NATO radar-aircraft project gains broader political clout.

• Author: Erwin, Sandra I.

The NATO alliance, for more than a decade, has been fussing over the details of how to deploy a network of ground surveillance aircraft.

According to the latest plan, NATO wants a system in place by 2010. Although the schedule is ambitious, experts said, there are reasons to believe the alliance is now serious about making the financial and political commitment to a program that will cost several billion dollars, and likely will push the traditional boundaries of industrial cooperation.

An expanded role by NATO countries in peacekeeping missions and a desire to patch up fractured trans-Atlantic relations are among the motivating factors likely to spur the development of NATO's Airborne Ground Surveillance system, sources said.

The $4 billion AGS will be made up of manned and unmanned aircraft, equipped with an advanced imaging radar and moving target indicator. Two industry teams are competing for a February 2004 contract award. Their proposals are due in November.

The original plan for AGS was to purchase JSTARS aircraft (the U.S. joint surveillance target acquisition radar system), but that option was derailed, because it did not include enough workshare for European nations.

NATO solved that problem by mandating that any AGS industry proposal include an adequate work-share arrangement, proportional to the funding that a NATO country contributes to the program. Both teams wing for AGS have strong U.S. and European participation.

"Looking at NATO's AGS initiative today, after more than 10 years of debate, it survives at the top of NATO's collective acquisition list," said Charles L. Barry, a defense and international relations consultant. "Everyone agreed long ago it was needed, but disagreed on whose system and subsystems to buy."

Coming up with enough funds, Barry said, "has been the other big stumbling block."

Given NATO's track record with big-ticket programs, it is likely that the AGS delivery date will slip by a few years and that the budget will be tens of millions of dollars short, Barry said. Nevertheless, the outlook for AGS is promising, particularly since the program got high-level endorsement at the NATO Summit in Prague last year.

"Now, we see two competitors composed of transatlantic partners ... and we have the impetus of Prague beginning to bring a trickle of increased defense spending," he noted. Eventually, he said, even Germany will spend more on defense.

More importantly, Barry said, NATO has another pressing reason to...