Boeing (BA) lost a contract with the Pentagon on Tuesday to develop a new interceptor to protect the United States from threats from intercontinental ballistic missiles. But Boeing’s shares soared on Wednesday.
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Instead of, Lockheed Martin (LMT) and Northrop Grumman (NOC) won the Next Generation Interceptor contract for technology development and risk reduction.
Lockheed’s contract is worth $ 3.7 billion through August 2025, and Northrop’s contract is worth $ 3.9 billion through May 2026. The two defense giants will later compete for a future acquisition contract.
“By planning to take two suppliers through technology development, the MDA will maximize the benefits of competition to deliver the most effective and reliable self-defense missile to the warrior as quickly as possible,” Vice Admiral Jon Hill, director of the Defense Agency Missiles, said in a statement. “Once in the field, this new national defense interceptor will be able to defeat the threat advances expected in the 2030s and beyond.”
Lockheed also worked with Aerojet Rocketdyne (AJRD), which Lockheed is buying. Northrop Grumman has partnered with Raytheon Technologies (RTX).
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Boeing Stock
The shares rose 2.3% to 246.70 in the stock market today. Boeing shares are again above a buying point of 244.18, according to an analysis of the MarketSmith chart. Lockheed’s shares rose 2.2% and Northrop added 2.2%.
The Next Generation Interceptor will replace the interceptors of the current Ground-Based Midcourse Defense system, which is located in Fort Greely, Alaska and Vandenberg Air Force Base, California.
Boeing is the main contractor for this system and won a $ 6.6 billion contract in 2018 to replace it. But the Pentagon canceled the Redesigned Kill Vehicle program last year for technological reasons.
“Boeing is disappointed that the United States Missile Defense Agency did not advance our team to the next phase of the competition in the development of the Next Generation Interceptor competition,” the company said in a statement.
“Our proposal to upgrade the current ground-based Midcourse defense system took advantage of the company’s more than 60 years of experience with missile and weapon systems to provide an NGI solution that emphasized an innovative design with enhanced flexibility and modularity.”
Follow Gillian Rich on Twitter for aviation news and more.
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