Raytheon Co. [RTN] and Rafael won an Israeli contract to produce a cheap shield for Israel against short-range ballistic missile (SRBM) threats, Raytheon briefers announced last week.

“Earlier this week the government of Israel announced that Rafael won that competition, and so our team of Raytheon and Rafael is looking forward to [creating] the design for the very short-range missile threat that is facing their country, and potentially allied-deployed worldwide,” said Michael Booen, Raytheon vice president of directed energy weapons/advanced missile defense.

The award decision couldn’t be confirmed independently at press time.

Rafael and Raytheon faced off against a rival group of The Boeing Co. [BA] and Israel Aircraft Industries Ltd. (IAI).

The aim is to develop a shield against short range ballistic missile (SRBM) threats to the homeland and forward-deployed forces.

SRBMs and long-range rockets are the most prevalent threat today, and that former threat creates a need for a low-cost interceptor system.

Rafael and IAI, Raytheon briefers told defense journalists, have conducted competing concept and risk reduction studies.

According to Raytheon, there is $10 million in the fiscal 2006 budget.

Israel requires a stout missile defense capability. A Raytheon briefing map states that a SCUD missile fired from Syria can reach all parts of Israel within one minute.

During the Persian Gulf War in 1991, Israel was hit by enemy missiles.

The SRBM shield would be effective against an array of short-range enemy missile threats, according to Raytheon.

This effort would be a joint Israel-U.S. cooperative development program.

The SRBM shield, a hit-to-kill missile, will be “targeted toward the 40- to 250-kilometer threat” posed by short-range missiles that have proliferated around the world, Booen said.

Given the number of these rogue missiles around the world, “because there are so many of them, the interceptor that you want to launch at these has to be very cheap,” he said.

To keep costs down, the new shield system might be able to use existing launchers, he said.