By Jim Wolf
WASHINGTON, June 11 (Reuters) - The Pentagon's Missile Defense Agency has formally ended Northrop Grumman Corp's Kinetic Energy Interceptor program, once valued at $6.3 billion, despite the company's push to carry out what would have been a key test in September of the missile-defense technology.
Northrop was notified on Wednesday of the termination, which was 'for the convenience of the government,' not because of any company performance shortfall, according to a copy of the notice obtained by Reuters.
Northrop had carried out about $1.2 billion of work under its contract for the kinetic energy interceptor, or KEI, which was designed to shoot down missiles soon after their launch.
Termination fees, if there are any, are the product of negotiations between the government and a contractor when a deal is canceled for the government's convenience.
Northrop Grumman and the Missile Defense Agency had no immediate statements on the formal termination.
Defense Secretary Robert Gates had announced plans to cancel the KEI as part of a restructuring of U.S. missile-defense efforts under the proposed fiscal 2010 budget.
Gates and the Missile Defense Agency said the system had limited capability, would have been difficult to fire from ships because of its large size, cost too much and would have to be launched from close to the target.
After a stop work order was issued last month, Northrop Grumman had called on the Pentagon to go ahead with a 'booster flight test' to help it reap knowledge that could be put to use on other systems.
Northrop argued it had completed 90 percent of everything needed to do the test when the Pentagon stopped work on May 11.
(Reporting by Jim Wolf; editing by Matthew Lewis) Keywords: MISSILE NORTHROP/ (jim.wolf@thomsonreuters.com; +1 202-898-8402; Reuters Messaging: jim.wolf.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
WASHINGTON, June 11 (Reuters) - The Pentagon's Missile Defense Agency has formally ended Northrop Grumman Corp's Kinetic Energy Interceptor program, once valued at $6.3 billion, despite the company's push to carry out what would have been a key test in September of the missile-defense technology.
Northrop was notified on Wednesday of the termination, which was 'for the convenience of the government,' not because of any company performance shortfall, according to a copy of the notice obtained by Reuters.
Northrop had carried out about $1.2 billion of work under its contract for the kinetic energy interceptor, or KEI, which was designed to shoot down missiles soon after their launch.
Termination fees, if there are any, are the product of negotiations between the government and a contractor when a deal is canceled for the government's convenience.
Northrop Grumman and the Missile Defense Agency had no immediate statements on the formal termination.
Defense Secretary Robert Gates had announced plans to cancel the KEI as part of a restructuring of U.S. missile-defense efforts under the proposed fiscal 2010 budget.
Gates and the Missile Defense Agency said the system had limited capability, would have been difficult to fire from ships because of its large size, cost too much and would have to be launched from close to the target.
After a stop work order was issued last month, Northrop Grumman had called on the Pentagon to go ahead with a 'booster flight test' to help it reap knowledge that could be put to use on other systems.
Northrop argued it had completed 90 percent of everything needed to do the test when the Pentagon stopped work on May 11.
(Reporting by Jim Wolf; editing by Matthew Lewis) Keywords: MISSILE NORTHROP/ (jim.wolf@thomsonreuters.com; +1 202-898-8402; Reuters Messaging: jim.wolf.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.