Pentagon Budget Cuts Prompt Industry to Self-fund SM-3 Research

WASHINGTON — At least two of the three companies developing competing concepts for a next-generation version of the Standard Missile 3 (SM-3) interceptor are funding their efforts internally after Congress slashed the Pentagon’s proposed program budget for this year.

Lawmakers dealt a major blow to SM-3 Block 2B development last year in providing just $13 million of the Missile Defense Agency’s $123.5 million request for the program in the 2012 defense spending bill. The request was intended to fund design studies under way by Boeing, Lockheed Martin and Raytheon.

Lockheed Martin is at least matching government funding for the current phase of work, according to Doug Graham, vice president of advanced programs for the company’s strategic missile and defense systems business. Raytheon is also investing a “significant” amount in its SM-3 Block 2B design effort, Wes Kremer, the company’s vice president of air and missile defense systems, said in a written response to a Space News query.

Boeing spokeswoman Elizabeth Merida declined to say whether Boeing is spending internal funds on the project.

The SM-3 Block 2B, also known as the Next Generation Aegis Missile, is the latest and most advanced variant of the sea-based SM-3 interceptor, which is operational today and is a cornerstone of the U.S.-devised Phased Adaptive Approach to European missile defense. SM-3 prime contractor Raytheon Missile Systems of Tucson, Ariz., is working on two other upgrades to the interceptor: the Block 1B, now in testing, and the Block 2A being developed with Japan.

The Block 2B is expected to have broader area coverage than its predecessors along with the ability to shoot down ICBMs in their boost phase from forward-deployed positions, the Missile Defense Agency (MDA) said in a presolicitation notice posted in 2010 on the Federal Business Opportunities website. In April 2011, the MDA awarded the three SM-3 Block 2B development contracts: Lockheed Martin Space Systems of Sunnyvale, Calif., received $43.3 million; Raytheon Missile Systems received $42.7 million; and Boeing Defense, Space & Security of St. Louis received $41.2 million.

That design work originally was supposed to culminate with the 2013 selection of a prime contractor. But Congress, reasoning that the MDA had too many SM-3 variants in development simultaneously, has thrown the program’s future into doubt.

Graham said lawmakers slashed the program budget in part out of confusion about the interceptor’s mission. The SM-3 Block 2B’s primary mission is homeland defense, as opposed to regional defense, he said, adding that references to the latter mission have appeared in MDA budget documents.

Speaking at a March 26 luncheon here, Graham said he sees the Block 2B’s primary mission as taking down long-range missiles aimed at U.S. territory from the Middle East as well as defending Europe.

Congress is actively working with the MDA and the Defense Department to try to come up with additional resources to help the three industry teams get through the end of the year, Graham said.

The SM-3 Block 2B will be based in Poland and Romania, according to Richard Lehner, an MDA spokesman. Current plans call for deploying the interceptor on land but MDA officials are still studying the potential for a sea-based version, he said.

“We expect the selection of the contractor for Product Development to occur in the first quarter of [fiscal year 2014],” Lehner said via email. “This will be a full and open competition.”

John Rood, vice president of business development at Raytheon Missile Systems, said the company’s experience as the SM-3 incumbent is aiding its Block 2B design work.

“That has been going very well, we think,” Rood said March 21 during a press conference here. “We are pleased with the performance that we have shown to date and the systems engineering and modeling.”

Boeing executives are committed to partnering with the MDA and the U.S. Navy to develop the SM-3 Block 2B, Merida said.

“As part of this concept development and program planning phase, our team is assessing new and innovative technologies that go beyond the current industry’s missile design,” she said via email. “Combining this innovation with Boeing’s proven missile and missile defense experience allows us to bring together the best capabilities to affordably meet the customer’s mission requirements.”

Boeing is prime contractor on the Ground-based Midcourse Defense system, the primary U.S. territorial missile shield.