Dec. 29 (UPI) -- Lockheed Martin has been awarded a contract for upgrades and services for the AEGIS weapon system.
The $20.5 million contract, announced Thursday by Department of Defense, comes under a cost-plus-fixed fee, firm-fixed-price letter contract, which is a cost-reimbursement contract that provides for additional funds to Lockheed Martin depending on the fee that was negotiated at the inception of the contract.
The AEGIS Combat System Engineering Agent, commonly installed on U.S. destroyers, is a centralized, automated, command-and-control weapon system used to rapidly detect and track more than 100 targets at once.
The contract taps Lockheed Martin for "integrated logistics support and sustainment services for advanced capability build," along with low-cost replaceable spare parts.
Additionally, the contract will provide "logistics and sustainment support for the in-service AEGIS ship fleet in order to prevent delays in the delivery of the AWS upgrades and schedule and operational impacts to the affected ship availabilities."
The contract also includes an option that could increase the deal to more than $27 million if exercised.
Work on the contract will occur in Moorestown, N.J., and is expected to be completed by December 2018.
More than $5.4 million has been obligated to Lockheed Martin at the time of award. The funds come from multiple U.S. Navy fiscal year accounts and the obligated funds will not expire at the end of the 2018 fiscal year.
