MDA To Award $3 Billion Interceptor Production Contract to Raytheon

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WASHINGTON — The U.S. Missile Defense Agency (MDA) plans to award Raytheon a sole-source contract worth as much as $3 billion for production of the Standard Missile (SM)-3 Block 1B interceptor, according to an Oct. 15 notice of intent posted to the Federal Business Opportunities website.

The contract, which could take effect as early as 2015, will include the production and integration of 216 interceptors over three years, the notice said. Raytheon Missile Systems of Tucson, Ariz., has already produced 15 of the sea-based interceptors for developmental testing.

Raytheon “is considered the only source that currently possesses the in-depth technical knowledge of the system to satisfactorily perform the work,” the notice said. “This expertise cannot be attained by any other contractor within the anticipated period of performance without duplicating costs and creating a delay in fulfilling MDA’s requirements.”

The SM-3 Block 1B, one of two variants of the SM-3 interceptor family still in development — the Block 1A is deployed and operational aboard U.S. Navy ships — failed in a September 2011 test, prompting concern that the program was being pressed into production prematurely. The U.S. Government Accountability Office recommended deferring full-rate production of the Block 1B pending completion of a third straight intercept test, and the MDA concurred with that recommendation.

The MDA’s announcement comes less than two weeks after an SM-3 Block 1B interceptor engaged and destroyed a medium-range target missile over the Pacific Ocean. The MDA said the Oct. 4 test was the Block 1B’s fifth consecutive success, and Raytheon officials described the event as a final exam of sorts for the interceptor.

MDA budget documents indicate that the agency plans to buy 52 missiles in 2014 and 72 missiles each year for the next four years. 

Raytheon officials have said they expect the MDA will continue to buy the missiles past 2018.

According to the notice, the MDA is seeking authority to order all the missiles for the 2015-2017 timeframe at once. If MDA does not receive that approval, the agency plans to award a contract in 2015 with two prepriced, one-year contract options.

 

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