By Geoff Fein

Industry sources last week said it appears likely that in the coming days the Navy will terminate the Extended Range Munition (ERM) effort after Raytheon [RTN] has been unable to demonstrate reliability or consistency in its latest Extended Range Guided Munition (ERGM) tests.

“At the present time, [the] Navy cannot confirm,” a Naval Sea Systems Command spokeswoman said.

Raytheon conducted a series of engineering tests in early February to determine what, if any, tweaks and adjustments would be needed to ERGM in preparation for a planned 12- shot reliability test in September. ERGM has 25-30 new pieces, including software, that flew for the first time in last month’s test (Defense Daily, Jan. 18).

But as of Thursday, those tests seemed unlikely to take place, sources said.

Although results of the February tests were never made public, sources said the company was only able to demonstrate 20 percent reliability. Raytheon had planned to fire a total of six rounds during those tests.

According to sources, the Navy has contacted Raytheon, as well as ATK [ATK], which is developing its Ballistic Trajectory Extended Range Munition (BTERM), about the future of ERM.

Last week the Navy held a Gate review of ERM, the results of which have not been made public.

While Raytheon’s attempts to develop ERGM may have failed, ATK, which has been developing BTERM, may actually find itself still in the running.

ATK has been able to continue its BTERM effort through plus-ups provided by Sen. Robert Byrd (D-W.Va.). Although ATK has also been unable to demonstrate reliability with its BTERM rocket motor, it does not have the pressure of a contract hanging over its head. The company can continue to develop BTERM, although how much ATK is willing to invest in the effort is unknown, sources said.

The Navy said cost and schedule issues led them to look for an alternative solution and the eventual awarding of the development contract to ATK (Defense Daily, May 24, 2005).

ATK and Raytheon declined comment.

In 2004, ATK beat out Lockheed Martin [LMT] for the Navy’s $29.9 million ERM alternative demonstration contract (Defense Daily, Nov. 7, 2005). The Navy was looking for an alternative to Raytheon’s ERGM.

If the Navy were to terminate ERGM, few would be surprised, sources said. Some inside the Navy have questioned the continued funding of a program that has never been able to demonstrate a consistent high reliability of rounds. However, the Marine Corps has been adamant about the need for ERGM. Whether the Marine Corps will be able to again make its case for keeping ERGM alive is unknown.

Without ERGM, the Marine Corps will face a gap in naval surface fire support until DDG-1000, with its BAE Systems’ Advanced Gun System (AGS) and Lockheed Martin’s Long Range Land Attack Projectile (LRLAP) are deployed, sources said.

The original ERM contract was awarded in 1996 to Texas Instruments [TXN] to develop and test a 5-inch precision munition. In 1997, Raytheon acquired Texas Instruments and, in 1999, moved the program to Arizona, resulting in workforce disruption and delays, GAO said. In 2001, Initial Operational Capability (IOC) for ERM was pushed out to 2011 (Defense Daily, Dec. 6, 2006).

The Navy’s schedule for ERGM originally planned to take the munition into IOC in 2001. IOC was moved to 2004 due to schedule delays and budget reductions that occurred because of technical issues Raytheon was experiencing with ERGM’s guidance system survivability during gun firing, according to the report. IOC is now planned for 2011 (Defense Daily, April 28, 2006).

The Navy had originally pegged the cost to develop ERM at $86 million. However, according to GAO, the Navy projects that cost to increase to $475 million (Defense Daily, Dec. 6, 2006).

In August 2006, ERM became an ACAT I program via the FY ’06 Major Defense Acquisition Program list.

In September, the Pentagon’s top weapons buyer, John Young, issued a memo laying out a path forward for ERM.

The Sept. 28, 2007 memo approved the ERM Acquisition Strategy and told the Navy: “It may proceed with modifying the contract while only executing the essential tasks required to initiate the procurement of material for fabrication of test rounds and to complete component engineering testing by Jan. 31, 2008, thus limiting the Department’s liability (Defense Daily, Jan. 18).”

Young authorized the Navy to obligate $20 million for those efforts, according to the memo.

He also directed the Navy to submit a Technology Maturation Plan to the Director, Defense, Research and Engineering for his approval by the end of this month.

“It is critical that the program demonstrate satisfactory progress toward achievement of reliability and technology readiness requirements,” Young said in the memo.

He also directed the Navy to: “Provide a comprehensive FY ’09-13 budget while fully funding all elements of a coherent program–ERM development, ERM low-rate initial production, gun magazine modifications, fire control modifications, platform integration, etc.”

The Navy must also work with the Chairman, Cost Analysis Improvement Group (CAIG), to reconcile Navy and CAIG cost estimates and fully fund the program in Program Review 2009 before the budget locks.”

The Navy was to also have submitted an Acquisition Program Baseline to Young by the end of October ’07.

The Navy must also provide the results of the flight tests to the Under Secretary of Defense, Acquisition, Technology and Logistics by late February, according to the memo.

“Within 150 days of this ADM (Acquisition Decision Memorandum), the Deputy Under Secretary of Defense (Acquisition & Technology) will review the [program’s] technical and funding status and develop a recommendation for me on whether this program should proceed,” Young wrote (Defense Daily, Jan. 18).