Boeing-Led Contract Moves Ahead

Boeing Co. and Science Applications International Corp. led a group of defense contractors who received an eight-year, $14.7-billion contract from the Army to manage the design, development and early production of a new family of armored vehicles and drones, the Pentagon said Wednesday.

The contract for the Future Combat System, which was expected, sets program management tasks, schedules and milestones for which Boeing, and San Diego-based SAIC will be held accountable as the Army moves ahead with its biggest program ever. Boeing already had been the lead contractor on the initial contract for the program and analysts expected the Pentagon to give it the green light.

The Army wants to produce by 2010 a family of 18 types of smaller, lighter, armored vehicles designed to outmaneuver an enemy and destroy it with long-range weapons. The goal is to create a highly mobile force linked by a new satellite-based communications system to network with Army and Air Force weapons, spy planes and electronic surveillance sources.

The FCS program ultimately will cost $92 billion, second to only the $199-billion Joint Strike Fighter among the Pentagon’s 73 major programs.

The $14.7 billion will be paid out incrementally through 2011, with about 21 subcontractors receiving about $10 billion and Boeing and SAIC receiving the rest. The major subcontractors include Century City-based Northrop Grumman Corp., Lockheed Martin, General Dynamics and Raytheon.

Separately, European aircraft maker Airbus said it had been gathering information on public aid to Boeing to check whether Washington has breached an accord with Brussels. Airbus is concerned about pledges of U.S. government support for its U.S. rival’s planned new fuel-efficient passenger jet, the 7E7 Dreamliner.

Under terms of a 1992 bilateral accord, the U.S. and EU pledged that government loans would not be allowed to exceed 33% of total investment by respective aerospace firms. Both sides repeatedly have accused each other of breaking the deal.

The Dreamliner is planned to take to the skies in 2008, if it gets approval from Boeing’s board.

Shares of Chicago-based Boeing closed up 29 cents Wednesday to $38.87 on the New York Stock Exchange.