Secretary of Defense Leon Panetta and Under Secretary of Defense for Acquisition Technology and Logistics Frank Kendall have written key senators asking for their support for Fiscal Year 2013 funding to complete U.S. obligations in the Medium Extended Air Defense System (MEADS) program.
There have been a recent series of letters from U.S., German and Italian leaders in support of the program. MEADS is a tri-national effort among the United States, Germany and Italy, led by prime contractor MEADS International, a multinational joint venture with major partners MBDA in Italy, LFK in Germany and Lockheed Martin [LMT] in the United States.
To the Chairman of the Senate Appropriations Committee, Sen. Daniel Inouye (D-Hawaii), Panetta wrote urging FY ’13 funding to complete the MEADS Design and Development Proof of Concept effort with partners Germany and Italy. The Defense Department seeks $400.9 million to “honor the final year of our MEADS D&D Memorandum of Understanding (MoU) commitment to complete the development phase as planned.”
In the June 26 letter, Panetta wrote, “Failure to fund our FY 2013 commitment will be viewed by our allies as reneging on our promises.”
The secretary pointed out that leaders at the NATO Summit in May reached consensus to operationalize ballistic missile defense, “a major achievement of U.S. policy; a decision by Congress to prohibit any additional funding for MEADS at this late date would diminish the consensus reached in Chicago.”
The United States relies on its allies and it’s important to live up to commitments to those allies, he wrote. “Failure to meet our MEADS MOU FY 2013 funding obligations could negatively affect allied willingness to join future cooperative endeavors, bilaterally or through NATO, that have been strongly supported by the Administration and Congress at a time when cooperation through concepts such as Smart Defense is critical to ensuring NATO and its members are developing needed capabilities for the future,” the letter said.
And, that failure to fund the effort would likely lead to a dispute, while full funding could “ensure that the United States receives a return on its (eight)-year investment in the form of a data archival package for future potential use on other U.S. air and missile defense improvements.”
Panetta wrote: “We must act now to avoid a situation that would cause harm to our relationships with two of our closest allies.”
The letter also went to Thad Cochran (R-Miss.), SAC vice chairman.
Separately, Kendall expressed similar thoughts as he wrote to Sen. Richard Shelby (R-Ala.), who supports continued MEADS funding, asking for continued support of the tri national program that also achieves the larger strategic goal of improving NATO missile defense.
Kendall also answered questions raised in Shelby’s June 14 letter to the Defense Secretary. High on the list, Shelby asked specifically what the consequences would be if Congress did not fund the final U.S. obligation.
There would be six primary consequences, Kendall wrote, starting with likely a MoU dispute with Germany and Italy that would likely assert that DoD should be subject to financial liability for any contract termination of termination costs.
Additionally, Germany and Italy would potentially seek other solutions for upgrading their air and missile defense architectures.
Too, Germany and Italy would be “less likely to make national contributions to NATO territorial missile defense and the U.S. ability to argue for ‘Smart Defense’ solutions for defense cooperation and burden sharing in which nations work together to reduce costs, will be undermined.”
Also, current and future cooperative efforts could be harmed, including ongoing cooperative acquisitions and purchase of U.S. defense equipment.
Another consequence would be that the three nations would fail to realize the benefits of the more than $4 billion investment already made in MEADS.
Shelby, ranking member on the Banking, Housing and Urban Affairs Committee and member of the Appropriations Committee, also asked if DoD would have to invest more money in similar technologies already developed by MEADS if the U.S. abandoned the program and is unable to harvest technologies.
Kendall said DoD “intends to use MEADS-matured technology data packages to inform future Army and Missile Defense developments.” The three nations want the results of the Proof of Concept effort.
“Without the results of the Proof of Concept, DoD (and the other Participants) would either forego consideration of these new capabilities, be forced to re-invest at a later date to obtain the design, integration, performance and testing information of pay for new development efforts to obtain the desired capability,” Kendall wrote.
However, completed technical data packages would allow multiple contracting opportunities, provide a knowledge base for decisions impacting air and missile defense investments, and save taxpayer dollars.
Finally, Kendall said, “It is important to live up to that commitment which will enable Germany and Italy to develop a capability that will be a direct benefit to the U.S. in protecting our troops overseas.