Boeing loses big missile defense contract

Cost overruns cited in competing programs

Saturday, February 6, 1999


Sometimes rocket science proves too tough, even for rocket scientists.

Because of cost overruns and technical challenges, the Air Force said yesterday that it has terminated contracts worth more than $800 million to TRW and The Boeing Co. for two demonstration projects involving the much-debated National Missile Defense system.

The contract cancellations are part of a restructuring of what is known as the Space-Based Infrared System, a key component of the missile shield the Defense Department wants to deploy by 2005.

That system would protect the United States from an attack by a rogue nation, or an accidental missile launch by Russia or China.

Satellites in low Earth orbit would spot a missile moments after launch and a land-based interceptor would be fired from the United States to destroy it. Boeing and TRW have been competing to develop satellite senors that would detect a missile launch.

"This is rocket science. It's not easy," said John Pike of the Federation of American Scientists. "Anybody who thinks so should look at today's news (the TRW and Boeing contract cancellations). Clearly, the two companies bit off more than they could chew."

The Air Force said the Boeing and TRW programs would have exceeded budget by more than $79 million over the next four years. The contracts had already doubled since they were awarded several years ago, the Air Force said.

Before the cost overruns, the TRW contract was for $683 million, and the Boeing contract was for $148 million.

"Naturally it is disappointing," said Boeing spokeswoman Kathleen Schroeder of the contract termination. "Years of effort have gone into this project."

The Air Force said it hopes to award new contracts by April for a redesigned system that will be "effective and affordable."

Schroeder said Boeing will study the Air Force requirements and submit a proposal in hopes of winning the new contract.

About 150 Boeing workers in Seal Beach and Anaheim, Calif., are involved in the program, she said.

Boeing remains the prime contractor for the National Missile Defense system.

Defense Secretary William Cohen recently said deployment of the shield was being pushed back by at least two years, from 2003 until 2005, because of the many remaining technical challenges.

Building the system is estimated to cost $10.5 billion, he said.

The Defense Department will decide in 2000 whether to go ahead with the project, which would be deployed in either Grand Forks, N.D., or in Alaska.

But Boeing, as prime contractor, must first demonstrate by 2000 that even a rudimentary missile shield will work.

The system is far less ambitious than Star Wars, the much-criticized proposal by former President Reagan for a space-based missile-defense shield against attack by the former Soviet Union.

Star Wars was considered technically and financially impractical.

Cohen has said any decision to deploy the missile system will depend on two things: the level of threat of a missile attack and the Defense Department's technical readiness to build such a defense.

And that task is far from easy.

Pike said the Space Based Infrared System, or SBIRS, is an "extraordinary critical element" of the planned missile shield.

The satellites would give the nation as much as a 30-minute warning of an incoming missile, he said. Ground-based radar would provide less than 10 minutes warning, he said.

"It means that I can have that one site in North Dakota and it (the interceptor) could get down to Miami or up to Bill Gates' home in Seattle or anywhere in between in time to shoot down an incoming missile. Without the satellites, I'm stuck with ground-based radar in North Dakota. I would have time to defend the wheat fields, but not much else."

P-I reporter James Wallace can be reached at 206-448-8040 or [email protected]

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