Long-Term Contract To Be Decided In Impending Obama Administration

The Missile Defense Agency gave The Boeing Co. [BA] a cost-plus-award-fee contract worth up to $397.9 million to continue the Ground-base Midcourse Defense (GMD) program for six months, leaving to the Obama administration a decision on a larger long-term GMD contract.

While the agency has said Boeing would continue to lead the program, instead of having a new competitive bidding contest for GMD through 2013, the Obama transition team is asking basic questions about the existence of many programs, including the Constellation program to develop a next-generation U.S. spacecraft system replacing the space shuttles. (Please see separate story in this issue.)

One clear point, however, is that GMD is the one U.S. program providing a shield against long-range, ICBM enemy missiles.

That new contract award comes after the GMD system scored a winning hit against a target missile in a test. (Please see Space & Missile Defense Report, Monday, Dec. 8, 2008.)

Missile defense proponents lauded the feat, while GMD opponents in Congress noted that the target missile failed to release countermeasures, saying such a challenge is needed for the GMD interceptor to face a realistic test.

Congressional critics also have assailed the proposed European Missile Defense (EMD) system, which would employ a two-stage variant of the three-stage GMD interceptor. The critics want to see the EMD interceptor tested first, which could add years to the EMD being installed in the Czech Republic (radar) and Poland (interceptors in ground silos).

Meanwhile, Iran is continuing to produce nuclear materials, and also is acquiring missiles of steadily longer ranges. Iran will have missiles capable of reaching Europe within two to four years, according to various estimates.

The six-month funding contract for the GMD system is a temporary measure, until a long-term "core completion" contract for GMD development is awarded, perhaps in June. That throws the future of the GMD program into the administration of President-elect Obama, who takes office Jan. 20.

While Obama has said he supports the United States being able to defeat incoming enemy missiles, he also has said he wishes to see missile defense systems prove that they work against enemy missiles.

The interim GMD contract is a cost plus award fee and cost plus fixed fee pact, sole-source pact. It would fund Block 3 development and fielding activities for half a year. Funding is available in the already-approved missile defense budget for the fiscal year 2009 ending Sept. 30. The real question now is what Obama will propose for funding missile defense programs in fiscal 2010, and what Congress will do with that proposal. Obama is a Democrat who won a wide Electoral College majority, and Congress will have increased Democratic-held seats, so the party now has control of all three centers of power, the White House, Senate and House.

Rep. Ellen Tauscher (D-Calif.), who chairs the House Armed Services Committee strategic forces subcommittee with oversight of missile defense programs, sharply questions whether the GMD system has been tested adequately. (Please see Space & Missile Defense Report, Monday, Dec. 15, 2008.)

She also has favored moving funds from programs still in development, such as the Boeing-led Airborne Laser, to programs that are developed and operational, such as the Aegis/Standard Missile sea-based missile defense system.