By Geoff Fein

Raytheon [RTN] has received Foreign Military Sales (FMS) contract awards totaling $1.1 billion to fund new production of the Patriot Air and Missile Defense System for Taiwan, the company reported Wednesday.

The awards include ground-system hardware through an initial contract valued at $965.6 million and an initial spares contract valued at $134.4 million, according to Raytheon.

The sale is a continuation of the large amount of interest the company has had, over the past two to three years, from countries looking to defend themselves, Daniel Smith, president of Raytheon Integrated Defense Systems (IDS) told Defense Daily Wednesday.

About this time last year Raytheon received a $3.3 billion FMS contract to deliver Patriot systems to the United Arab Emirates (Defense Daily, Dec. 19, 2008).

“The good news is we’ve reopened the production lines [that have been] closed 12 to 13 years. We’ve been basically doing spares, kits those kinds of things,” smith said.

The UAE sale actually reopened the Patriot production line, Smith noted. “[The Taiwan sale] adds on to the backlog in the production line. It gives a substantial number of people some job security for quite a few years.”

The Taiwan sale may not be the end either, Smith added.

“Actually there are 12 nations in the Patriot family, counting the U.S. UAE was the eleventh. Taiwan already had this. [They] had contracted with us to do upgrade kits for the ones they had. They wanted more, so they went through the proper channels,” he said. “We see opportunities in places like Saudi Arabia that have the older model to upgrade. We think basically all of the countries on the Config-2 baseline will upgrade to Config-3 and get the benefit of common parts, common logistics, and those kinds of things.”

Countries not part of the Patriot family have also expressed an interest in the missile system, Smith added.

“We see this as a thing that has some fairly long-term legs. While these are big dollars, they are not the biggest, that was UAE at $3.3 billion,” he said. “There could be some of that magnitude in the future.”

There are also discussions ongoing between the United States and Turkey, part of that nation’s interest in obtaining an air and missile defense system, Smith said.

“Turkey has asked for bidders for an air and missile defense system. The three bidders were the U.S., China, and Russia.” Smith said.

Proposals are due to the Turkish government by mid January and Smith anticipated Turkey making a down select in the summer 2010 time frame.

“India has put out documents saying they are interested in air and missile defense,” he added. “So anywhere there is an air and missile defense need, we look at this kind of system, Patriot, to bid.

“The big deal here is that the whole Patriot family continues to be robust and continues to be the system of choice around the world, at least for the allied nations,” Smith said. “We see that as being a long-term stability for Raytheon, and in fact for Lockheed Martin because they do PAC-3 missile.”

The U.S. Army Aviation and Missile Command, Redstone Arsenal, Ala., issued the contract for new-production Patriot fire units that will include new advances in technology, improved man-machine interface and reduced life-cycle costs, the company added.

Raytheon is the prime contractor for both domestic and international Patriot Air and Missile Defense Systems and system integrator for Patriot Advanced Capability-3 missiles. Work under these contracts will be performed at the Raytheon IDS Integrated Air Defense Center, Andover, Mass.; El Paso, Texas; and Huntsville, Ala.