Boeing Gains MDA Contract For Initial Work On European BMD Site

Lawmakers Vote To Cut $139 Million From European BMD

The Missile Defense Agency (MDA) gave The Boeing Co. [BA] a sole-source contract worth up to $80 million to conduct activation planning of the European ballistic missile defense (BMD) complex over the next six years.

Meanwhile, however, the House Appropriations Committee moved to cut $139 million from the $310 million European BMD program funding request by President Bush for the fiscal year ending Sept. 30, 2008.

Lawmakers noted in a report on the overall Department of Defense fiscal 2008 appropriations bill that the European BMD program would cost more than $4 billion through fiscal 2013 just for the tactical portion of the missile shield system.

And that doesn’t include costs for barracks, family housing or other costs, including costs of personnel manning the facilities, the report noted.

“The Committee believes that it is premature to provide full funding for the European Component given the uncertainty surrounding the program as of this writing,” the panel decided.

Therefore, the committee moved to cut $139 million for the interceptor field construction in Poland and associated equipment. To be sure, however, the committee made the cut “without prejudice,” meaning that the reduction doesn’t preclude restoration of the money later.

The committee move taking money out of the fiscal 2008 defense appropriations bill section funding the European BMD system is similar to action by the House on the companion defense authorization enabling bill, which also cut funds for the interceptors site in Poland.

Supporters of the system have complained that lawmakers, in imposing those funding reductions, make it more difficult for the Bush administration to negotiate agreements for the sites in the Czech Republic and Poland.

They also note that the European GMD system would shield European nations, U.S. troops there and the United States homeland against missiles launched from Middle Eastern nations such as Iran.

Over the past year, Iran has launched multiple missiles in a pyrotechnic display, launched a missile from a submerged submarine, and obstinately plunged ahead with a nuclear materials production program despite strong condemnation of the program by Western nations and the United Nations.

While Iran claims the fissile materials will be used for peaceful electrical generation, the Bush administration, some members of Congress and military analysts suspect Iran is poised to build nuclear weapons. While some say Iran won’t have the bomb before 2015, others note that Iran has surprised Western intelligence agencies before with technological leaps.

MDA Contract

A Boeing office in Huntsville, Ala., received the cost-plus-incentive-fee, indefinite-delivery letter contract for the European BMD system.

It would include a radar in the Czech Republic and interceptors housed in silos in Poland. Negotiations are underway with those nations.

The European BMD system is called the third site, because it will add to the Ground-based Midcourse missile Defense (GMD) system now built at two other sites, in Alaska and California.

Boeing Boasts Boffo Results

Separately, Boeing reported stellar financial results during April through June this year.

The company reported that revenues jumped a hefty 14 percent in the second quarter, as the huge aerospace firm racked up net income of more than $1 billion over the three months, contrasting sharply with a loss in the second quarter last year.

As well, the company raised its outlook for financial performance this year, and affirmed its earlier-stated outlook for next year.