By Mike Stone

(Reuters) -Lockheed Martin has received a $17 billion contract to develop the subsequent era of interceptors to defend the US in opposition to an intercontinental ballistic missile assault, the U.S. Missile Protection Company mentioned on Monday.

The interceptor program is aimed toward defeating present ballistic missile threats and future technological advances from international locations reminiscent of North Korea and Iran.

The win represents a shot within the arm for Lockheed after the US mentioned it needed to cut back F-35 orders, and the Military in February deserted improvement of a Future Assault Reconnaissance Plane, a next-generation helicopter for which Lockheed had submitted a design.

The multi-year missile contract covers the event of the Subsequent Era Interceptor (NGI) to modernize the Floor-Primarily based Midcourse Protection (GMD) program. The community of radars, interceptors and different gear is designed to guard the US from intercontinental ballistic missiles.

Lockheed shares closed up 0.60% at $462.08 on Monday.

Lockheed is “dedicated to delivering dependable interceptors,” mentioned Sarah Hiza, basic supervisor of Strategic and Missile Protection.

The primary interceptor is anticipated to be operational in 2028.

The NGI is at the moment within the expertise improvement part and can transition to product improvement in Might, in line with written testimony final week from the pinnacle of the Missile Protection Company, Lieutenant Normal Heath Collins. America plans to purchase 20 interceptors and deploy them at Fort Greely, Alaska.

Collins had mentioned the company would choose both Lockheed or Northrop Grumman (NYSE:) for this system. The businesses had been awarded separate contracts in 2021 to develop designs.

In 2019, the Pentagon scrapped work on a Boeing (NYSE:) Co contract for a “kill automobile,” the tip of an interceptor that detaches in house and destroys the incoming warhead, on account of technical design issues after spending $1.2 billion on the mission.

America then determined to restart the contract course of to collect bids for the entire interceptor. Boeing was knocked out of the competitors in 2021.

The following-generation interceptor program might be value about $17.7 billion over its lifetime, in line with authorities estimates.

The Biden administration has requested $28.4 billion for missile defenses in its fiscal 2025 funds, Collins testified.

Work on GMD started within the late Nineties and after about $40 billion in analysis and improvement prices, it was declared operational in 2004.

Simply over half of the system’s interception assessments have been profitable, nonetheless, and the Pentagon’s Workplace of the Director, Operational Take a look at and Analysis, mentioned in 2023 that GMD might defend in opposition to “a small variety of ballistic missile threats.”

In January, Lockheed forecast its 2024 revenue under Wall Road expectations, because the protection contractor’s largest aeronautics phase – which makes the F-35 jets – faces supply-chain snags.

Reuters has reported that Lockheed would lower 1% of its jobs over the course of 2024 in a bid to chop prices and streamline operations.

U.S. protection giants have benefited from strong demand for weapons amid heightened geopolitical tensions over the past two years. Gross sales of U.S. army gear to overseas governments in 2023 rose 16% to a report $238 billion.