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Army Acts to Speed Work on Communications System

September 15, 2004|From Bloomberg News

General Dynamics Corp. and Lockheed Martin Corp. will stop competing and instead work together on a $12-billion program to design an Army communications network in an effort to expedite development.

The Army's proposal to have both companies work on the project was approved Friday by Michael Wynne, the Defense Department's acting undersecretary for acquisition, said an e-mail statement from Pentagon spokeswoman Cheryl Irwin.

The Warfighter Information Network-Tactical will be a high-speed communications network linking the Pentagon with troops in the field. A variety of new systems will plug into the network, including the $92-billion Future Combat Systems family of armored vehicles being developed by Boeing Co. and the $5.8-billion Joint Tactical Radio System being developed jointly by Lockheed, Boeing, General Dynamics and other companies.

"This is an enormously critical program because it's the backbone for the rest of the Army's modernization," said John Pike, an analyst at defense research group

Bethesda, Md.-based Lockheed and Falls Church, Va.- based General Dynamics had been developing competing designs for the network under three-year contracts, and the Army had been expected to select one company for final development next year.

Under the new arrangement, General Dynamics will lead the team, and Lockheed will be a major subcontractor responsible for about 50% of the work, the Army and General Dynamics said in separate statements.

The combined effort will allow the Army to settle the network architecture within the next four months, the Army statement said, quoting Col. Angel Colon, the network's project manager.

On the New York Stock Exchange, Lockheed shares gained 7 cents to $53.99 and General Dynamics rose 1 cent to $97.45.

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