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Missile Defense Agency Buys a Billion Dollars Worth of Interceptors

by: Matthew Potter
April 1, 2011

Category: Alabama, Business Line, Companies, Congress, Contract Additions, Contract Awards, Countries, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, MDA, missile defense, production program, Raytheon, S&T, Services, States, U.S. Army, U.S. Navy, UAE | RSS 2.0

Even with the current budgetary situation in the United States where the Defense Department and the rest of the Federal government is operating without a budget and faces a possible shutdown in a week’s time the U.S. continues its operations in Afghanistan, Iraq and Libya as well as working on existing defense programs. Part of this is the Missile Defense Agency (MDA) keeping its different programs going with the announcement of two major contracts in the last few days.

First Raytheon (RTN) received an order for 24 STANDARD Missile-3 (SM-3) Block IB missiles for use on Navy cruisers and destroyers to intercept ballistic missiles. This contract is worth about $312 million. The SM-3 is an evolutionary design based on the SM-2 air defense missile in use by the United States and some Allies since the early Seventies. In the SM-3 configuration it carries an exo-atmospheric kinetic kill vehicle that will engage the target at high altitude. The MDA and Navy have been developing and testing the AEGIS weapon system based program since the mid-Nineties.

Raytheon is also investing several million dollars in a new facility at Redstone Arsenal, Huntsville, AL to manufacture the SM-3 and its replacement the SM-6. It is expected that ground breaking on the complex will happen fairly soon.

Lockheed Martin (LMT) who manufactures missiles for the Army’s PATRIOT PAC-3 and THAAD systems also received a production order. This was for 48 THAAD missiles, launchers and support equipment. That contract has a value of almost $800 million. The Terminal High Altitude Area Defense (THAAD) is the longer ranged of the Army’s ground based programs. This contract represents a major expansion of the number of THAAD units for the Army. The United Arab Emirates (U.A.E.) has also looked at buying the THAAD system to provide protection for itself.

If you are doing the math that is over a billion dollars for 72 missiles and related support equipment and services. Missile defense is neither cheap nor easy and indicates the U.S. intent to continue development and deployment of their layered defensive system.

Photo from the U.S. Missile Defense Agency flickr photostream.

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