$2B Plus Cost Rise Doomed MEADS

The tri-national MEADS missile defense program was not doomed by by a US Army eager to save money but by a cost overun of close to $2 billion. MEADS development was supposed to cost roughly $4 billion, so this would have more than qualified for a Nunn-McCurdy breach and required OSD to certify the requirement was still valid and to reform the program. Because of its status as an international program, however, it was not subject to the Nunn-McCurdy provisions.

The tri-national MEADS missile defense program was not doomed by by a US Army eager to save money but by a cost overun of close to $2 billion. MEADS development was supposed to cost roughly $4 billion, so this would have more than qualified for a Nunn-McCurdy breach and required OSD to certify the requirement was still valid and to reform the program. Because of its status as an international program, however, it was not subject to the Nunn-McCurdy provisions.

On top of that, a congressional source familiar with the program said there would have been “several hundred million” in additional costs to — incredible as it may seem for a program under development for more than a decade — make MEADS interoperable with Army command and control systems. And testing costs — probably worth more than $100 million — had not yet been budgeted for.

Given that the United States already fields the Patriot anti-missile system [pictured], and works closely with Israel on several others such as David’s Sling, the Army and OSD clearly calculated that the US would not be losing a crucial capability. However, MEADS was supposed to provide 360 degree coverage and defend a much larger area  than Patriot. MEADS supporters also argued that the system’s life cycle costs would be much lower than existing capabilities. Those arguments now appear moot.

To avoid incurring what could be huge program termination costs (up to $1 billion) the Pentagon plans to fund MEADS in the next budget. It’s an investment of

To get expert perspective on MEADS’ demise, we contacted Frank Cevasco, one of the top international defense consultants and someone who has closely followed MEADS for more than a decade. While a senior Pentagon official he and colleagues at OSD pushed the Army to create a program office to manage a future extended air defense program, which eventually became MEADS. He said he does not represent any of the companies  involved in the program.

Cevasco said at least part of the cost overrun can be attributed to a plan to replace Patriot with MEADS on a one-for-one basis.  “I was told that doesn’t make sense as a MEADS fire unit has substantially greater geographic coverage than Patriot.  I agree there would be additional costs associated with integrating MEADS with a separate Army command and control system, a requirement that was levied on the program unilaterally by Army about two years ago.  Moreover, a portion of the cost overruns and schedule slippages can be attributed to the Army and DoD technology disclosure community who refused to allow the MEADS industry team to share key technology.  The matter was resolved but only after intervention by senior OSD officials and the passage of considerable time; and, time is money with major weapons system development programs,” he said in an email.

Bottom line for Cevasco: “Army has done its best from the every beginning to sabotage the program, preferring to develop a US-only solution funded by the US (with funds provided by the good fairy).”

What effect is the departure of the United States likely to have on MEADS. Here is the calculus of funding: the U.S. picks up 58 percent of the tab; Germany 25 percent and Italy 17 percent.

Given that MEADS was, once upon a time, the Pentagon’s top international program, the experience of the US with this program might be relevant to the current top international defense program, the Joint Strike Fighter. Interoperability is key to both and both have substantial portions built in allied countries. Cevasco has long experience with JSF as well, especially working with our allies.

He views the two programs “as very different.” The Air Force, in contrast to the Army, wants JSF and persuaded several other countries they should also want it.  “USAF is in full control of the JSF program whereas Army shared management and decision making with Germany and Italy. USAF understands that by demanding full control of the JSF program it could secure only modest funding contributions from its partners—but the USAF believed JSF was sufficiently important to US national security interests that domestic funding would be forthcoming.  And USAF/DoD advised its foreign partners from the beginning that some technology would be provided as ‘black boxes’ with anti-tamper protection,” Cevasco said. While some of the structural issues are clearly different, it does seem that MEADS may offer lessons for JSF, lessons on what not to do.