Northrop Grumman gained a $1.7 billion (€1.2 billion) contract to supply five Block 40 Global Hawk UAVs with advanced multi-platform radar technology insertion program (MP-RTIP) radars for the NATO Alliance Ground Surveillance (AGS) program. The deal had been in negotiation for many years and was finally signed during this week’s NATO Summit in Chicago.

Under the agreement, Northrop Grumman is the prime contractor to supply the Global Hawk air vehicle and MP-RTIP ground surveillance radar, developed with Raytheon. Industrial partners from the 13 nations represented by Nagsma–including Cassidian, Selex Galileo and Kongsberg–will provide the system’s ground element, consisting of transportable and mobile ground stations and remote workstations for higher echelon commanders. The main operating base will be Sigonella, Italy, expected to be operational in 2017.

The signing of the AGS procurement contract was one of the major developments at the summit, which also saw the alliance agree on a strategy to transition security in Afghanistan to Afghan forces by the end of 2014. At Chicago, NATO declared an interim ballistic missile defense (BMD) capability, through a command and control system that links basic BMD assets owned by a few members. It made a similar declaration 17 months ago, and admitted that full coverage for all NATO populations in Europe could not be achieved before the end of the decade.

The NATO contract award supports continued Global Hawk production at Northrop Grumman’s manufacturing facility in Palmdale, Calif., where the company is also building the U.S. Navy’s broad area maritime surveillance system (Bams) and German Euro Hawk versions of the UAV.

Northrop Grumman still hopes that a U.S. Air Force decision earlier this year to terminate the Global Hawk Block 30 program–with 14 of 18 contracted aircraft already delivered–will be modified. The company told AIN it is “pleased” that House committees have added funds to the defense budget keep the UAVs in service. Pentagon officials have suggested to Congressmen that the surplus Block 30s might be sold to Canada, Japan and/or Korea, AIN has learned.

The House mark-up also included funds to keep the C-27J Spartan airlifters in service, contrary to the Pentagon’s wishes. The House version of the FY2013 Defense Budget may not survive consideration by the Senate.