Boeing Lands $6.6 Billion Missile Defense Agency Contract

Missile Defense Agency has awarded Boeing a $6.6 billion contract to supply 20 Ground-Based Interceptors, build a silo and to maintain the GMD – Ground-based Midcourse Defense System. In the event of exercising all options, the total size of the contract could be worth approximately $12.6 billion. At the moment there are 44 ground-based interceptors deployed in the U.S. Four of them are in California’s Vandenberg Air Force Base while 40 of them are in Fort Greely, Alaska.

With fears of missile attacks on the U.S. by Iran and North Korea growing funding has been boosted to enable the building of a robust system that is capable of defending the homeland against threats posed by Inter-Continental Ballistic Missiles. In fall last year the Missile Defense Agency and the Pentagon had indicated that they needed to increase the number of Ground-based Midcourse Defense System. Last September Pentagon issued a proposal which reprogrammed $136 million that had been allocated in the 2017 fiscal year towards increase the number of GMD interceptors to 64 from 44.

Expansion and improvement

Per the contract announcement Boeing will be required to offer technical capabilities aimed at expanding and improving the system in order to ensure that its capabilities and features remain current and relevant. Boeing will thus work on boost vehicle development as well as the integration of a kill vehicle with a boost vehicle. At the moment Boeing is the GMD System’s prime contractor as no other firm possesses the capabilities required to do the job.

The new deal from the Missile Defense Agency comes in the wake of UPS ordering new Boeing 747 freighters. This has given the model a new lease of life as Boeing had at one point even considered retiring it and replacing it with a more fuel-efficient plane.

Boeing 747

UPS has ordered 14 747-8s and this is expected to cost the shipping company around $5.65 billion. In 2016 UPS had also made an order of 14 747s. Alongside the order for the 747s, UPS also ordered 4 Boeing 767s.

“Our intra-U.S. next-day and deferred air shipments are expanding to record levels, and UPS’s International segment has produced four consecutive quarters of double-digit export shipment growth. To support this strong customer demand, we continue to invest in additional air capacity,” the chairman and chief executive officer of UPS, David Abney, said.

Per IATA – International Air Transport Association, the demand for air freight grew by 9% last year from the previous year. This was fastest growth rate the sector has recorded since 2010.

Leave a Reply