Two years ago, I described how a contract win for General Dynamics' (NYSE: GD) put me in a quandary.

On the one hand, GD's $40 million contract to produce Mobile Detection and Assessment and Response System robots for the Army was bad news for a stock I owned. MDARS looked like a direct competitor to the R-Gator robot being developed by iRobot (Nasdaq: IRBT) and Deere (NYSE: DE). On the other hand, General D was building the 'bots in my hometown of Westminster, Md. And how could I root against the home team?

Problem solved
For better or worse, it seems this "problem" is resolving itself. Last week, the General announced that unless it quickly receives the funding promised under the Pentagon's $237 million Autonomous Navigation System (which was supposed to be funded through March 2013), it will be forced to close down the project and lay off the 132 employees working on it.

If you keep close watch on the multiple rounds of funding cuts at the Pentagon (and don't we all?), you already know that the Pentagon canceled its next-gen Future Combat Systems Army revamp last year. You may not know that General Dynamics' ANS program was part of FCS. Originally awarded as a subcontract to lead FCS contractors Boeing (NYSE: BA) and SAIC (NYSE: SAI), ANS was supposed to build the "brains" for a whole series of new military robotic ground vehicles -- including Lockheed Martin's (NYSE: LMT) MULE utility vehicle. When FCS got cut, however, all the programs supporting it were thrown into limbo, including ANS. Now it looks like the Army has stopped sending installment payments as well.

Abandonment of ANS would be bad news indeed for Westminster -- the third round of layoffs at the GD plant in four months, and the biggest batch of pink slips by far. It could, however, be very good news for iRobot. Without Pentagon support, General Dynamics could be forced to abandon warbot development to iRobot -- which, despite FCS's cancellation, is still producing the small unmanned ground vehicle (SUGV) mini-warbots originally envisioned as part of FCS.

Seems to me that iRobot is winning this war -- without even firing a shot.