Lockheed Martin Space Systems Company, a Sunnyvale, Calif.-based unit of Lockheed Martin [LMT], won the biggest U.S. military satellite communications pact that likely will be awarded during the next two years when the U.S. Navy tapped it as the prime contractor for a $2.1 billion cost-plus-incentive-fee-and- award-fee contract for the Mobile User Objective System (MUOS). The MUOS initiative is the next generation narrowband military satellite communications system that will replace the operational UHF follow-on system, which is unable to provide sufficient capacity for the ground forces who use it. The new system would drastically increase capacity for narrowband mobile military communications and upgrade the technology now in use.

Lockheed fended off an unexpectedly strong rival bid from Waltham, Mass.-based Raytheon [RTN] to win the award. The seven-year contract includes options, which if exercised, would bring the cumulative value of this contract to $3.27 billion.

MUOS consists ofa multi-beam geostationary constellation with an on-orbit spare, the ground system supporting the satellite and network control, and a common air interface waveform.When combined with the user terminals and the U.S. Department of Defense (DoD) teleport, MUOS comprises an end-to-end system that will provide DoD narrowband (as much as 64 Kbps) beyond line-of-sight communication services.

Lockheed and its subcontractors will parcel out the work to Sunnyvale, Calif. (31 percent); Newtown, Pa. (29 percent); El Segundo, Calif. (12 percent); Scottsdale, Ariz. (27 percent); and Aurora, Colo. (1 percent). That work is to be completed by March 2011. If all the options are exercised, MUOS efforts will continue through 2015.

(Steve Tatum, Lockheed Martin, 408/742-7531)