Withdrawing from the MEADS multinational air and missile defense program would cost the United States some $348 million in termination fees and closeout costs, according to a recent U.S. Defense Department report.

The full House and the Senate Armed Services Committee passed versions of the 2013 defense authorization bill that recommend rejecting the Defense Department’s request for $400.9 million next year to continue work on NATO’s Medium Extended Air Defense System, or MEADS, citing cost overruns and a tight budget environment. The 2012 National Defense Authorization Act directed the Pentagon to negotiate with Germany and Italy to either terminate MEADS or restructure the program so that it can be completed within the $390 million Congress appropriated for it this year.

However, Germany and Italy have not agreed to restructure and might argue that a failure to provide the 2013 funding amounts to a unilateral withdrawal from the program’s memorandum of understanding, according to an April report from the Office of the Undersecretary of Defense for Acquisition, Technology and Logistics. Germany and Italy have said they expect the United States to contribute 2013 funds to complete the MEADS proof of concepts phase, which includes data archiving and analysis.

Congress fenced off 75 percent of the MEADS 2012 funding until the Defense Department submitted the April report, which included a plan to either restructure or terminate the program. The report was submitted to Congress in April and the remaining 75 percent of the program funds have since been released, Lockheed Martin spokeswoman Cheryl Amerine said June 6. Lockheed Martin is the lead U.S. contractor for MEADS.

MEADS, which has been in development for more than a decade, is intended to replace the U.S. Army’s Patriot air and missile defense system. The program is designed to use mobile trucks equipped with interceptor missiles and omni-directional radars to defeat cruise missiles and short-range ballistic missiles in the terminal phase of flight.



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