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Pentagon Cancels Boeing Contract

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The Pentagon has canceled a billion dollar contract with Boeing Co. for a new ballistic missile interceptor due to technical design problems.

The contract was for developing the Redesigned Kill Vehicle or RKV, intended to intercept and shoot down current and future-generation incoming ballistic missiles from North Korea and Iran at extremely high altitudes.

The technology program was meant to improve on the current Exo-Atmoshpheric Kill Vehicle or EKV. The two ground-based interceptors or GBIs, along with new radars and sensors, were intended to protect the U.S. mainland against long-range ballistic missile attacks.

The Pentagon currently has 44 GBIs, based mostly in Alaska. An additional 20 interceptors were to be equipped with the RKV under the Boeing contract.

However, the contract has been riddled with problems as Raytheon Co., the maker of the interceptor's warhead, continued to struggle with design and manufacturing issues that led to cost escalations.

In May this year, the Pentagon had issued a stop-work order on the project due to technical design problems that were significant to be either insurmountable or cost-prohibitive to correct.

"Ending the program was the responsible thing to do… Development programs sometimes encounter problems. After exercising due diligence, we decided the path we're going down wouldn't be fruitful, so we're not going down that path anymore," Dr. Michael Griffin, Under Secretary of Defense for Research and Engineering said in a statement.

The Pentagon said it will initiate competition for a "new, next-generation interceptor".

Boeing and Raytheon said they accept and support the decision to terminate work on the current project and initiate a competition for a new system.

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