Raytheon Co. yesterday won a $3 billion Navy contract to develop radar and other systems for a new class of destroyers that will pioneer technology for a variety of ships in coming decades.
The award is one of the Waltham company's largest ever. It is a follow-on to previous contracts the Naval Sea Systems Command has given Raytheon for the destroyer program, called the DD(X). The new destroyers are being envisioned as the first vessels in the service's 21st century fleet of high-tech fighting ships.
But the contract comes as concerns mount in Congress over the rising cost of the program, now estimated at more than $3 billion a ship, and the fates of competing shipyards in Maine and Mississippi where the destroyers would be built.
Most of the work on the DD(X) systems is being done at Raytheon sites in Tewskbury and Portsmouth, R.I. Dan Smith, the president of Raytheon's integrated defense systems unit in Tewksbury, said yesterday the new award would take the program from development into production and carries the potential for new jobs. But he insisted it was too soon to say how many jobs would be added, when, or where. The Navy contract is scheduled to run through December 2009.
''It's a big contract," Smith said. ''It's got a lot of legs."
Under the program, Raytheon is developing five systems for the new destroyers that improve on existing technology. The five systems are: radar; sonar; the ships' computing network; an external network enabling them to communicate with other ships, shore stations, and aircraft; and a missile launcher that can target other ships and ground installations. Raytheon, which is working with several engineering subcontractors, will also be the systems integrator, making all the technology work together.
Raytheon has about 1,500 engineers working on DD(X). The company employs 80,000 workers worldwide, including 11,000 in Massachusetts.
Jon Kutler, chief executive of Jefferies Quarterdeck, a New York investment bank specializing in aerospace and defense, said the DD(X) program is especially important to Raytheon because the Navy plans to use similar, if not identical, technology on a range of future classes of ships, from aircraft carriers to amphibious assault vessels. And Raytheon would be in a position to supply the technology.
''DD(X) is a technology testbed," Kutler said. ''This is the Navy's platform for next-generation weapons systems. The expectation is that there will be many derivatives. So the significance of this contract for Raytheon goes well beyond the dollar amount of the award."
But aspects of the DD(X) program are being debated in Washington at a time when the Pentagon is rethinking its strategy, closing bases, and moving toward a leaner and more flexible military.
The Navy initially wanted to award production of the destroyer to a single shipbuilder, either the General Dynamics shipyard in Bath, Maine, or a Northrop Grumman yard in Pascagoula, Miss. Earlier this month that winner-take-all approach was vetoed by Congress, which fears the erosion of the defense industrial base and wants both sites to share the shipbuilding work. Navy officials are now working with Congress to determine how many ships will be built at which yards.
The program's rising cost also has become a bone of contention in Congress. In the new defense authorization bill, the House Armed Services Committee has recommended cutting the cost substantially to $1.7 billion a ship. ''They're saying that this price is completely unacceptable, and the Navy really needs to go back to step one and try again," said Winslow Wheeler, visiting senior fellow at the Center for Defense Information, a Washington research firm.
At the same time, members of the Senate Armed Services Committee have endorsed the program at the original price level. Representatives of the two panels are expected to confer over the summer to iron out their differences.
Lieutenant John Spiers, a Navy spokesman at the Pentagon, said the service awarded the Raytheon contract yesterday ''to ensure development work on critical DD(X) systems and technology remains on schedule" while other issues are being resolved. Spiers said the Navy now plans to buy five of the new destroyers by the end of the decade. Initially, the service had envisioned buying two dozen destroyers.
''DD(X) is tremendously important," Spiers said, noting that DD is the Navy's designation for destroyer. ''It's the first of a family of ships that address the threats we face in the 21st century."
Raytheon's Smith said the company's new technology would enable Navy sailors to battle both conventional forces and smaller bands of terrorists. ''This is a multimission ship designed and intended to be the cornerstone of the fleet in the next 50 years," he said. ''You have to be ready for blue water conflict or the threat of assymetrical warfare."
The company won the original DD(X) development contract four years ago in a competition with Lockheed Martin Maritime Systems and Sensors of Moorestown, N.J. , which is now a subcontractor on the project. Also working with Raytheon are United Defense LP of Minneapolis, Northrop Grumman Mission Systems of King George, Va., and Ball Aerospace & Technology Corp. of Westminster, Colo.
Robert Weisman can be reached at email@example.com.