The Army has formally canceled the Non-Line of Sight-Launch System, a billion-dollar missile program under development by Tucson-based Raytheon Missile Systems and Lockheed Martin.
The Navy is still evaluating its options for the system, which it had been considering for use aboard a new line of coastal combat vessels.
The modular system, known as NLOS-LS or simply NLOS, features 15 all-weather missiles in a common launcher that can be mounted on an array of military vehicles. The NLOS-LS was part of the Army's Future Combat Systems program, which was canceled last year.
Raytheon makes the NLOS-LS's Precision Attack Missile (PAM) and Lockheed Martin makes the launch unit, under a joint venture called Netfires LLC.
"It's disappointing that the U.S. Army has decided to cancel the NLOS-LS program," Raytheon said in a prepared statement to the Star. "After a more than $1 billion investment over ten years, the program stands at 92 percent complete."
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The cancellation comes after recent test failures and an examination of the program by a Pentagon review board, which recommended cancellation last month.
The missile failed in four of six flights in a critical Army "limited user test" at White Sands Missile Range in New Mexico in late January and early February. The missile had succeeded in 12 of 17 prior tests, and Raytheon says the recent problems have been fixed.
But cost was also a strike against the NLOS-LS. At production levels, the PAM missiles were expected to cost $300,000 each, though Raytheon said that cost could be cut to less than $200,000.
"A detailed analysis of alternatives determined that the Non-Line-of-Sight Launch System (NLOS-LS) does not provide a cost-effective precision fire capability," the Army said in a news release.
"The Army intends to pursue other capabilities to engage a moving target in all-weather conditions in order to fulfill the operational requirement defined for the NLOS-LS."
The Pentagon has spent more than $1 billion on the NLOS-LS development program. A planned long-term production contract including nearly 10,000 missiles could have been worth more than $2 billion.
There is still a possibility that the Navy will pick up the NLOS-LS program.
The Navy has been studying the NLOS-LS for possible use on its new Littoral Combat Ship, which needs a precision-guided weapon for its coastal defense mission.
But the Navy remained noncommittal Friday.
In an e-mail response to the Star's queries, Navy spokesman Cmdr. Victor Chen said the Navy is "assessing a number of alternatives" for the NLOS-LS.
"Some alternatives under consideration include proceeding with NLOS without Army participation, utilizing a combination of existing capabilities with surface to surface capability, other medium range surface to surface missile systems and increased airborne armaments."
The Navy plans to complete an evaluation of its options by late summer, Chen said.
A defense analyst said he doubts the Navy will pick up the NLOS-LS.
"It's quite an expensive system for what it is," said Jan van Tol, a retired Navy captain and senior fellow with the Center for Strategic and Budgetary Assessments, a Washington, D.C., public-policy think tank.
"The Army is the primary sponsor - they made the investment - I see no reason why the Navy would pick that up," he said.
The Navy is one of Raytheon Missile Systems' biggest customers. Among its Navy programs, the company makes the Tomahawk cruise missile, the Standard Missile series of ship-defense missiles and the Evolved SeaSparrow Missile, another ship-defense system.
Contact Assistant Business Editor David Wichner at dwichner@azstarnet.com or 573-4181.