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03 Dec 03. A Northrop Grumman Corp.-Raytheon Co. team has won a contract worth as much as $4.5bn over eight years to develop an antimissile rocket capable of knocking out warheads in their first five minutes of flight, the Pentagon said on Wednesday.

The winners beat out a rival team made up of Lockheed Martin Corp. and Boeing Co. to build the “kinetic energy interceptor,” part of President Bush’s planned multilayered shield against ballistic missiles such as those that could be launched by North Korea. The interceptor would destroy a target by smashing into it when a missile is most vulnerable, during its boost or early-ascent flight stages, before decoys may be deployed. In a successful intercept, the missile and its warhead, possibly tipped with chemical, nuclear or biological weapons, might fall back on the attacking nation.

The Bush administration has earmarked $50 billion over the next five years to build a missile defense with an initial, rudimentary, capability to shoot down incoming warheads by next Sept. 30. Los Angeles-based Northrop will lead the team. Raytheon, based in Lexington, Massachusetts, will be the chief subcontractor responsible for developing and integrating the interceptor and a significant portion of weapon system engineering, the companies said.

The Pentagon’s Missile Defense Agency said it had awarded the contract without regard to a recent management shake-up and ethics issues dogging Boeing, which won the prime contract for integrating the overall ground-based leg of the missile defense system in 1998. Chicago-based Boeing had competed “without any stigma,” said Rick Lehner, a missile agency spokesman. “Recent events had nothing to do with the fact that they were not selected.”

The winners wisely relied on a “proven” design that adapted technology already being used on the Standard Missile 3, the interceptor on Aegis cruisers, Air Force Maj. Gen. Henry Obering, the missile agency’s deputy chief, told Reuters in a telephone interview.

The initial installment of the contract is worth about $56 million, Northrop Chief Executive Ron Sugar said in a conference call with reporters, not enough to change the company’s earnings guidance for the coming year.

“This is a very important win for Northrop Grumman,” he said. “It solidifies our position as a prime contractor in missile defense. It firmly establishes our company as the top-tier systems integrator.”

In addition, Sugar said, it validated the acquisition last year of TRW Inc. to bolster Northrop’s position in missile defense. The single interceptor design chosen for this contract is compatible with both land-and sea-basing, the Pentagon said.

The first flight test of the new land-based interceptor is scheduled for 2009, Northrop officials said. It could be used in a “layered” defense as early as 2010, the Pentagon said.

The competing teams each had won $10 million contracts for conceptual design work on the interceptor. The kinetic energy interceptor complements other missile defense programs now in development and testing. Among these are ground-based interceptor missiles and their “kill vehicles” that could attack warheads in the middle of their flights, when they are coasting through space.

After being released, an exo-atmospheric kill vehicle is supposed to be guided to the hostile warhead by onboard infrared sensors and to destroy it by direct impact.

Boeing had also come in for criticism of its handling of the “kill vehicle,” analogous to the contract awarded Wednesday, for the ground-based midcourse missile defense. The contract to build that interceptor was awarded mainly for reasons other than technical merit after the misuse of proprietary information by Boeing employees, the General Accounting Office, Congress’s investigative arm, said on Jan. 30.

Raytheon won that contract on or about Dec. 1, 1998, after Boeing workers, who had a rival des

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