Raytheon Tops Boeing for FAB-T Production Contract

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WASHINGTON — Raytheon Co. has won a hotly contested strategic military satellite terminal contract after fighting its way into a competition with the original prime contractor, Boeing.

In a decision announced June 2, the U.S. Air Force awarded Raytheon a $298 million contract modification on the Family of Beyond Line-of-Sight Terminals program, a deal that includes several additional production options, according to a Defense Department press release. Raytheon and Boeing had both been working since September on preproduction planning contracts for the program.

The long-delayed selection wraps up a decade-long search by the Air Force for the terminals and is one of the biggest space-related defense contracts expected this year.

Boeing Network and Space Systems of Arlington, Virginia, and McKinney, Texas-based Raytheon Network Centric Systems were developing competing FAB-T systems, which will enable the president to communicate with the national command authority in the event of a nuclear war. The terminals are designed to operate with the Air Force’s Advanced Extremely High Frequency constellation of highly secure, jam-proof strategic and tactical communications satellites.

The FAB-T program, which has already cost $4.6 billion, has been in development for more than 10 years. Boeing initially was selected as prime contractor, but the Air Force funded a competing development effort by Raytheon starting in 2012 after Boeing ran into cost growth and delays.

Air Force acquisition officials have complained that terminal programs are among the costliest in the space business.

FAB-T program officials had assured the Government Accountability Office that regardless who won the prime contract, “there will be a stable and mature design, with a reliable manufacturing process.”

The base contract was expected to include 84 ground and airborne command post terminals, but the Defense Department’s press release announcing Raytheon’s selection did not specifically include this information.

The contract includes an option to outfit strategic bombers and electronic intelligence aircraft with the capability that can be exercised only after Raytheon reaches a milestone at the end of the development phase on the command post terminals, the release said.

Raytheon had said its previous work on other military satellite terminals, including the Secure Mobile Anti-Jam Reliable Tactical Terminal mounted on Humvees — this was the first industry terminal to connect to the AEHF satellites — and the Navy Multiband Terminal, set the company up for success in the FAB-T competition. In December, Raytheon also won a $134 million Air Force contract to develop the Global Aircrew Strategic Network Terminal, which transmits emergency messages to air crews during nuclear missions.

In all, Raytheon has delivered more than 500 terminals to the Defense Department.

The FAB-T program was among the most closely watched competitions this year in the space arena. Industry officials have said a bid protest, regardless of who won the contract, is likely.

In a prepared statement, Boeing spokesman Richard Esposito said the company “is disappointed by the decision. We will request a formal debrief from the Air Force and will determine a path forward after that formal debrief is completed.”