(Bloomberg) -- Raytheon Co. has won a U.S. Army contest to provide a new radar system for Patriot missiles, beating out Lockheed Martin Corp. and Northrop Grumman Corp., said people familiar with the matter.

The Army is set to announce the deal as early as Thursday, said one of the people, who asked not to be named because the decision is still private. The firm fixed-price contract is initially set at about $384 million.

With the victory, Raytheon retains a key piece of one of its most important weapons franchises. The new radar, known as the Lower Tier Air and Missile Defense Sensor, is designed to detect enemy missiles that can be shot down by Patriots. The deal calls for Raytheon to build and test six radar prototypes within 36 months, delivering them for accelerated testing by 2022.

The program has “major U.S. Army and international foreign sales implications,” Cowen & Co. analyst Roman Schweizer said in a note to clients last month. “For incumbent Raytheon, it’s a strategic ‘must win.’”

Army Brig. General Brian Gibson said Tuesday that the winner had been selected. He didn’t identify the victor. The contract is being awarded under a streamlined procedure called “Other Transaction Authority,” or OTA, which is intended to accelerate programs outside traditional defense acquisitions.

The new system is “a radar that the U.S. Army wants to develop to essentially allow the Patriot system to continue to live on another 40 years” and counter new threats such as drones, Raytheon Chief Executive Officer Thomas Kennedy told analysts last month at a Morgan Stanley conference.

Raytheon declined to comment. The Waltham, Massachusetts-based company is in the process of merging with United Technologies Corp.

To contact the reporters on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net;Richard Clough in New York at rclough9@bloomberg.net

To contact the editors responsible for this story: Brendan Case at bcase4@bloomberg.net, Susan Warren

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