Air Force Withholds Funds from Raytheon on Missile Deal

Tuesday, 20 Mar 2012 08:26 PM

 

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The U.S. Air Force said on Tuesday it was withholding $621 million in payments from Raytheon Co. until the company speeds up deliveries of an advanced U.S. air-to-air missile it is building for the Air Force and the Navy.

Air Force spokesman Lieutenant Colonel Wesley Miller said the government had suspended $419 million in payments from fiscal 2010 funds to Raytheon, effective Feb. 3, on top of $202 million already withheld from fiscal years 2007 to 2009.

Miller said the Air Force believed the move would spur Raytheon to get the program back on track. He said Raytheon had delivered 359 missiles to date, 193 fewer missiles than the 552 required by the contract.

He said payments to Raytheon would resume once it began consistent deliveries of working missiles and said the government was working with the company to resolve the issue.

Miller said the slow missile deliveries stemmed from issues with the work of subcontractor Alliant Techsystems on the solid rocket motors that power the missiles.

But he said the slow missile deliveries were not having any impact on the U.S. military's ability to fight, since the new missiles have not yet been fielded.

Raytheon is building the newest version of the Advanced Medium-Range Air-to-Air Missile, which are to be used by Air Force fighter jets and Navy planes that fly off carriers.

Raytheon had no immediate comment on the issue. ATK could not be reached for comment.

Last summer, Raytheon said it was working with the Norwegian defense company NAMMO to qualify an alternate rocket engine for the AIM-120 Advanced Medium Range Air-to-Air Missile, or AMRAAM.

That motor would be interchangeable with the current one built by ATK and would provide the same performance, it said at the time, noting that having a second source for the motors would allow Raytheon to meet its commitment to the U.S. military and other countries that are buying the new missile.

© 2014 Thomson/Reuters. All rights reserved.

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