WASHINGTON (Reuters) - The U.S. Navy on Thursday awarded Raytheon Co (RTN.N) a contract valued at up to $1.6 billion to design a next-generation air and missile defense radar for use on Arleigh Burke destroyers starting in 2016.
Raytheon beat out Lockheed Martin Corp (LMT.N) and Northrop Grumman Corp (NOC.N) to build the new radar for the Aegis combat system.
Under the contract, Raytheon will build and test the new air and missile defense radar (AMDR) that will integrate with the existing AN/SPQ-9B X-band radar.
The Navy awarded Raytheon an initial design contract worth $386 million, but said the deal included options for procurement of up to nine radars, which could bring the value of the deal up to $1.6 billion.
"We are confident in our AMDR solution, leveraging our decades of radar development and integration experience," said Raytheon spokesman Dave Desilets. "We are eager to move forward and deliver this exceptional capability to the Navy."
In July, Raytheon also beat its rivals to win a key Navy contract to develop a next-generation electronic jammer. That contract has been challenged by BAE Systems Plc (BAES.L), which filed a protest with the U.S. Government Accountability Office.
It was not immediately clear if Lockheed or Northrop would protest the loss of this contract.
Lockheed issued a statement late Thursday saying it was very disappointed by the decision and remained convinced its proposed solution was the most affordable.
"We will await the Navy's de-brief in order to understand why we were not selected and evaluate our next steps," said Lockheed spokesman Keith Little.
Naval Sea Systems Command said the Raytheon contract included engineering and design work that would lead to a preliminary design review and would culminate with testing and acceptance of the new AMDR S-band radar and a new radar controller after testing in Hawaii.
(Reporting by Andrea Shalal-Esa. Editing by Andre Grenon)