Terminate the Medium Extended Air Defense System Program

The Medium Extended Air Defense System (MEADS) is an air and missile defense system under joint development by the United States, Germany, and Italy. It is intended to provide low-and medium-altitude defense against attack by short-range ballistic missiles, cruise missiles, unmanned aerial vehicles, and other airborne weapons. The program includes two types of radar, as well as command-and-control systems, missile launchers, and an interceptor missile. MEADS is slated to replace and improve on the capabilities of the Patriot system, which is approaching the end of scheduled production of its interceptor missiles. As a result of delays in the development of the MEADS interceptor, production of the Patriot Advanced Capability-3 (PAC-3) interceptor was extended into 2011, two years beyond its planned end date.

This option would terminate MEADS development. In place of the new system, the option would continue production of Patriot interceptors and initiate an engineering effort to maintain and improve the Patriot system. To estimate the savings from canceling MEADS, the Congressional Budget Office has relied on plans described in the December 2009 Selected Acquisition Report for MEADS, which calls for procurement of about 1,000 interceptors and 16 complete fire units over the next 10 years. CBO estimates that canceling MEADS would save about $4 billion in outlays over the next five years and $13 billion over a decade. The 10-year savings would come from discontinuing research and development for the MEADS system (about $3 billion) and ending the procurement of MEADS equipment (almost $11 billion). In this option, the 5- and 10-year savings would be partially offset by continuing to improve and procure Patriot systems, including ground equipment; CBO has assumed that nearly $400 million per year would be spent on that effort, sufficient to procure 40 interceptors per year and provide $100 million per year for engineering support and upgrades. CBO estimates that the net savings for this option would be about $3 billion over the next five years and nearly $10 billion over a decade. In a February 2011 fact sheet, the Department of Defense (DoD) indicated that it may end participation in MEADS development after 2013 and not procure any operational MEADS systems; under those circumstances, CBO's estimates of savings would change. CBO's estimates do not include any costs associated with canceling the contract.

An argument in favor of this option is that the program has experienced technical difficulties, and development of the MEADS interceptor has exceeded DoD's thresholds for both cost growth and schedule delay. In addition, some critics of the program argue that MEADS may not provide effective protection. Defense Daily, for example, on August 27, 2010, cited an internal Army memo that advocates "harvesting MEADS technologies and improving the Patriot program it was designed to replace," on the basis of concerns that MEADS technical requirements do not address current and emerging threats.

An argument against this option is that the capability improvements intended for MEADS may be valuable for addressing the ballistic and cruise missile threats that U.S. forces may face in the future. In its 2009 report, Ballistic and Cruise Missile Threat, DoD's National Air and Space Intelligence Center concluded that "ballistic and cruise missiles present a significant threat to U.S. and Allied forces" that "continues to increase with the proliferation of missile technology." Also, because MEADS involves international collaboration, canceling the program would require negotiations with the program partners, which might prove diplomatically sensitive.