US missile systems maker Alliant Techsystems (NYSE:ATK) has joined the Boeing (NYSE:BA) and Israel Aircraft Industries Ltd. (IAI) consortium that is participating in Israel’s Ministry of Defense Israeli Short-Range Ballistic Missile Defense (SRBMD) tender. The tender is worth $50-100 million. A consortium of Raytheon (NYSE: RTN) and Rafael Armament Development Authority Ltd. is also participating in the tender.
The tender, part of the Ministry of Defense’s Homa project, is intended find a solution to Kassam rockets, since Palestinian terrorist organizations have the capability to threaten infrastructure installations in the Ashkelon area. If Kassam rockets are smuggled into the West Bank or produced there, they could threaten installations in central Israel.
The IAI-Boeing proposal is based on their collaboration on the Arrow anti-ballistic missile. They plan to adapt Arrow technology to intercept short-range rockets.
Alliant, headquartered in Minnesota and with a plant in Mississippi, manufactures rocket engines for the Arrow. If IAI and Boeing win the SRBMD tender, Alliant will manufacture engine components for the rocket, which is based on the Arrow, and which forms the core of the defense system.
"The Boeing-ATK partnership has been a success story for the Arrow program," said Boeing Integrated Missile Defense VP Debra Rub-Zenko, "Our exclusive teaming agreement for SRBMD will build upon that vital relationship, ensuring an advanced solution for Israel's short-range missile defense needs."
As with previous Israeli tenders, US-Israeli consortia participating in the SRBMD tender do not merely want to demonstrate high technological ability at competitive prices, but also want their systems to be eligible for US government funding for the proposed project.
Of the $133 million budget the US Congress has approved for the Arrow missile project for the next fiscal year, $10 million in allocated for defense against short-range missiles.
Bringing in Alliant into the SRBDM project could ensure that a large Congressional bloc will support budget appropriations for short-range missile defense, provided that IAI and Boeing win the tender: two senators and eight representatives from Minnesota, Alliant’s home state; and two senators and four representatives from Mississippi, where the company’s rocket systems plant is located.
Sources knowledgeable about Israel’s defense industries believe that the short-range missile defense project could expand into a program amounting to hundreds of millions of dollars, because of the export potential to countries facing similar threats.
Published by Globes [online], Israel business news - www.globes.co.il - on March 28, 2006
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