BOEING AWARDED $1.6 BILLION MISSILE CONTRACT.

Byline: Deborah Adamson Daily News Staff Writer

Boeing Co. beat a so-called dream team of defense contractors Thursday to walk away with a three-year, $1.6 billion contract to develop a missile defense system to protect the continental United States against missile attacks.

The Seattle-based aerospace and defense company's win will result in about 250 new jobs mainly at its Downey and Anaheim facilities but also at sites in Canoga Park and Seal Beach. Among the main subcontractors that will benefit from the windfall is XonTech of Van Nuys, a developer of advanced sensor systems.

Nationally, Boeing expects to add as many as 1,300 new jobs by next year thanks to the contract.

Boeing beat out United Missile Defense Co. - composed of Raytheon Co., TRW and Lockheed - to design, develop, test and integrate all elements of a national missile defense system, or NMD, against a limited ballistic missile attack.

``It was an ensemble of skills and experience that came together,'' said John Peller, vice president and program manager for the Boeing NMD team, alluding to skills acquired through recent mergers with Rockwell International and McDonnell Douglas Corp. ``This is truly the new Boeing.''

Boeing shares rose -1/8 to 50 3/16. Word of the contract award came after the markets closed.

The contract could grow to a total value of $5.2 billion in an additional seven years if it reaches full deployment.

``It's going to add a nice piece of incremental revenue to the company,'' said Peter Jacobs, an analyst at Ragen MacKenzie in Seattle. ``Long term, it could set Boeing up for substantial future business.''

Tipping Boeing's hand is its experience developing some of the largest systems integration programs in the world, including the space shuttle, the airborne warning and control system, or AWACS, and the 777 commercial aircraft.

Under the contract, Boeing will develop and integrate elements that include a ground-based interceptor, ground-based radar and computer programs to tie it all together.

The system will be designed to eliminate ``limited attacks'' of about four to five warheads, including nuclear weapons, Peller said.

Since the end of the Cold War, the nuclear threat isn't so much a massive missile strike from the former Soviet Union but smaller ``blackmail'' threats from smaller nations.

``Any country with the capability of putting a rocket into space can put a warhead on that rocket,'' Peller said.

Under the system to be developed, U.S. missiles will intercept hostile missiles and destroy them in space.

The Pentagon will decide at the end of 2000 whether to deploy the system or continue development, Boeing officials said.