The Ballistic Missile Defense Organization (BMDO) and the U.S. Army announced today that a contractual agreement has been reached between the Theater High Altitude Area Defense (THAAD) system Prime Contractor, Lockheed Martin Missiles & Space (LMMS), and the Government concerning incentives to improve missile performance.
The agreement calls for cost-sharing of up to $75 million if LMMS fails to achieve three body-to-body hits over the remainder of the Program Definition & Risk Reduction (PDRR) phase of the THAAD contract. Five test flights remain in the PDRR test program. The contract modification also allows LMMS to win back a portion of the fee schedule through successful performance within the criteria of the agreement.
The specific monetary value and criteria for the cost-share agreement were negotiated over the past few weeks and finalized July 23 in a modification to the current THAAD contract.
The cost share agreement takes effect immediately and is the final initiative to be implemented in response to a cure letter sent to the contractor by the government shortly after the May 12 flight test failure.
The THAAD program, which is committed to producing an affordable and viable system for the warfighter, will continue with flight test nine scheduled for later this calendar year.