WASHINGTON and LONDON — As operations in Iraq and Syria continue to drive demand for the Hellfire missile, Lockheed Martin has secured an Army contract to develop its successor — one which offers the company hope of blocking competitors Raytheon and MBDA from having even a toehold in the air-to-ground missile munitions market.
The $66.3 million contract for the Joint Air-to-Ground Missile (JAGM) gives Lockheed the right to replace its popular Hellfire missile, as well as the Raytheon-made air-launched TOW anti-tank missiles, on rotary wing and unmanned aircraft for the US Army, Navy and Marine Corps. The Pentagon made the announcement on July 31.
Under the contract, Lockheed is developing a dual-mode seeker, housed in an AGM-114R Hellfire "Romeo" body, that combines a semi-active laser and "fire-and-forget" millimeter wave radar. The combination improves accuracy against moving targets, like trucks and tanks, and in poor weather.
Though Lockheed was the lone bidder, the Europe-based consortium MBDA had voiced hopes of breaking into the US market with a similar capability, the Brimstone 2, which also uses a dual-mode seeker. Raytheon participated in an early stage of the Army program but opted out.
"This was a way for Lockheed Martin to keep its hand on the Hellfire business," said senior analyst Steve Zaroga, of the Teal Group. "There is an element of Lockheed Martin versus Raytheon, but another element is the European attempt, MBDA, trying to sell their weapon into the US market."
As the US and its allies conduct airstrikes and bombing raids against the Islamic State group, Hellfire missiles are in high demand. The US Air Force budgeted more than $700 million for 3,756 Hellfire missiles for 2016, and the Pentagon has in recent months sought approval for Hellfire sales to Lebanon, Saudi Arabia, Israel, Egypt, Pakistan and South Korea that amount to thousands of missiles worth hundreds of millions of dollars.
"I can tell you absolutely yes, the demand for Hellfire has increased, and we are managing the Army inventory very closely, so we are balancing [production] against the demand to deliver quickly to many other countries and our US forces overseas," said Army Lt. Col. Phil Rottenborn, product manager for JAGM Col. James Romero, project manager, joint attack munitions systems.
With JAGM scheduled to reach initial operational capability in 2018, Hellfire will likely remain in demand even afterward, as the Army ramps up production of the new missile, Rottenborn Romero said. In June, the Army announced that it asked Lockheed to boost production of the Hellfire from 500 rounds per month to 650 by November 2016.
The JAGM development contract covers 185 missiles, and includes two $60 million low-rate initial production options for up to 2,600 missiles. Army officials said the plan is to eventually replace Hellfire missiles as they expire with JAGM, at a cost of about 10 to 20 percent above the cost of a Hellfire, which typically costs $80,000 to $130,000 each, depending on quantity.
JAGM would first be placed on the Army's AH-64 Apache and Marine Corps' AH-1Z Viper helicopters, and talks are ongoing to install it on the Army's MQ-1C Gray Eagle drone UAV, and on Air Force platforms. It is compatible with all Hellfire II firing platforms, a list that includes the MQ-9 Reaper and MQ-1 Predator drones.
"We know there is a lot of interest not just from the 'big blue' Air Force, but the special operations community as well, and we think it would be a great fit," Rottenborn Romero said. "We are certainly involved in doing this with the Air Force, and we want to make sure they have all the information they need to make a decision whether or not they want JAGM integrated or hosted on qualified platforms."
The latest contract award punctuates a history of fits and starts in this area for the Army. JAGM is the successor to the defunct Joint Common Missile program, which had been envisioned as a new missile that each of the services would buy — before it was canceled in 2006 over cost concerns.
At the time, the concept included a more sophisticated propulsion system and a tri-mode seeker. A tri-mode seeker would include a semi-active laser, millimeter wave radar and infrared guidance, similar to that found on the FGM-148 Javelin anti-tank missile.
While that remains the Army's objective, the program was broken into three increments in January 2013. Today, only the first increment, for the developmental guidance system, has received funding.
Program officials said they plan to discuss with Army and Navy leaders whether to pursue a tri-mode seeker and more advanced motor, but that future competitions would focus on improvements to the missile, not an entirely new development, given the Army's investment in the testing behind the Hellfire, Rottenborn said.
"Yes, we welcome competition at every stage, but anyone who competes would have to show all the same maturity that we expect to have from our selected contractor, so the bar ends up being higher for level of maturity and expectation of ability to produce a qualified missile," Rottenborn Romero said.
"We don't exclude competition, but we are aware anyone who would compete would have to do investment on their own to catch up, if you will, with the developmental process we're undergoing in the second stage of right now."
In 2011, the Army released a solicitation to industry, but the program was defunded before the Army could make an award. The Pentagon ordered a technology demonstration with Raytheon and Lockheed. In 2012, a budget rescission forced the Army to make a decision, based on a preliminary design review, and the Army eliminated Raytheon.
Raytheon opted not to bid when the Army issued its solicitation in late May.
Another potential competitor, MBDA, "took serious consideration on the JAGM competition" but did not compete, according to Jan Gerokostopoulos, communications director for MBDA's US group.
Had Raytheon entered the competition, it was expected to offer a product based on its proposal for the Air Force's Small Diameter Bomb II (SDB II) program, which has a tri-mode seeker. The Air Force and Navy are expected to integrate the SDB II onto the F-35 joint strike fighter and the F/A-18E/F Super Hornet aircraft.
Infrared improves accuracy, but "the seeker really drives up the cost," according to Zaroga.
Raytheon has not given up hope it might one day compete for a Hellfire replacement, and offered the following statement:
"After careful consideration, Raytheon chose not to bid for the JAGM contract. If the requirements change, Raytheon stands ready to assist the US Army with its efforts to field a JAGM missile. We would plan to offer Raytheon's proven tri-mode seeker as part of the solution."
MBDA is still in the game. Gerokostopoulos said the US Air Force and Navy are still assessing the Brimstone 2, and the company responded to a request for information for the F/A-18 Growler as recently as late July.
The Navy had taken an initial look at integrating the weapon on F/A-18 Super Hornets and the USAF US Air Force tested the weapon on a Reaper, although that work was done principally for the British.
During a briefing in London on March 16, MBDA boss Antoine Bouvier expressed frustration about US market openness. based on its difficulty getting the Pentagon interested in the dual-mode Brimstone 2.
"If we are not able in the next few weeks to confirm that we have entered the US market with the Dual Mode Brimstone we will have to recognize that we have failed ... if we have failed to enter with such a perfect case there is something wrong with [market] accessibility," the MBDA CEO said.
He said he was "not overly optimistic" of receiving "some indication" from the Pentagon that would allow MBDA to pursue Brimstone opportunities. If not, US credibility regarding competition and market access would be damaged, as the weapon is being seen in the UK and elsewhere as a test case, he said.
Carried by Royal Air Force Tornado strike jets, Brimstone has been widely used in recent conflicts where its ability to hit small, maneuvering targets with high accuracy and low collateral damage has drawn widespread plaudits from the military.
Prompted by a question from a reporter, Bouvier said the Brimstone 2 being offered to the US "ticks all the boxes, it's an excellent product, there is a capability gap in the US and we have made a very attractive financial proposal," he said.
Brimstone is a pure British product, supported personally by British Prime Minister David Cameron in talks at the highest levels of the US administration, he said.
When British defense Procurement Minister Philip Dunne met with Frank Kendall, US undersecretary of defense for acquisition, technology and logistics, in Washington in late July, he said he had not given up hope of selling Brimstone to the US, and that there is "continuing interest" in reaching agreement.
For their part, Army program officials said they were open to MBDA's involvement and met with its representatives at various points in the years before the Army's solicitation. Rottenborn Romero said they gave MBDA "every opportunity to compete" and provided the company with technical assessments of the company's progress.
"At the end of the day, their decision was not to propose, and if you want more details, you have to talk directly to them," Rottenborn Romero said.
"I'm concerned about anyone who thinks they did not get a fair shot or that their solution was the solution to our requirements, and I can tell you both of those perceptions are untrue."
Rottenborn Romero said it was inaccurate to presume the Army is attempting to reinvent a capability the UK and MBDA is already fielding. While the system is derived from the Hellfire, the company had trouble reconfiguring its missile to adapt to the Hellfire's back end.
"They certainly had time if they were a serious competitor," Rottenborn Romero said. "You might ask them if they had full consensus and support to move forward on our program."
Note: An earlier version of this story attributed Romero's comments to Lt. Col. Phil Rottenborn, product manager for JAGM.
Staff Writer Aaron Mehta contributed to this report.
Andrew Chuter is the United Kingdom correspondent for Defense News.
Joe Gould was the senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry. He had previously served as Congress reporter.