Nuclear Missile Overhaul Falls to Small Pool of Contractors
26 Août 2017 - 3:29PM
Dow Jones News
By Doug Cameron
The Pentagon is pitting two American contractors against each
other as it looks to replace the nation's land-based
intercontinental ballistic missiles.
But with Russia and China modernizing their nuclear forces and
North Korea becoming a potential nuclear threat, some defense
experts say a better plan would be to make Boeing Co., Northrop
Grumman Corp. and others work together to confront mounting
challenges.
This week, the Pentagon picked teams led by Boeing and Northrop
to vie for the latest piece of its overhaul of the county's nuclear
force, with almost $700 million in contracts for design work to
develop replacements for aging Minuteman III missiles deployed in
silos across the Great Plains.
Lockheed Martin Corp. was eliminated from the contest for the
Ground-Based Strategic Deterrent program, which is expected to
eventually cost $85 billion. Lockheed could lodge a protest, as it
did unsuccessfully after Northrop bested its joint bid with Boeing
to build a new long-range bomber in 2015, though it declined to
comment ahead of a debrief from Air Force officials.
The Pentagon is due to decide in 2020 which team will build the
intercontinental ballistic missiles and new communications
infrastructure, as well as refresh the silos.
Richard Safran, an analyst at Buckingham Research Group, said
the project could still draw Lockheed and other defense firms,
including General Dynamics Corp. and Orbital ATK Inc., into the
project under Boeing or Northrop leadership. Aerojet Rocketdyne
Inc. this week said it would provide the rocket motors for the
Northrop offering.
Boeing is expected to disclose its partners at a military trade
show next month, according to people familiar with its plans. The
company said in a statement Monday that it would draw on the best
of Boeing to deliver the "capability, flexibility and affordability
the mission requires," with work focused at three of its plants in
Alabama, Utah and Ohio.
Northrop Grumman said in a statement Monday that it looks
forward "to the opportunity to provide the nation with a modern
strategic deterrent system that is secure, resilient and
affordable."
Maj. Gen. Roger Burg, who retired from the Air Force in 2010
after a career that included heading the ICBM units, said pooling
the work of multiple companies under one joint effort is desirable
as many of the experts who built the original system in the 1970s
have retired.
"We probably have just enough capability to have one really good
team," said Maj. Gen Burg, who advised two of the teams in the ICBM
contest.
After years of delays caused by budget cuts, the Pentagon is
pressing ahead with a simultaneous refresh of all three legs of the
so-called nuclear triad defense system: land-based missiles,
bomber-launched missiles and those on a fleet of submarines. The
Pentagon plans by 2020 to select one contractor to build 600
missiles, with 400 of those to be deployed on alert and the balance
held for testing.
The total bill is estimated by some outside experts to be more
than $500 billion over the next 20 years -- some 5% of the total
defense budget. The Pentagon hasn't disclosed a final estimate as
most of the programs are classified, and officials declined to
comment on future contracting arrangements.
Pushing ahead with the programs could lead to a sustained
increase in military spending or prove to be a double-edged sword
for defense contractors, with some concerned that other contracts
for new ships and fighter jets could be crowded out by a singular
focus on the nuclear overhaul.
President Donald Trump has supported the Pentagon push even as
critics such as former Defense Secretary William Perry have said
plans to replace the missiles are too costly. With a new bomber
capable of delivering nuclear cruise missiles and Columbia-class
submarines carrying missiles under construction, Mr. Perry and
other defense experts argue the U.S. doesn't need a third method of
delivering nuclear warheads to deter adversaries.
"We continue to wonder about the logic and cost of replacing
land-based ICBMs," said consultant Byron Callan, of Capital Alpha
Partners LLC.
At the same time, lawmakers have questioned the trajectory of
separate work meant to develop a replacement cruise missile that
can be delivered from bombers.
The Pentagon this week awarded Lockheed and Raytheon separate
$900 million deals to continue the development of the long-range
stand off missile, a program expected to cost around $20 billion.
Boeing, which supplies the aging missiles that will need to be
replaced in the late 2020s, had also bid for the cruise missile
deal.
A final decision on which company will build the missiles will
be made in 2022, if funding is agreed on.
Lockheed Martin said in a statement Wednesday that it's
experience in cruise missiles "will provide the most reliable,
capable, sustainable and affordable program in defense of our
nation and our allies." Raytheon declined to comment.
(END) Dow Jones Newswires
August 26, 2017 09:14 ET (13:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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