The Defense Department Appropriations Bill for Fiscal Year 2008 that includes $37 million for producing components for the anti- ballistic missile Arrow in the United States and Israel.

In the conference report accompanying the FY ’08 Appropriations Bill, lawmakers agreed to provide $155.5 million for the Arrow missile defense program–a joint United States- Israel effort. Both the House and Senate are expected to take up the bill this week.

The Arrow missile is part of the Israel’s Arrow anti-ballistic missile system. The Arrow system uses a two-stage interceptor, Arrow II, to destroy an incoming target with a fragmentation warhead. Other system elements are a launch control center, a fire-control radar and a battle management center.

The Arrow program is managed by the Israeli Missile Defense Organization in the Research and Development Directorate in the Israeli Ministry of Defense (IMoD), in close cooperation with the U.S. Missile Defense Agency (MDA).

In the defense appropriations conference report, lawmakers said $37.38 million of the $155.5 million should be available to produce Arrrow missile components in the United States and Arrow missile components and missiles in Israel “to meet Israel’s defense requirements, consistent with each nation’s laws, regulations and procedures.”

The conference report also said $20 million is to be available for risk mitigation and preliminary design activities for an upper-tier component to the Israel Missile Defense Architecture. Another $37 million is to be available for the Short Range Ballistic Missile Defense program.

Boeing [BA] and Israel Aircraft Industries (IAI) would perform such component work.

Boeing and IAI co-produce the Arrow II interceptor for IMoD.

Boeing is responsible for production of about 35 percent of the Arrow interceptor components. Boeing production and management are in Huntsville, Ala.

IAI, the prime contractor of the Arrow system, is responsible for system integration and final interceptor assembly in Israel.

In late March, IMoD announced a successful fly-out test of an improved capability Arrow interceptor (Defense Daily, March 27). The interceptor was co-produced by Boeing and IAI-MLM. The test, the16th for the interceptor, is part of the joint U.S.-Israel Arrow System Improvement Program. The previous test, conducted last month, was also successful (Defense Daily, Feb. 13).

The first co-produced Arrow II interceptor was delivered by IAI to the Israeli Ministry of Defense in the spring of 2005.

In March 2004, a $78 million production contract was awarded by IAI to Boeing. The contract, effective Jan. 1, 2004, ran through 2006 with options for additional production through second quarter 2008. The total contract value could exceed $225 million if all options are exercised. Boeing delivered the first components to IAI in 2004.

In February 2003, Boeing and IAI signed a pre-production contract, valued at over $25 million for FY ’03 and FY ’04, to establish production facilities and to validate processes and equipment.

The co-production agreement follows a strategic teaming agreement signed in January 2002 between the two companies.