New Ground Based Missile Defense Contract Award Delayed

by: Matthew Potter
June 9, 2011

Category: Alaska, Boeing, Business Line, Companies, Congress, Contract Additions, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, Lockheed Martin, MDA, missile defense, Proposal, Raytheon, Services, States | RSS 2.0

The United States has been developing missile defense systems since the Eighties when President Reagan announced the “Star Wars” Strategic Defense Initiative (SDI). Over the last thirty years a variety of land and ship based programs have been initiated and some have come to fruition. In the last decade the Bush Administration put a great deal of effort into the Ground Based Mid-course system that currently has missiles based in Alaska and sensors across the world with a goal of protecting the United States from attack.

The Obama Administration changed the plans for this system by eliminating the missiles that would have been installed in Eastern Europe and some radar sites. They shifted their emphasis to the Navy’s ship based program. The existing parts of the Ground Based Mid-course still are in use despite this change in focus.

Boeing (BA) was the lead contractor through the development, production and deployment phase of the program. Last year the Missile Defense Agency decided to have a competition to see who would take over the maintenance and sustainment of the system. Proposals were received by Boeing and a team of Raytheon (RTN) and Lockheed Martin (LMT). Raytheon has been involved in building the radars for the system and Lockheed the interceptors for other Army and Navy programs.

The new award was supposed to be made this summer for the multi-billion contract. Now they have decided to delay that decision for about six months until November. This will push it into the next Fiscal Year, 2012, and may have been made due to the current budget situation or the government may need more time to evaluate the proposals.

Delays in an award of this size are not uncommon but it does mean that the incumbent, Boeing, will maintain their existing work and contract for another few months which will help that company’s revenue and earnings. The delay though will mean the two bidders will be on the edge of their seats for an announcement for another few months.

Photo from U.S. Missile Defense Agency’s Flickr photostream.

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