Army takes $35 million hit on joint common missile.

As a result of funding cuts, the Army is unable to bring a second industry competitor into one of its largest missile programs.

The Army selected a single contractor to build the multi-service "joint common missile," but wanted to engage two suppliers to compete in the development of the seeker--a complex tri-mode system that will combine laser, radar and infrared guidance into a single device.

Lockheed Martin Missiles and Fire Control won a $53 million contract in May to begin developing the joint common missile. One of the two losing competitors, Raytheon and Boeing, potentially could have been selected as a back-up contractor just for the seeker work. That will not be possible, at least in the foreseeable future, because the Army has no funds to support a second contractor, said Brig. Gen. Mike Cannon, Army program executive officer for tactical missiles.

In the fiscal year 2005 spending bill for the Defense Department, Congress cut the $35 million the Army had sought for a back-up contractor, Cannon said at a recent industry conference of the Institute for Defense and Government Advancement.

Cannon said the Army plans to request the money again in the 2006 budget. He believes the joint common missile program would benefit from having a second contractor. "We are going to try to get the funds back," he said. "We think having two manufacturers will keep the prices down." The seeker is the most expensive piece of the missile, he noted. Each JCM is estimated to cost between $100,000 and $150,000.

Lockheed officials said they expect the program to be worth more than $5 billion over 20 years.

The missile is called joint, because it will be launched from Army helicopters, Navy fighters and possibly Air Force unmanned aircraft. It is intended to replace the Hellfire and Maverick missiles.