Poland signed a Letter of Offer and Acceptance (LOA) to buy Raytheon’s [RTN] Patriot air and missile defense system, interceptors, and a battle management system for upward of $4.75 billion during an event on March 28.
Polish Defense Minister Mariusz Blaszczak signed the LOA with President Andrzej Duda, Prime Minister Mateusz Morawiecki, National Security Bureau head Pawel Soloch, and other government and military officials.
The LOA is the first step before the U.S. government starts contract negotiations with Raytheon and other industry partners and later moves to real Initial Operational Capability (IOC) as rapidly as possible.
Previously Poland agreed to an industrial-participation proposal that Raytheon and its partners offered to the NATO member. Polish law requires these kinds of agreements to facilitate self-sufficiency, so Raytheon plans to transfer technology “to the extent permitted by U.S. law and regulations,” the company said.
Beyond the Raytheon Patriot system, Poland’s LOA is buying an undisclosed number of Lockheed Martin’s [LMT] Patriot Advanced Capability-3 (PAC-3) Missile Segment Enhancement (MSE) interceptors and related equipment as well as Northrop Grumman’s [NOC] Integrated Air and Missile Defense Command System (IBCS).
The LOA is part of Phase I of Poland’s WISLA two-phase medium-range integrated air and missile defense (IAMD) procurement program.
In Phase II Poland plans to acquire additional Patriot fire units, Gallium-Nitride (GaN)-based 360-degree Active Electronically Scanning Array (AESA) radar, and the Raytheon SkyCeptor interceptor missile.
SkyCeptor is meant to be a lower cost interceptor, based on the Stunner hit-to-kill missile, which is in full-rate production for use in Israel’s David’s Sling.
The Polish Ministry of National Defense said the initial price offered for the Wisla Patriot system was $10.5 billion, but the country was able to negotiate down to $4.75 billion for the first phase.
The defense ministry noted Poland’s Wisla program will include 948 million Polish Zlotys in offsets, about $277.5 million. Defense Minister Błaszczak said this is the largest contract in Poland’s history.
At the ceremony, President Duda said the agreement is a historic moment.
“Today, we are launching the process of equipping Poland in the state-of-the-art missile defence system: the most advanced medium-range missile defence that is available world-wide.”
He acknowledged the high price tag, but said it is worth the cost.
“It is expensive; indeed, it is. But as the Polish saying goes: whatever comes cheap, will prove expensive; whatever comes expensive, will be operational and solid, to function for many years to come. And this is precisely the case with this system: it is meant to underpin Poland’s missile defence for decades to come,” Duda said.
Duda highlighted Poland will be the first non-U.S. customer to use Northrop Grumman’s new Integrated Air and Missile Defense Command System (IBCS). Including the IBCS makes the Patriot “an unquestionably ultra-modern system,” the president said.
IBCS is an open-architecture battle-command processor that senses, identifies and tracks incoming air threats and prescribes responses. It can utilize both legacy and new sensors as well as various interceptors. The company noted the system replaces legacy stove-piped command and control systems that do not integrate systems.
With this agreement, Poland will be the first country after the U.S. to procure IBCS.
Northrop Grumman said this LOA allows the U.S. to start contracting with Northrop Grumman for production and delivery of IBCS.
Once the Patriot system is operational, Poland will become the 15th country and seventh NATO member to procure the Patriot defense system.
The other Patriot users include the U.S., Germany, Greece, Israel, Japan, Kuwait, the Netherlands, South Korea, Qatar, Romania, Saudi Arabia, Spain, Taiwan, and the United Arab Emirates (UAE).
“Poland's procurement of Patriot strengthens Trans-Atlantic partnership and security by enabling a common approach to Integrated Air and Missile Defense, and creating jobs in the U.S. and Poland,” Wes Kremer, president of Raytheon’s integrated defense systems, said in a statement.
Additionally, the PAC-3 MSE purchase makes Poland the fifth international customer to sign an agreement to procure the interceptor. The other PAC-3 MSE procurement countries include the U.S., Japan, Qatar, Romania, and the UAE.
The PAC-3 MSE is a hit-to-kill interceptor that expands interceptor range and altitude with a dual-pulse solid rocket motor to target threatening tactical ballistic missiles, cruise missiles, and aircraft.
These agreements come after a November State Department approval for a $10.5 billion deal for Poland to purchase the Patriot Configuration-3+ system including radar sets,16 M903 launching stations, and 208 PAC-3 missiles.
Last November Romania signed an LOA for the Patriot Configuration-3+ with GEM-T and PAC-3 MSE interceptors.
Then in February, the State Department approved a possible $3.2 billion Foreign Military Sales (FMS) to Sweden for four Patriot Configuration-3+ Modernized Fire Units.