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Kinetic Energy Interceptor KEI - Contract Activity

Northrop Grumman leads a team of the nation's leading defense companies in developing and testing KEI. Northrop Grumman is responsible for program management, systems engineering, command and control battle management (C2BMC)/fire control, the canister and launcher, integration and test.

Raytheon is responsible for the kill vehicle and associated systems engineering. For KEI, the company is modifying the propulsion system of its ground-based midcourse Exoatmospheric Kill Vehicle, which has successfully intercepted four ballistic missile targets. The KEI sensors are derived from those on Raytheon's SM-3, a sea-based, ballistic missile interceptor.

Key subcontractors to Northrop Grumman and Raytheon include Aerojet, Alliant Techsystems, Ball Aerospace, Booz Allen Hamilton, Davidson Technologies Inc., Information Extraction & Transport Inc., Orbital Sciences Corp., Oshkosh Truck Corp., Photon Research Associates Inc., Rockwell Collins, SAIC, MEI, Schafer Corp., SEI and 3D Research Corporation.

The KEI program is headquartered in Fairfax, Va., with significant amounts of work performed at contractor sites throughout the country. These include Huntsville, Ala.; Chandler, Ariz.; Elkton, Md.; St. Louis, Mo.; Sunnyvale and San Bernardino, Calif. and Clearfield, Utah.

The Missile Defense Agency (MDA) announced plans to release the draft Request for Proposal (RFP) for the Kinetic Energy Interceptors (KEI) Capabilities on 17 January 2003. To qualify as a prime contractor, the contractor's team must have recent, relevant experience in all of the following seven areas: (1) weapon system integration and test, (2) booster development, (3) kill vehicle development, (4) launcher development/integration, (5) integration with external sensors, (6) command, control battle management and communications and (7) missile production.

On 31 March 2003 a team composed of Northrop Grumman Corporation (NYSE:NOC) and Raytheon Company (NYSE:RTN) was awarded a contract by the Missile Defense Agency (MDA) to proceed to the next phase of the Kinetic Energy Interceptor (KEI) program competition. Under a $10 million, eight-month contract, Northrop Grumman/Raytheon was one of two teams chosen for the concept design phase of the program. Northrop Grumman is leading the team and serving as systems integrator. Raytheon is the principal subcontractor responsible for developing and integrating the interceptor and providing a significant portion of weapon system engineering. The KEI program's Concept Design stage also included Lockheed Martin and team member Boeing working under a $10 million study contract awarded by MDA in March 2003.

On June 17, 2003 ATK (Alliant Techsystems, NYSE: ATK), a leading provider of solid boost, upper-stage, and control system propulsion for missile defense applications, was selected to support concept definition studies by the two prime contractor teams competing to define a boost-phase defense capability for the U.S. Missile Defense Agency (MDA). ATK Elkton, Elkton, Md., supported the Lockheed Martin/Boeing and Northrop Grumman/Raytheon teams during the eight-month concept definition phase of the MDA Kinetic Energy Interceptor (KEI) program.

On August 22, 2003 Lockheed Martin [NYSE: LMT] announced that it will conduct final assembly of its Kinetic Energy Interceptor (KEI) in Courtland, AL, if selected by the Missile Defense Agency (MDA) to proceed as prime contractor on the program.

The program's schedule called for MDA to select a single contractor to perform the Development and Test phase of the program in late 2003. Final award to one prime team for the development and test phase of the KEI program is valued at more than $4 billion over five years. Overall responsibilities of the prime will include systems engineering, systems integration and test, command and control, battle management, communications and launcher development.

On 03 December 2003 the Missile Defense Agency (MDA) awarded a Northrop Grumman Corporation (NYSE:NOC) and Raytheon Company (NYSE:RTN) team the Kinetic Energy Interceptors (KEI) contract. Led by Northrop Grumman, the industry team will develop and test this critical boost phase element of the Agency's global layered missile defense system. The KEI contract is valued at more than $4 billion over eight years. The Northrop Grumman/Raytheon team would move forward with its design and begin managing the development and test phase, leading to planned deployment of this new land-based element initially planned for the 2010-2012 timeframe. KEI will complement the other boost, midcourse and terminal defense interceptor programs currently underway.

Raytheon is developing the kill vehicle, Orbital is designing the booster, ATK will provide the engine, and Aerojet will provide the Divert and Attitude Control System. The Northrop Grumman/Raytheon design includes a mobile land-based launcher built by Northrop Grumman and subcontractor SEI; a Raytheon-built interceptor that will be faster and more agile than any other interceptor to date; a HMMWV that will house the command and control battle management and communications system; and satellite receivers to process the signal that a hostile missile has been launched. The equipment is highly mobile and can be easily loaded onto a C-17 aircraft and transported worldwide.

Northrop Grumman's key missile defense programs include building the Defense Support Program satellite, the first component in the Ballistic Missile Defense system to detect a hostile launch; prime contractor for the Joint Tactical Ground Station; prime contractor developing the Space Tracking and Surveillance System (STSS); providing payloads and associated mission processing for SBIRS-High and STSS; developing and fielding the Ground-based Missile Defense (GMD) fire control/communications system (formerly known as BMC3) and the command launch equipment command and control (GMD CLE C2) system; and prime contractor for the Joint National Integration Center (JNIC) where ballistic missile defense war games are conducted. Northrop Grumman is also providing engineering support services and active/passive sensor technology expertise directly to MDA. Northrop Grumman is developing the high-power chemical laser component of MDA's Airborne Laser (ABL) program. The company is the U.S. Army's contractor for the Mobile Tactical High-Energy Laser, and also is playing a leading role developing and fielding the Aegis weapon system, the major sea-based element of missile defense. Targets and countermeasures work includes serving as prime contractor for the Liquid Booster program, and providing systems engineering and technical assistance to the Rocket Systems Launch program which supports the assembly and launch of target vehicles from Vandenberg Air Force Base for each GMD test.

Raytheon is a leader in missile defense systems, from surveillance, to BMC3, to interceptors and kill vehicles. Raytheon produces the Exoatmospheric Kill Vehicle for MDA's GMD program and the Standard Missile-3 (SM-3) including the kinetic warhead for the sea-based Aegis Ballistic Missile Defense program. Raytheon interceptors have scored a total of eight successful intercepts. Raytheon is a major player in the GMD element providing a family of radars including the Upgraded Early Warning Radar, Upgraded Cobra Dane Radar, Sea-Based Test X-Band Radar, the Ground-Based Radar-Prototype and the TPS-X Radar. Additionally, Raytheon is the sensor provider for the STSS Block 06 program and supplies the tracking and illumination laser on the ABL and the JNIC. Raytheon is the prime contractor for the combat proven Patriot Weapon System and is a key contractor on the THAAD program, responsible for the THAAD radar, a significant portion of the THAAD BMC2 and a significant portion of weapon systems engineering and test.

The prime contract awarded in December 2003 was based on a number of innovative acquisition strategies. First, the program gave competing contractors flexibility to design a system that met only one broad requirement-that the KEI element be capable of reliably intercepting missiles in their boost/ascent phase. MDA did not set cost or schedule requirements or specify how the contractors should design the system. Second, upon award of the development contract, the program locked the winning contractor into firm, fixed-price commitments for the production of a limited number of interceptor, launcher, and battle-management components. Third, the program office included an option in the contract for a commercial type "bumper-to-bumper warranty." Finally, the contract stipulates that the contractor earns an award fee only if flight tests are successful.




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