By Marina Malenic
The top three U.S. defense companies will vie for what could be up to a $2 billion contract for services to sustain the U.S. silo-based missile defense system, industry executives acknowledged on Tuesday.
The Missile Defense Agency (MDA) will open a competitive Performance Based Logistics acquisition later this year for future operations and sustainment support for the Ground- Based Midcourse Defense (GMD) system, the government said last year. The contract will cover 5-10 years beginning in fiscal year 2011 and will have an approximate annual value of $200 million–making it worth between $1 billion and $2 billion.
Boeing [BA], the incumbent, plans to compete for the award, according to a company spokesman. Lockheed Martin [LMT] and Northrop Grumman [NOC] also announced their intent to pursue the contract on Tuesday. Boeing holds a $250 million contract for the work in 2009, with an option to renew for 2010, according to Norm Tew, Boeing’s GMD chief engineer. The company has handled GMD maintenance and support operations since 2004, said company spokesman Marc Selinger.
The need to repair aging and heavily used equipment from the last decade–along with potentially shrinking defense budgets and fewer new starts–is likely to increase the size and importance of logistics and support contracts (Defense Daily, March 5).
Larry Dodgen, Northrop Grumman’s vice president for the missile defense division of the company’s Mission Systems sector, said he anticipates some program cuts within the Missile Defense Agency.
“Industry speculation is that Missile Defense Agency budget is going to come down, just like everything else,” he said.
Defense Secretary Robert Gates “has said we’re going to have to make some tough choices on programs,” Dodgen said, “and there’s going to be some programs that we won’t have next year.”
Pentagon officials have recently said that Gates favors eliminating entire programs within the department’s weapons portfolio over “salami-slicing” efforts to shave small amounts money from all programs across the board (Defense Daily, March 12).
Northrop Grumman also advocated its deployable Kinetic Energy Interceptor (KEI) as a more flexible ICBM interceptor with greater cost efficiencies.
“The disparity in cost between what is being spent on sustainment on GMD and something like KEI is likely to be pretty significant,” Dodgen said.
“The idea with GMD was speed, getting it fielded quickly,” he added. “Now we’re building a system in which the sustainability and the affordability is built into the system… so that it doesn’t require as much sustainment as in the past.”
The vice chairman of the Joint Chiefs of Staff, Marine Gen. James Cartwright, said earlier this week that he envisions the missile defense mission shifting from a static system that protects the United States to a flexible system that can guard both deployed U.S. forces and allies.
That shift will require “the flexibility to address the unknown,” Cartwright said, as well as a highly networked command and control sensor system.
“A system that morphs itself in 30 days into the threat is really what we’re trying to buy,” Cartwright said at the American Institute of Aeronautics and Astronautics’ missile defense conference on March 23. “It’s always about staying ahead of the threat.”