Boeing Project Moves Ahead

Boeing Co., the second-largest U.S. defense contractor, will proceed to the design and testing phase of the Army’s $100-billion networked warfare project after its blueprint for the system was approved.

Subcontractors including General Dynamics Corp., Lockheed Martin Corp., Raytheon Co., Northrop Grumman Corp. and Computer Sciences Corp. will begin developing computer-linked manned and unmanned air and ground weapons systems that make up the Army’s Future Combat Systems. The first field test is scheduled for next year, Chicago-based Boeing said Monday in a statement.

Future Combat Systems, the Pentagon’s second-most-costly program, will be a family of faster, lighter battle vehicles linked by high-speed, digital communications and new combat radios. Boeing plans to deliver the first weapon platform in 2008 and release the others in two-year intervals with network capability between all the weapons systems planned for 2014.

The program, which is about two years into its $20.9-billion development contract, passed a five-day review by the Army, Department of Defense and Government Accountability Office to verify that Army requirements can be met and that the program is meeting cost, performance and schedule targets.

Boeing’s base fee will be 3% of the $21-billion contract, down from 10%, and its potential bonus is 12%, up from 5%, program manager Brig. Gen. Charles Cartwright said last month.

Boeing shares fell $1.19 to $66.27 on Tuesday.