Lockheed Martin [LMT] Friday received a not-to-exceed $64.15 million value contract for Joint-Air-To-Ground Missile (JAGM) guidance section work in the Extended Technology Development (TD) Phase.

The JAGM Extended TD Phase will address affordability and reduce overall risk before entering the Engineering and Manufacturing Development (EMD) Phase by adopting an incremental strategy for qualification of the JAGM guidance section, according to the Program Executive Office, Missiles and Space which, in conjunction with the Aviation and Missile Command, issued the contract.

Additionally, the Joint Attack Munition Systems Project Office is in ongoing technical discussions with Raytheon [RTN] for a parallel effort in this Extended TD Phase.

Lockheed Martin and Raytheon are competitors for JAGM EMD and initial production phases.

Ken Musculus, director of Air-To-Ground Missile Systems at Lockheed Martin, told Defense Daily affordability is the key. While all three modes of the seeker provided a very versatile weapon, examining the cost benefits made the government consider moving back to the dual mode. That would provide 90 percent of the capability, but “significantly” reduce the cost.

“We’ve pulled out all the expensive imaging infrared (I2R) components, but left all the ‘hooks’ in,” Musculus said in an interview. “The seeker is designed to easily put third mode back in some point in the future.

The dual mode seeker still contains the millimeter wave and semi-active laser.

Frank St. John, vice president of tactical missiles and combat maneuver systems in Lockheed Martin’s Missiles and Fire Control business, said in a statement late Friday: “Our proposed JAGM weapon system can provide significant performance advantages to help meet warfighter needs and save lives.”

Lockheed Martin has successfully designed, tested and fielded missiles with both JAGM seeker modes; the precision-strike semi-active laser on Hellfire and the all-weather fire-and-forget millimeter wave on Longbow.

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The plan for the TD contract is to develop the dual-mode JAGM seeker and attach it to a Hellfire Romeo back end, the newest Hellfire version, which is proven and this month entered production. “This will be Increment 1,” he said.

The work is cost driven, and when the 27 month TD contract is completed, what comes next will be up to the government.

Musculus said with the program back on track, they’re eager to start demonstrating the seeker meets current cost objectives and the technology is ready. The work never stopped, he said, they kept expending Lockheed Martin resources. “We’ve been continuing on a cost reduction program.”

Army officials said JAGM’s fielding timeline will be determined upon approval of a new acquisition strategy for a follow on EMD phase. Earlier plans were for the missile to first be fielded to the Army’s AH-64 Apache multi-mission helicopter, followed by fielding to the Marine’s AH-1W Super Cobra.

Earlier this month, the Senate Appropriations Committee markup fully funded the Army JAGM program for the fiscal year 2013 defense appropriations bill (Defense Daily, Aug. 1). The Army’s portion of the president’s FY ’13 budget request noted JAGM’s cost, and said the program would see sustained but reduced funding to allow alternatives (Defense Daily, Jan. 27).

The adverse weather capable JAGM system will allow warfighters to attack critical, high-value, fixed and moving targets day or night while remaining effective against a variety of countermeasures.

When fielded, the JAGM system will provide an improved air-to-ground missile for use on rotary-wing aircraft and unmanned aircraft systems for the Joint Services.