The United States can no longer afford to purchase and field the trinational Medium Extended Air Defense System (MEADS), according to the Pentagon.
DoD has decided to continue the design and development (D&D) phase of the program under the current memorandum of understanding, but after schedule and cost overruns, the United States can no longer afford to fund production of the system, according to a Feb. 11 Pentagon fact sheet on the program.
Managed by NATO, MEADS is being developed for the United States, Italy and Germany. Lockheed Martin leads MEADS International, the industry team developing the system for the three countries.
The United States cannot afford to increase funding for the D&D phase as requested by the NATO MEADS Management Agency, the fact sheet said. Instead, it will provide up to the cost ceiling established in the current memorandum of understanding ($4 billion in 2004 dollars).
Since its conception in the mid-1990s, MEADS has suffered from a number of technical and management problems that have led to delays and cost growth.
MEADS was originally slated for production in 2007. When the countries signed an agreement for the D&D phase in 2004, production was moved to 2014.
This fall, the three countries had to consider whether to approve a restructuring proposal by the NATO MEADS Management Agency, which called for extending design and development by 30 months from the original 110-month program established in 2004. This extension would require at least $974 million of additional U.S. funding. The Pentagon's Cost Assessment and Program Evaluation Office put the figure at $1.16 billion, according to the Pentagon.
Currently, the U.S. funds 58 percent of MEADS, Germany 25 percent and Italy 17 percent.
Under this new plan, U.S. production would not begin until 2018.
The Pentagon has selected option two, saying "terminating the program now, just after successful completion of the MEADS Critical Design Review, would force the nations to devote significant funding to contractor termination costs instead of using this funding to bring MEADS development to a viable level of maturity."
With the remaining funding, the Pentagon proposes focusing the remaining activities on a "proof of concept" effort "that will provide a meaningful capability for Germany and Italy and a possible future option for the United States."
MEADS was designed to replace the Patriot systems in the United States and Germany and the Nike Hercules system in Italy. The proof-of-concept D&D program would end by 2014, when the current memorandum of understanding expires.
The Pentagon says this is the best option because it allows the countries to harvest the technologies.
To complete the D&D phase of the program under the 2004 cost limits, the United States will pay roughly $804 million between 2011 and 2013.
"This work would place the D&D program on stable footing should Germany and Italy wish to continue a MEADS development and production effort after the current funding is expended," the Pentagon says. "The same options would be available to the U.S. if its air defense plans should change."
However, the United States cannot afford to both purchase MEADS and make "required" upgrades to Patriot over the next two decades, the Pentagon says.
The Pentagon has already spent $1.5 billion on MEADS. In addition to the $974 million required by the NATO MEADS Management Agency, the Pentagon estimates another $800 million would be needed for U.S.-unique test and evaluation activities.
"The U.S. is willing to accept some risk in our air defense portfolio in the near term, not just in MEADS, but in other major acquisition programs (for example, the [Joint Land Attack Cruise Missile Defense Elevated Netted Sensor], which has been scaled back, and [the Surface-Launched Advanced Medium-Range Air-to-Air Missile], which has been canceled) in order to increase investments in new capabilities that our soldiers can use today to counter threats in Forward Operating Bases in Afghanistan, such as capabilities to Counter Rockets, Artillery and Mortars (C-RAM)," the Pentagon fact sheet says.
The Pentagon maintains that the United States can achieve some of MEADS' promised capabilities through its existing missile defense systems.
Until now, the Pentagon's main reason for continuing with the program has been its unique opportunity for trans-Atlantic joint development.
In the DoD fact sheet, the Pentagon says that international cooperative programs are just one way that Europe and the United States can interact in the defense industry arena. They are becoming "increasingly less statistically relevant as trade continues to open on both sides of the Atlantic and global supply chains become more robust," it said.
The United States cannot afford to increase funding for the design and development phase as requested by the NATO MEADS Management Agency, according to a Pentagon fact sheet on the program. (Lockheed Martin)
Managed by NATO, MEADS is being developed for the United States, Italy and Germany. Lockheed Martin leads MEADS International, the industry team developing the system for the three countries.
The United States cannot afford to increase funding for the D&D phase as requested by the NATO MEADS Management Agency, the fact sheet said. Instead, it will provide up to the cost ceiling established in the current memorandum of understanding ($4 billion in 2004 dollars).
Since its conception in the mid-1990s, MEADS has suffered from a number of technical and management problems that have led to delays and cost growth.
MEADS was originally slated for production in 2007. When the countries signed an agreement for the D&D phase in 2004, production was moved to 2014.
This fall, the three countries had to consider whether to approve a restructuring proposal by the NATO MEADS Management Agency, which called for extending design and development by 30 months from the original 110-month program established in 2004. This extension would require at least $974 million of additional U.S. funding. The Pentagon's Cost Assessment and Program Evaluation Office put the figure at $1.16 billion, according to the Pentagon.
Currently, the U.S. funds 58 percent of MEADS, Germany 25 percent and Italy 17 percent.
Under this new plan, U.S. production would not begin until 2018.
Three Options Considered
Due to these changes, the Pentagon considered three options: terminating the program immediately, continuing development within the 2004 funding limits, or adopting the NATO MEADS Management Agency's plan and providing the additional funding. The Pentagon has selected option two, saying "terminating the program now, just after successful completion of the MEADS Critical Design Review, would force the nations to devote significant funding to contractor termination costs instead of using this funding to bring MEADS development to a viable level of maturity."
With the remaining funding, the Pentagon proposes focusing the remaining activities on a "proof of concept" effort "that will provide a meaningful capability for Germany and Italy and a possible future option for the United States."
MEADS was designed to replace the Patriot systems in the United States and Germany and the Nike Hercules system in Italy. The proof-of-concept D&D program would end by 2014, when the current memorandum of understanding expires.
The Pentagon says this is the best option because it allows the countries to harvest the technologies.
To complete the D&D phase of the program under the 2004 cost limits, the United States will pay roughly $804 million between 2011 and 2013.
"This work would place the D&D program on stable footing should Germany and Italy wish to continue a MEADS development and production effort after the current funding is expended," the Pentagon says. "The same options would be available to the U.S. if its air defense plans should change."
However, the United States cannot afford to both purchase MEADS and make "required" upgrades to Patriot over the next two decades, the Pentagon says.
The Pentagon has already spent $1.5 billion on MEADS. In addition to the $974 million required by the NATO MEADS Management Agency, the Pentagon estimates another $800 million would be needed for U.S.-unique test and evaluation activities.
'Accept Some Risk'
Because of the schedule delays, the United States would not be able to replace Patriot with MEADS when originally envisioned. This means funds would have to be spent on Patriot modernization and MEADS purchases simultaneously, something the Pentagon cannot afford in the "current DoD budget environment," the fact sheet says."The U.S. is willing to accept some risk in our air defense portfolio in the near term, not just in MEADS, but in other major acquisition programs (for example, the [Joint Land Attack Cruise Missile Defense Elevated Netted Sensor], which has been scaled back, and [the Surface-Launched Advanced Medium-Range Air-to-Air Missile], which has been canceled) in order to increase investments in new capabilities that our soldiers can use today to counter threats in Forward Operating Bases in Afghanistan, such as capabilities to Counter Rockets, Artillery and Mortars (C-RAM)," the Pentagon fact sheet says.
The Pentagon maintains that the United States can achieve some of MEADS' promised capabilities through its existing missile defense systems.
Until now, the Pentagon's main reason for continuing with the program has been its unique opportunity for trans-Atlantic joint development.
In the DoD fact sheet, the Pentagon says that international cooperative programs are just one way that Europe and the United States can interact in the defense industry arena. They are becoming "increasingly less statistically relevant as trade continues to open on both sides of the Atlantic and global supply chains become more robust," it said.
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