Lockheed Fixes Safety-Switch Flaw That Delayed Missile Contract

Lockheed Martin Corp. has fixed a flawed safety switch that delayed delivery of the first 24 of the Pentagon’s newest interceptor missiles and hindered a contract for the company to build more, the company’s chief financial officer said today.

Repair of the switch, completed between late September and early October, was a prerequisite for Lockheed to win a contract for about two dozen more of the weapons, Bruce Tanner said in a New York presentation. The U.S. Missile Defense Agency said in July that the missiles couldn’t be assembled until repairs were made to the mechanism, intended to prevent accidental launches.

Lockheed’s delivery of the redesigned device was a “significant contributor” to the U.S. Missile Defense Agency’s award of a $298 million contract for the second batch of 26 interceptors in September, Richard Lehner, an agency spokesman, said in an e-mail today. That contract was to have been signed in December 2009.

The interceptors are a centerpiece of the new regional missile defense the Obama administration plans to deploy in the Middle East against Iran’s medium- and long-range ballistic missiles. Batteries of the land-based interceptors would be linked by sensors and radar to the U.S. Navy’s sea-based systems on Aegis-class destroyers and cruisers.

The fix was completed as the U.S. is negotiating a signed contract worth as much as $6.9 billion with the United Arab Emirates, a Persian Gulf nation that is seeking to be the first international buyer of the Terminal High-Altitude Area Defense missile system.

Tanner said the deal, which has been approved by Congress, is proceeding.

“It’s just a question of when the releasability of that system into the UAE is finalized,” Tanner said at the Credit Suisse-Aviation Week Aerospace & Defense Finance Conference in New York. “I don’t think there are huge hurdles to overcome but we are not there yet.”

To contact the reporter on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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