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 15^th 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.

In November 2017, 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.

The first of 40 F-35A Lightning IIs that are being built for South Korea made its public debut March 28 during a rollout ceremony at Lockheed Martin’s [LMT] fighter jet plant in Fort Worth, Texas.

The conventional-takeoff-and-landing variant will be sent to Luke Air Force Base in Arizona, where Republic of Korea Air Force (ROKAF) pilots and maintainers will start training on the jet.

South Korean defense officials said they are eager to begin fielding the new fifth-generation, multi-role aircraft to enhance the protection of their country’s airspace and boost support for ground operations.

“The capabilities that the F-35 brings to the table, with its outstanding stealth technology and the latest avionics, will dramatically improve and transform our air force’s operational concepts,” said ROKAF Chief of Staff Gen. Lee Wang-Keun.

Five more South Korean F-35As are slated for delivery in 2018. Lightning IIs are scheduled to begin arriving at Cheongju Air Base in South Korea in 2019.

In September 2014, South Korea signed an agreement to buy the F-35A. Lockheed Martin has so far delivered a total of more than 280 F-35s to the U.S. Air Force, Marine Corps and Navy and foreign forces.

The F-35, which is designed to fuse and share large amounts of sensor information, “will enable the South Korean forces to operate side by side with our U.S. forces in protecting” South Korea, said Navy Vice Adm. Mat Winter, the F-35 program executive officer.

During the rollout ceremony, Sen. John Cornyn (R-Texas) alluded to a letter that he and Sen. James Inhofe (R-Okla.) recently sent to President Donald Trump urging him to consider selling the F-35B short-takeoff-and-vertical-landing variant to Taiwan.

The F-35B would “have a positive impact on Taiwan’s self-defense and would act as a necessary deterrent to China’s aggressive military posture across the Asia-Pacific region,” the March 26 letter says.

Another ceremony speaker, Rep. Marc Veasey (D-Texas), touted the T-50A, which Lockheed Martin and Korea Aerospace Industries (KAI) are offering for the U.S. Air Force’s T-X trainer jet program. He said that commonality between the U.S. Air Force’s F-35A and the T-50A is a key selling point.

“Because the T-50 and the F-35 have similar cockpits, U.S. pilots could step from the T-50 directly to the F-35 in a seamless, fifth-gen, cockpit-training program, meaning we will have better-trained pilots in shorter time for less money,” Veasey said.

A T-X contract award is expected in July. The T-50A is competing against a new design offered by a Boeing [BA]-Saab team and the T-100 proposed by Leonardo DRS.

Other U.S. officials attending the ceremony included Pentagon acquisition chief Ellen Lord; Heidi Grant, deputy undersecretary of the Air Force for international affairs; and Rep. Kay Granger (R-Texas), who chairs the House Appropriations Committee’s defense panel.

The United Kingdom awarded MBDA a $566 million contract to extend the service life of the Brimstone air-to-surface missile through the capability sustainment program (CSP), the company said March 27.

Through the CSP effort, MBDA will build new Brimstone air-to-surface missiles for U.K. Armed Forces to replenish the military’s inventory. The company noted this effort is expected to extend the Brimstone’s life past 2030.

The Brimstone is a 1.8 meter-long air-to-surface precision attack weapon previously demonstrated from land, sea, jets, helicopters, and unmanned aerial vehicles (UAVs). It is used to engage fast moving and maneuvering targets.

The new Brimstone missiles are planned to include all improved functionalities previously offered to the missile in spiral upgrades over recent years. This includes the Dual Mode SAL/millimeter wave (mmW) seeker, enhanced autopilot, and new insensitive munition compliant rocket motor and warheads.

“I am delighted that the U.K. has chosen to proceed with the Brimstone capability sustainment program. This new investment by the U.K. is an endorsement of the unique and world-beating capabilities offered by Brimstone,” Engineering Director and Managing Director of MBDA UK, Chris Allam, said in a statement.

“The CSP contract forms the basis for the through-life sustainment and upgrade of Brimstone to 2030 and beyond,” he added.

The new Brimstone is planned to be carried by the Royal Air Force’s (RAF) Typhoon fighter aircraft. The company said it expects the missile to later be used by the the RAF’s new Protector UAV and British Army’s new Apache attack helicopters.

MBDA noted the CSP will include “a significant memory and processing update to the missile in order to enable all of Brimstone’s functionalities and to future-proof the missile.”

The sustainment program will also deliver a baseline hardware standard that will later evolve via software enhancements, leading to a common stockpile of identical missiles used on British attack helicopters, jets, and UAVs and allow manufacture of Brimstone for export orders, the company said. The various CSP modes are set to be cockpit selectable, giving users easy access to the missiles’ capabilities.

 MBDA is jointly owned by Airbus (37.5 percent), Britain’s BAE Systems (37.5 percent), and Italy’s Leonardo (25 percent).

The United Kingdom is looking for ways to drive down the cost of operating and sustaining its F-35 Joint Strike Fighter fleet now that the program is transitioning from its initial development phase to significant production quantities, a UK defense official said March 27.

“We must maintain an absolutely laser-like focus on keeping those costs down,” said Stephen Lovegrove, who, as the permanent secretary of the UK defense ministry, is roughly the British counterpart to U.S. Deputy Defense Secretary Pat Shanahan. “Historically … we’ve been okay at buying stuff, but we’ve not been necessarily good at sustaining and operating it as cost-effectively as we possibly can. We need to work very, very, very hard on that, and we are doing so.”

Lovegrove was scheduled to meet later on March 27 with Shanahan and F-35 program officials to discuss operation and sustainment costs.

Such costs are “slightly unknown territory at the moment” because the Lockheed Martin [LMT]-built plane is still new and will be flown for decades, Lovegrove told a Defense Writers Group breakfast. Some members of the British parliament have expressed frustration that he cannot yet provide precise cost figures.

According to the U.S. Government Accountability Office, F-35 sustainment for the U.S. Air Force, Marine Corps and Navy is expected to cost $1.12 trillion over 60 years. A Pentagon official indicated in October that the Department of Defense was launching a year-long “deep dive” to look for ways to cut the cost of the jet’s production and sustainment.

Despite the UK’s cost concerns, Britain is “very pleased” with the aircraft’s development, and the program has stayed “well within budgets” so far, Lovegrove said.

“It’s doing everything that we hoped it would do, and we are pleased to see the cost of acquisition coming down in line with the way that we assumed it would,” he told reporters.

The UK, the largest foreign buyer of the F-35, plans to procure 138 planes for the Royal Navy and Royal Air Force. The UK has placed 48 of those jets under contract and has taken delivery of 15.

Also at the breakfast, Lovegrove said that development of the Common Missile Compartment (CMC) for new UK and U.S. ballistic missile submarines is “going very well.” General Dynamics [GD] Electric Boat is the prime contractor for the CMC, which will be installed on the U.S. Navy’s Columbia class and the Royal Navy’s Dreadnought class.

Turning to space, Royal Marine Gen. Gordon Messenger, the UK’s vice chief of the defense staff, said Britain shares U.S. concerns about growing threats to satellites and is looking for ways to increase the resiliency of its current and future spacecraft.

“That is an area that’s getting more and more focus,” Messenger told the Defense Writers Group. “We’re working closely with U.S. colleagues on that.”

One possible step would be to improve the ability of satellites to defend themselves. Another would be to work with allies to build redundancy into satellite networks to avoid dependency on a single spacecraft.

Boeing [BA] on March 26 said its HorizonX ventures arm has made an investment in a small Australian company focused on nanosatellite communications for remote areas.

Boeing doesn’t disclose the specifics of its HorizonX investments other than to say they range in the singled millions of dollars to the low double-digit millions of dollars. For the investment in the nanosatellite communications startup Myriota, Boeing joined other investors in a $15 million Series A funding round.

Myriota is developing direct-to-orbit technology that Boeing said “enables massive-scale, low-cost communications for IoT devices anywhere on Earth.” IoT refers to Internet of Things, which is the growing number of systems, devices and appliances worldwide that are connected to the Internet.

“We formed Myriota to solve a major connectivity problem: hundreds of millions of devices that need to communicate but don’t have cost-effective, battery-friendly networks to do so,” Alex Grant, the company’s CEO, said in a statement. “The scale of this investment with strong domestic venture capital and strategic participation by global investors is significant for Myriota and our vision to deliver IoT connectivity for everyone, everywhere.”

Myriota, which has 11 employees, has developed its technology based on work its founders did with the Univ. of South Australia’s Institute for Telecommunications Research.

Myriota said it plans to open a $2 million IoT Innovation Lab. It also said it plans to add 50 new staff as part of efforts to accelerate growth.

Boeing said Myriota’s direct-to-orbit technology has “applications across the logistics, utilities, agricultural, environmental and maritime industries, where IoT connectivity via traditional means is extremely challenging and expensive.”

The investment in Myriota is the first by HorizonX outside the U.S. It is also the first in a satellite communications firm.

“By investing in Myriota, we are proud to support Australia’s startup ecosystem and growing space industry,” Steve Nordlund, vice president of HorizonX, said in a statement. “Myriota’s technology influences how we think about space-based communication and connectivity in remote locations.”

Other investors in the Series A funding include Australian firms Blue Sky Venture Capital, Main Sequence Ventures and Right Click Capital. Singapore’s Singtel Innov8 also made an investment.

In 2017, Boeing made a small investment in South Australia worth $383,000 over five years in the Techstars global accelerator program to support local startups.