Hughes Unit Wins Record $837-Million Contract : Military technology: Fullerton Ground Systems Group’s largest-ever award is for Saudi Arabian air defenses.

Hughes Aircraft Co. announced Wednesday that it has won an $837-million contract to build a new air defense system--nicknamed Peace Shield--for Saudi Arabia, the largest award received by the company’s Fullerton division in its 34-year history.

Officials for Hughes’ Ground Systems Group said Saudi Arabia’s planned military fortification is unrelated to the Persian Gulf War. The Hughes system, however, would warn the Royal Saudi Air Force of incoming enemy aircraft and work with software programs that track Scud missiles and the like.

Scheduled for completion in the mid-1990s, the Hughes system would mesh software programs, commercial computers and military display systems. The command and control workstations would be similar to those used by air traffic controllers, Hughes officials said.

Peace Shield will enhance the kingdom’s present air defense systems.

“They don’t have a fully capable air defense system such as the U.S. and NATO,” said Ground Systems President Scott Walker.

Hughes has built more than 30 air defense systems for 23 countries, including England, Canada and Japan, but the Saudi system would supersede them all.

“This is the largest in this field that we’ve built,” said Hughes spokesman Dan Reeder.

The second-largest contract Hughes received for air defense was a $500-million award to enhance NATO’s system, a project completed in 1988.

Boeing originally won the Peace Shield pact in the mid-1980s--valued then at $1 billion--after fierce competition with Hughes, but lost a portion of the contract in January. Boeing is still working on “the installation and checkout of radars” plus a system for the AWACS aircraft, according to a January report in Aerospace Daily, a trade publication.

The U.S. Air Force, which acts as an intermediary in some foreign military sales, said Boeing had failed “to deliver supplies and services within the time specified in the contract” and that its actions could “endanger final operational capability.”

Despite the size of the Saudi contract, Hughes officials said they don’t expect a flurry of hiring. The company has laid off about 500 workers in Fullerton this year.

Walker said Peace Shield “would stabilize our existing employment.” The Ground Systems Group employs about 9,000.