By Ann Roosevelt

The Missile Defense Agency (MDA) may have terminated the Kinetic Energy Interceptor (KEI) program, but the agency continues to work with developer Northrop Grumman [NOC] to get all possible benefits from existing work.

“Almost all the hardware we’ll be using on other programs, all the software, that’s why we continue to work with Northrop over the next several months because it has so many applications to other work we are doing,” MDA Director Army Lt. Gen. Patrick O’Reilly told the Defense Writers Group Tuesday.

KEI was being developed as an element of MDA’s Ballistic Missile Defense System, designed to destroy enemy ballistic missiles during their boost and early midcourse phases of flight. It was the first ballistic missile defense weapon system to be developed without the constraints of the Anti-Ballistic Missile Treaty.

The KEI program went through several alterations over the past several years, and O’Reilly has halted work on the remaining part of the program.

Some work will be done until the end of this fiscal year “to ensure we clearly understand all of the capability that is inherent” in the work and to make sure a lot of the architectural work that had been done is understood in the context of how applicable it is to early intercept. “A lot of it is, so we are working very closely with Northrop Grumman right now to make sure we understand that,” he said.

MDA is negotiating termination costs on the program. “Our estimated cost of the remainder of that contract to be terminated is somewhere around $40 million,” O’Reilly said.

The KEI program included $120 million for a flight test, he said. Northrop Grumman came in with a $100 million proposal but “it was very high risk and could not be done this year.”

O’Reilly said that flight test would not use an actual KEI but an “early, early” prototype. Very few of the components on that missile would be on the actual missile, which was one reason the proposal was not attractive to MDA.

“I have a legal obligation to cover our termination when we start a contract that we negotiate up front. These are the things we are liable for if we terminate for convenience, which we did,” O’Reilly said. “Since there is no budget in FY’10, I have to have at least $40 million to cover any termination costs that we have.”