Boeing To Gain New Ground-based Midcourse Defense Contract

The Missile Defense Agency (MDA) will negotiate a sole-source contract for The Boeing Co. [BA] to continue leading the Ground-based Midcourse Defense program, according to an MDA notice and Boeing officials.

They declined to specify the possible dollar amount of the new contract, saying that Boeing now is in a "quiet period" when officials can’t discuss revenue/earnings numbers.

But the work could run into the billions of dollars.

That new core completion, cost-plus-award-fee contract would subsume an existing contract that Boeing already holds, to be combined with new work running from the January-March quarter next year through the July-September quarter in 2013.

While MDA said other contractors are free to try making a case that they should receive the GMD work, the ballistic missile defense (BMD) shield agency made clear that it is highly unlikely that any other company could catch up with the commanding position Boeing has established in leading the GMD program, without huge added expense and delays.

However, this sole-source contract doesn’t obviate MDA considering future competition of the GMD program, stemming from a recent request for information that MDA issued, according to the agency.

"This proposed sole-source contract action does not preclude the on-going assessment of the future GMD potential competitive requirements which are a part of our current request for information" solicited from contractors, the MDA explained.

Work under the contract would include tasks in the current contract to complete the current spiral development of GMD, work on Block 4 hardware and software, critical core GMD weapons system completion, and work on the European GMD site.

The United States has proposed establishing a GMD missile shield in Europe to guard against enemy missiles fired from Middle Eastern nations such as Iran.

Iran is developing missiles with increasingly long ranges, has fired a missile from a submerged submarine, and said it is developing a satellite-launching capability that would also mean a capability to fire intercontinental ballistic missiles able to strike the United States.

Further, Iranian President Mahmoud Ahmadinejad has said Israel should be wiped from the map.

To protect Europe, and U.S. troops stationed there, the United States proposed placing a GMD radar in the Czech Republic and interceptors in silos in Poland. After a recent White House meeting, the framework of a yet-unfinished deal with Poland was crafted, in which the Poles would agree to provide the site for the interceptors, while the United States would help Poland upgrade its military forces.

Congress, in passing budget bills last year, said funds may be used to continue the GMD program, but no funds may be used for construction work on the European system until the Czechs and Poles agree to provide sites and host the missile shield.

Space & Missile Defense Report asked whether Boeing could proceed with construction work on the interceptors site in Poland, if the Poles agree to provide the silos site but the Czechs haven’t yet provided the radar site.

If MDA so chooses, work could proceed on the 54 interceptors site in Poland, after the Poles formally agree to provide the site, independent of whether the Czechs have yet agreed to provide a site for the radar, according to Boeing officials.

Other defense contractors may be interested in gaining a chunk of future GMD work.

Lockheed Martin Corp. [LMT] responded, "We supported our MDA customer by providing the requested information and will continue to support them as requested." Asked whether Lockheed might wish to compete for this work, a Lockheed spokesman said, "As with any major opportunity, we’ll continue to review our options."

A Raytheon Co. [RTN] official reached by us had no response to the Boeing contract news.

A Northrop Grumman Corp. [NOC] source had no comment.