Raytheon docked bonus for problems with missile

WASHINGTON (Bloomberg) — Raytheon Co., based in Lexington, Mass., lost about
$1.4 million of a potential $4.38 million bonus because of performance problems
with the missile that’s the core of an antimissile program for the U.S. Navy,
according to Navy figures. The lower bonus was the result of problems during ground
testing of a miniaturized propulsion system used to aim the warhead and the first
intercept test of a new three-stage booster rocket. The next intercept test is
scheduled for January. The problems were setbacks to a high-profile system that
many defense analysts, including advisers to Republican presidential candidate
George W. Bush, say has greater potential to protect the country than the new
ground–based national missile defense system. Proponents say a sea-based system
also has the advantage of not breaking the 1972 ABM Treaty. Raytheon’s missile
systems unit received $2.98 million in bonuses, or 68 percent of the so-called
award fees available in the six-month grading period that ended Aug. 30. That’s
the lowest percentage since contract to develop for the Standard Missile-3 began
in January 1998.