The Missile Defense Agency gave Lockheed Martin Corp. [LMT] a $619 million contract to begin production of the Terminal High Altitude Area Defense (THAAD) ballistic missile defense (BMD) weapon system, the company announced yesterday.

This is but one upbeat opportunity opening for Lockheed missiles and missile defense systems, according to company leaders and media relations personnel briefing defense journalists in a teleconference.

The leaders added that many foreign sales possibilities are advancing as well.

In the contract for the first two THAAD fire units, that buy will include 48 interceptors, six launchers and two fire control and communications units. The system is scheduled for fielding in the fiscal year ending Sept. 30, 2009, according to the company.

“This is a major milestone for the THAAD program,” said Tom McGrath, Lockheed Martin vice president and THAAD program manager, said in a statement.

“Lockheed Martin, our customers at MDA and the THAAD Project Office have been working together to ensure that warfighters receive a missile defense system they can count on to defend themselves and the assets they are protecting. Once fielded, THAAD will network with other systems and sensors to provide the layered missile defense capability required for the future.”

THAAD is to defend U.S. troops, allied forces, population centers and critical infrastructure against short- to intermediate range ballistic missiles.

The system comprises a fire control and communications system, interceptors, launchers and a radar.

THAAD uses hit-to-kill technology to destroy targets, and is the only weapon system that engages threat ballistic missiles at both endo- and exo-atmospheric altitudes (within the atmosphere and in near space), according to Lockheed.

THAAD testing has advanced from the NASA White Sands, N.M., testing range to the much larger Pacific range at Hawaii.

A key element of the U.S. Ballistic Missile Defense System (BMDS), THAAD is a Missile Defense Agency program, with the program office located in Huntsville, AL.

According to Mike Trotsky, Lockheed vice president for air and missile defense, the THAAD system will face several tests this year.

Also, Trotsky said, the Patriot Advanced Capability (PAC-3) system has scored successfully in tests. While the PAC-1 was a Raytheon Co. [RTN] program, the PAC-3 is a Lockheed-led program.

Any nation currently using Patriot gear would be a potential candidate for the PAC-3 program improvement, he said.

Recent evaluations have shown that PAC-3s can be mounted successfully on tactical fighter aircraft, Trotsky said. While sea-based Aegis BMD systems mounted on ships have performed well, he noted there are about 16 such vessels, while there may be a need for a far greater number of BMD platforms, and aircraft would fill that role far more economically, since a plane costs less than a ship.

One nation concerned about ballistic missile threats is Japan, he noted, observing that North Korean belligerent missile tests last summer prompted a special session of the Japanese legislature.

Last year, Lockheed attained progress in several missile and BMD programs, briefers noted.

For example, the Aegis BMD system successfully intercepted a separating ballistic missile target using the Aegis 3.6 Weapon System, the latest upgrade with enhanced multi- mission capability. This test was the first to include international participation: The Japanese destroyer Kirishima (DDG 173), equipped with the Aegis weapon system, tracked the ballistic missile target.

The Navy and Missile Defense Agency certified Aegis BMD 3.6 for tactical deployment in August, marking the first system of the BMDS to obtain full certification. An unsuccessful test in December, attributed to an incorrect system setting, is still being analyzed and will be rescheduled this spring.

Lockheed received a $376 million contract from the Army Aviation and Missile Command (AMCOM) for hardware and services associated with the PAC-3. That contract includes production of 112 hit-to-kill PAC-3 Missiles, launcher modification kits, spares and other equipment, as well as program management and engineering services.

Initial delivery of the PAC-3 Stockpile Reliability Test Missiles to the Army marked the first major milestone in the operations and support phase of the program. The PAC-3 missile conducted two successful flight tests in 2006.

The Command, Control Battle Management and Communications program (C2BMC) completed over 14 spiral deliveries in 2006 reflecting a very flexible and rapid delivery capability. C2BMC is operational across fourteen time zones and is the “S” in the Ballistic Missile Defense System, integrating various elements of the entire system. The Forward Based X- Band Radar was integrated into the system in 2006, merging another long range sensor into the overall BMDS.

This year, C2BMC will start to implement a new requirement for concurrent testing and training across the entire BMD system while simultaneously conducting real world operations, referred to as CTTO.

MDA’s Targets and Countermeasures program successfully completed three missions in 2006, launching the scientific payloads for two missions of the MDA’s Critical Measurements/Countermeasures program and providing the target missile with a separating reentry vehicle for a test of the Aegis Ballistic Missile Defense Weapon System.

The program, for which Lockheed Martin is the prime contractor, has achieved a 100 percent mission success record since launching its first target in 2005, according to the company.

And just this week, the Air Force gave Lockheed a $32.5 million contract for the Combatant Commander’s Integrated Command and Control Systems (CCIC2S) program.