Raytheon Missile Delay Causes $198 Million Cut in Defense Bill

Delivery delays with Raytheon Co. (RTN)’s most advanced air-to-air missile for the U.S. Air Force and Navy prompted House and Senate budget negotiators to cut $190 million from the program.

The House and Senate are scheduled to vote on the legislation starting today, a $518 billion spending program for the Pentagon that’s contained in a catchall spending bill. Lawmakers cited continued contract delays as they cut about 38 percent from an original $498 million to buy additional missiles.

Raytheon’s Tucson, Arizona-based Missile Systems unit, as of May 31, was 136 missiles behind schedule, delivering 225 of 361 due by that date, according to the most recent data available from the Air Force. The backlog grew from 87 in December 2010, increasing each month to 129 in April to 136, according to service figures.

The missiles are the newest version of the Advanced Medium- Range Air-to-Air Missile. These are operational missiles intended for deployment to Air Force fighter wings and Navy aircraft carriers once testing is done and it’s declared combat- ready in fiscal 2013.

Raytheon spokesman John Patterson referred all comment to the Air Force. Air Force spokeswoman Jennifer Cassidy didn’t immediately respond to an e-mail seeking updated contract information.

The Raytheon missile has been bought by more than 33 allies, including Jordan, Morocco and Kuwait.

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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