98

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