Senate Panel Backs Halting Raytheon Kill-Vehicle Production

Jun 30, 2011 By Gopal Ratnam and Tony Capaccio BLOOMBERG

The Senate Armed Services Committee has backed the Missile Defense Agency’s decision to suspend production of Raytheon Co. (RTN) “kill vehicles” that are designed to destroy incoming ballistic missiles.

The panel, in its report on the Pentagon’s 2012 budget, said the MDA was right in “suspending further production” of the exoatmospheric kill vehicles, which are linked to two test failures of the primary U.S. missile defense system. The suspension should not be lifted until the agency “has verified through extensive testing that the problem has been successfully corrected,” it said.

In January, the MDA halted purchases of the so-called kill vehicles made by Waltham, Massachusetts-based Raytheon. The spacecraft is designed to collide with enemy targets about 200 miles in space while traveling at about 15,000 miles an hour. MDA had bought 12 of 23 units on order before linking them to failures in the two tests, which were conducted in January 2010 and December 2010, according to a report by the Government Accountability Office.

Raytheon is continuing production of “sub-assemblies and the product” except one component whose failure is under investigation, the company’s chief executive officer, Bill Swanson, said in an interview at the Paris Air Show last week. “That’s the portion that has stopped,” he said.

“The final assembly” of the kill vehicles “is the key item that has been halted,” MDA spokesman Richard Lehner said in an e-mail. “The production pause is in effect until the failure investigation” of the December 2010 test is complete, he said. The next intercept test is planned for 2012, he said.

Gates’s Comments

Even with test failures, the ground-based system works, Defense Secretary Robert Gates said in an interview with Bloomberg News today. The MDA is trying to make the system “ever more advanced,” said Gates, who leaves his job tomorrow. He will be succeeded by Leon Panetta, the director of the Central Intelligence Agency.

“I know the base capability of the ground-based interceptors in Alaska,” Gates said. “We have tested them time and again. So, what you’re seeing is trying to move the technology to the next level.” The setbacks from test failures “shouldn’t create in anybody’s mind a growing sense of unease with the program,” he said.

Test Failures

In reports accompanying the 2012 Pentagon budget authorization, defense committees in the House and the Senate said they were concerned about the failures of the two tests in 2010.

The House report said the unsuccessful tests raised doubts about the reliability and effectiveness of the deployed system and also “questions whether there are more systemic issues” within the ground-based Midcourse Missile Defense program. The House report also noted that the system, with interceptors located in Alaska and California, “is currently the only missile defense system that protects the United States homeland from long-range ballistic missile attacks.”

The entire system -- ground-based interceptors mounted with the kill vehicles, satellites, ground- and sea-based radar, and command and control operations -- is overseen by Chicago-based Boeing Co. (BA), which has held the contract since 1998.

The MDA is holding the first competition to pick a contractor that will manage the system, an order valued at as much as $10 billion. The agency on June 7 delayed a decision on the contract until November.

Boeing and its partner, Los Angeles-based Northrop Grumman Corp. (NOC), are competing against a team led by Lockheed Martin Corp. (LMT) that includes Raytheon.