Marconi aims for an Army call-up

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Marconi is in line for a £1bn contract to kit out the armed forces with hi-tech battlefield gadgetry.

Marconi is in line for a £1bn contract to kit out the armed forces with hi-tech battlefield gadgetry.

The beleaguered telecoms equipment maker is one of four companies shortlisted to equip 35,000 military personnel with guns allowing soldiers to see around corners, helmet visors with computer screens and voice-activated ammunition. Marconi is up against BAE Systems, Raytheon and Thales Defence for the Ministry of Defence (MoD) project code- named Future Integrated Soldier Technology (Fist).

Lieutenant Colonel Dave Stewart, project manager at the Defence Procurement Agency, said: "This is one of the MoD's top priorities. For some time we have been putting clever technology in tanks, aircraft and ships. Because of miniaturisation and further advances in technology, we are now able to equip soldiers. The days of kitting out a soldier with just a pair of boots and a rifle are over."

Officially, Fist's project value is £400m, but a source close to the bidding process revealed that the contract could be worth up to £1bn when additional services such as maintenance are included.

Pitted against three defence groups, winning the Fist project would be a coup for Marconi. After selling its defence interests in the 1990s, the company is now focused as a pure telecoms equipment maker.

But having made a series of expensive acquisitions during the telecoms boom, the company is struggling because many of its once high-spending customers have retrenched.

Fist was invented by Qinetiq, the former MoD laboratories. The winning bidder will need to develop the technology further to ensure it works with more than 50 telecoms and IT systems used by the RAF, Army and Navy

The shortlist of bidders is due to be reduced to two this summer. One of the criteria for assessing the bids will be the companies' financial strength. "The bidders need the staying power to manage the programme in the long term," said Lt Col Stewart.

The two shortlisted parties will each receive £250,000 to work on a trial project with the MoD. "We will be looking very closely at their behaviour, as we will have to develop a very close relationship with the winning contractor," said Lt Col Stewart.

The MoD hopes to award the contract early next year, run field trials in 2006 and have the equipment in operation by 2009.