MEADS International recently said the Medium Extended Air Defense System’s (MEADS) Integrated Launcher Electronics System (ILES) recently executed a simulated missile launch, moving the program closer to its initial flight tests this fall.

The MEADS program is a tri-national effort with the United States, Germany and Italy. Prime contractor MEADS International is a multinational joint venture headquartered in Orlando, Fla. Major partners are MBDA in Italy, LFK in Germany and Lockheed Martin [LMT] in the United States. MEADS is a next-generation, ground-mobile air and missile defense system that incorporates the hit-to-kill Patriot Advanced Capability-3 (PAC-3) Missile Segment Enhancement (MSE) Missile, 360-degree radars, netted and distributed battle management and high-firepower launchers.

MEADS International Vice President Volker Weidemann said, “The ILES tests confirm increasing readiness for our upcoming flight tests, which will demonstrate the greater defensive coverage and 360-degree capability unique to MEADS. No other air and missile defense system provides the protection and lethality of MEADS.”

There has been heavy lobbying for and against the program in Congress as deficit reduction and defense budget cuts dominate fiscal discussions. When the president’s fiscal year 2012 budget was revealed early this year, Defense Department officials said the United States planned to end its participation in the tri-national Medium Extended Air Defense System at the end of the design and development (D&D) phase. DoD will let the program “run out…so we don’t incur any termination liability,” it said at the time.

Congress is questioning whether to fund the U.S. portion of the design and development funds. If the United States doesn’t pay the remaining commitment, roughly a little more than $800 million left to pay under the 2004 cost sharing percentages of the $4 billion program–contributions of 58 percent for the United States, 25 percent for Germany and 17 percent for Italy.

“Germany and Italy would not be able to finish the project on their own so all their investment would be wasted,” Marty Coyne, MEADS International Business Development Director, told Defense Daily in a recent interview “Germany and Italy have met every single milestone to date,” providing money and technical expertise.

The top Defense Department acquisition official approved completing integration and test and completing three flight tests through the end of 2013, Coyne said. The first flight test is slated for November at White Sands Missile Range, N.M.

Both Germany and Italy have written top DoD officials expressing concerns about U.S. termination of the program.

The German director of armaments said “joint termination” of MEADS is “not an option” for Germany.MEADS would form the basis for German air defense architecture and is “essential” for its contribution to NATO air and missile defense.

A top Italian defense official was frank, saying if the United States doesn’t meet its financial obligations, it must be considered a unilateral withdrawal from the MoU, and must then be required to bear all the resulting contract modifications and cancellation costs up to the total financial contribution established in the MoU.

Both nations characterize the flight test data as crucial to their missile defense modernization plans.

Last year, the German Ministry of Defense issued a report, “Alternative Solutions to MEADS,” with a summary that said Patriot will likely turn out to be “neither an economically nor operationally viable alternative” to MEADS.

In late July, Rep. Ann Marie Buerkle (R-N.Y.) wrote requesting an investigation of MEADS and Patriot missile defense systems program costs by the Government Accountability Office. “I believe an independent analysis is required to determine that the Army and Congress are choosing the most affordable option,” she wrote GAO. Particularly, Buerkle wanted a comparison of the areas defended by each system. Estimates show “as few as two-thirds to one-half as many MEADS systems would be required to provide the same defended area as our current Patriot inventory,” her letter said.

Before Congress makes its determination on MEADS, such a cost comparison discussion should be held, Coyne said. What is the cost of sticking with the Patriot Weapon System for the next couple of decades or moving to MEADS. Raytheon [RTN] is the prime contractor for the Patriot weapon system, while Lockheed Martin provides the PAC-3 missile.

“We think that’s a fundamental question that’s not being discussed at all,” Coyne said.

For its own edification, Coyne said MEADS International created a model that allows a detailed analysis of costs. MEADS significantly reduces the cost of ownership, he said, particularly since the Europeans are paying “half the development cost.”

MEADS International President Dave Berganini said, “In partnership with our European teammates, we are confident we can demonstrate the increased coverage and lower ownership costs that MEADS was designed to provide. Unlike other systems, MEADS can see and eliminate 21st century threats from further away and without any blind spots.”

MEADS defends up to eight times the coverage area of Patriot with fewer system assets and reduces demand for deployed personnel and equipment, which reduces demand for airlift, Coyne said. For example, MEADS has two-level maintenance, thus “we lose a maintenance company that follows Patriot around.”

For example, in just one option, the company model found that replacing Patriot with MEADS could save $35 billion in personnel costs, multiply the defended area four times, and double the number of fully protected sites, he said.