Lockheed's PAC-3 knocks down a contract

Anti-missile system scores second successful intercept

September 17, 1999|By BLOOMBERG NEWS

WASHINGTON -- Lockheed Martin Corp.'s PAC-3 anti-missile system scored a successful intercept of a surrogate enemy missile yesterday morning at White Sands Missile Range, N.M., paving the way for an early production contract, according to U.S. Defense Department officials.

Congress required the missile, an upgraded version of Raytheon Co.'s Patriot missile system, to score two successive "hit-to-kill" intercepts before it proceeds to production. Yesterday's success was the second.

Lockheed Martin's Dallas-based Missiles and Fire Control unit will receive a production contract eventually valued at $153.6 million to produce 92 missiles through 2001. No. 2 contractor Boeing Co. makes the missile's seeker, or electronic eyes. Raytheon is integrating the missile launcher and ground radars into one system. The entire program is valued at $7.7 billion. The Pentagon plans to buy up to 560 missiles.

"We are pleased that PAC-3's test was successful and we expect it will continue to be a successful program," said Cheryl Irwin, a Pentagon spokeswoman.

Lockheed Martin's chief operating officer, Peter Teets, last week pointed to the PAC-3 test as a key indicator of whether the company would demonstrate a string of successes after a year of embarrassing and costly failures with key programs, including the Titan IV-B rocket launcher.

Lockheed is developing the PAC-3 as a smaller, third-generation version of the Patriot, which is used to protect front-line troops by intercepting incoming short-range ballistic missiles. The Patriot gained fame by knocking out Iraqi Scud missiles during the Persian Gulf war.

The PAC-3 is designed to work in an overlapping system with Lockheed's Theater High Altitude Area Defense system, or THAAD. THAAD is being designed to intercept higher-flying missiles and provide protection for a broader area than PAC-3.

The missile also is viewed as a prime candidate to provide short-range missile defenses for South Korea and Taiwan.

The successful test came the same day that Robert Walpole, a senior CIA official, told the Senate Foreign Relations Committee that "the probability that a missile with a weapon of mass destruction will be used against U.S. forces or interests is higher today than during most of the Cold War."

Lockheed Martin and the Army are two years late and 37 percent over budget in developing the third generation of the PAC-3, according to Pentagon documents and officials.

The missile will not be deployed until May 2001 at the earliest; the Pentagon initially expected it to be ready last month. Lockheed may have to pay about $70 million to cover its portion of the cost overrun.

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