BAE Systems Challenges Jammer Award, But Sees Plenty Of Other Electronic Opportunities

BAE Systems, Inc., the sprawling U.S. unit of the world’s second largest military contractor, disclosed yesterday it is formally protesting a Navy award of the Next Generation Jammer program to Raytheon, contending there were flaws in the selection process. However, company insiders say that even if their protest does not prevail, the company’s electronic-systems sector will perform well for the rest of the decade thanks to a diverse array of profitable programs. Because the jammer effort will take years to ramp up, it would not have had a material impact on financial results until late in the decade.

BAE Systems is heavily involved in all aspects of the electronic-warfare market, including electronic attack, electronic defense, and electronic-support measures. It also does extensive work in signals intelligence and cybersecurity, areas requiring skills that overlap with the electronic-warfare space. The company can’t publicly discuss large swaths of what it does due to security concerns, but insiders stress that the jammer contract was just one part of a very big military-electronics business. For instance, BAE provides electronic protection for the F-15, F-16, F/A-18, F-22 and F-35 fighters, not to mention the stealthy B-2 bomber and high-flying U-2 spy plane.

Being the incumbent supplier on so many big aircraft programs gives the company numerous opportunities for sustaining and upgrading electronic systems in the years ahead. BAE Systems is the only electronic-warfare integrator of fifth-generation fighters, aircraft whose low-observable designs require unique approaches to the installation and operation of electronic systems. Beyond that, the company is extensively engaged in the insertion of new electronic-warfare technology into legacy fighters so that they can maintain their combat edge. Some of this work is done for overseas allies, but will eventually feed back into the U.S. domestic market.

None of which means that BAE executives are happy about the jammer award. Although current incumbent Northrop Grumman has apparently decided not to mount its own protest of the Raytheon win, BAE Systems executives profess confidence that their offering was the most agile and affordable solution to Navy needs. Overturning the award will be tough because the Government Accountability Office that hears such cases only considers procedural aspects of the source selection, and the Navy’s acquisition community is the most professionalized of any service. BAE execs don’t question any of that, but say that in an area as arcane as electronic warfare, seeing all the implications of cutting-edge architectures isn’t always easy.