Raytheon Co. won a $523.4 million contract Thursday to modernize Kuwait’s Patriot missile defense systems as the Waltham, Massachusetts-based defense giant continues to set its sights overseas.
The company will upgrade Kuwait’s systems to so-called “configuration three-plus” by digitizing the radar and upgrading the software. New additions also include the modern adjunct processor — a commercial off-the-shelf chassis equipped with 30-inch touch screens for a more user-friendly interface.
Raytheon has 4,000 employees in the Greater Washington area.
Raytheon (NYSE: RTN) will upgrade six of Kuwait’s Patriot fire units — a combination of the radar, the command and control station and the missile launcher.
Currently, 13 countries operate Patriot systems including the U.S. In addition to Kuwait, Middle Eastern customers include Saudi Arabia, Israel, the United Arab Emirates and Qatar. Kuwait has been a Patriot customer since 1992.
Patriot partner members pay into an “engineering fair share” contract based on the number of units they have deployed. Those customers then meet once a year to decide the system’s future improvements and the costs are shared among all members.
Raytheon unveiled a system in March that employs new radar that monitors threats by sending out pulses in different time intervals to steer the beam. This is an upgrade from previous systems that steered it mechanically — a highly inefficient process when you’re trying to detect fast-moving tactical ballistic missiles. It also uses Gallium Nitride chips in its transmitters, which better amplify the radar signal than the Gallium Arsenide chips they replace.
This prototype was in part a response to Patriot customers looking for a missile defense system with 360-degree capability. There is a renewed interest among countries like Poland, Turkey, the UAE and Germany to up their ballistic missile defenses in the face of growing threats around the world.
Raytheon is in competition with Bethesda-based Lockheed Martin Corp. (NYSE: LMT) to sell ballistic missile defense hardware to U.S. allies. Lockheed, partnering with the European arms manufacturer MBDA, is marketing its Medium Extended Air Defense System on the global stage and has netted Germany as its first customer.
While Germany chose a MEADS-based system for its future missile defense needs over Patriot in June 2015, it still needs to award the contract and that will require a vote by the German parliament. Raytheon has positioned itself as the alternative should MEADS fail to live up to German requirements.
Raytheon is also competing with Lockheed over Poland. Poland chose Patriot in April 2015 for its next-generation missile defense system, but since an October 2015 election changed the political landscape, the Polish government is rethinking its decision.
Analysts seem confident, however, that Poland will go with Patriot and Germany will stick with MEADS.
Other key battleground countries for the two vendors include Turkey and Sweden.
Author: James Bach
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