22 December 2000 Pentagon Agency Announces Large Missile Defense Contract The Defense Department's Ballistic Missile Defense Organization issued a large contract to Boeing December 22 to continue development of the National Missile Defense (NMD) system for work beginning in January and running for seven more years. Financial obligations in future fiscal years will be subject to review by the incoming Bush administration. A Defense Department news release says the United States has not yet made a decision to deploy an NMD system and the new contract "does not change the current NMD system architecture or any previously planned system elements." This award is designed to maintain the pace of the NMD test program and prevent interruption of any planned test activities. Following is the text of the release: (a billion refers to a thousand million) National Missile Defense Contract Awarded The Ballistic Missile Defense Organization's (BMDO) National Missile Defense Joint Program Office announced today that The Boeing Company, Space & Communications Group, Anaheim, California will be awarded a cost-plus-award-fee contract for continuing development of the National Missile Defense (NMD) system. The performance period is January 1, 2001, through September 30, 2007, with work performed by Boeing and its major subcontractors, primarily in Huntsville, Alabama; Tucson, Arizona; Sudbury and Bedford, Massachusetts; and Colorado Springs, Colorado. The contract award announced today exercises certain options under the original contract and provides a flexible contract structure to accommodate the President's September 1, 2000, decision on continuing development and testing of the NMD system while deferring a deployment decision to the next administration. This contract (with a potential value of $6 billion) protects the option for the next administration to deploy the NMD system at the earliest possible date, and restricts obligation of funding to funds available to the NMD program in fiscal 2001. Subsequent year obligations will be subject to review and approval by the Department of Defense and the next administration. No decision has been made to deploy a NMD system, and this contract award does not change the current NMD system architecture or any previously planned system elements. The contract has a full potential value of $13 billion, if all future options are exercised. In April 1998, Boeing was selected as the Lead System Integrator (LSI), or prime contractor, for the NMD system. The initial contract awarded to Boeing in 1998 will expire in April 2001, and does not reflect present-day NMD program requirements relating to initial deployment, countermeasures mitigation and the need for an improved test program. Award of the contract today ensures continuity of the development and test program, and eliminates the potential for interruption of planned test activities. The award of the contract announced today is a normal acquisition procedure designed to keep the NMD development and testing program on track. It provides continuity and a disciplined business approach until the new administration decides on its NMD program direction. Based upon several recommendations received by both internal and external experts, the new contract provides the framework for potential enhanced test and evaluation via an expanded test program infrastructure and the implementation of a more extensive countermeasures mitigation program. All future program elements are, of course, subject to discussion by the new administration. (Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov) Return to the Washington File