UPDATE 2-Poland short-lists Raytheon, Thales in missile system tender

Mon Jun 30, 2014 2:39pm EDT

* Bids from Lockheed Martin and Israel are dropped

* Tender was revised after Russia intervened in Ukraine

* Poland choosing operational systems over advanced technology (Recasts, updates with statement from losing consortium)

By Marcin Goettig

WARSAW, June 30 (Reuters) - Poland has short-listed a consortium of France's Thales and European group MBDA, as well as U.S. firm Raytheon, in its tender for a mid-range missile defence system, the defence ministry said on Monday.

The bids that lost out on the tender, which is estimated to be worth about $5 billion, were from the Israeli government and the MEADS consortium led by Lockheed Martin.

Poland, a NATO member since 1999, had accelerated the process to select a supplier for the missile system after Russia's intervention in Ukraine prompted fears among NATO members in eastern Europe they could be next in line.

The Polish defence ministry also changed the criteria for the system, saying it should be already operational and in use by a NATO member state's armed forces.

That ruled out the Lockheed Martin-led bid, which involved technology still in development, and the Israeli bid, called David's Sling, which is also not yet in operation.

The ministry said terms of the tender will ensure the participation of Poland's domestic defence industry in the construction of the missile defence, with the state defence holding Polska Grupa Zbrojeniowa playing a key role.

Raytheon welcomed the announcement.

"We are moving ahead to provide Poland with the most advanced air and missile defense system in use today by 12 countries around the world," said Dan Crowley, President, Raytheon Integrated Defense Systems.

"And (we) look forward to partnering with the Polish industry to build the next generation Patriot system."

The first phase of the Polish system, know in Poland as Wisla, is for eight sets of mid-range interceptor rockets, which may later be supplemented by short-range ones.

Poland has already passed legislation to secure funding for the system, the ministry said earlier this year.

MEADS International issued a statement saying it was disappointed with Poland's announcement, but that it would keep working with existing national partners Germany and Italy to finish development of the system.

"Today's announcement reflects new criteria for the Wisla selection, and should they change again, we stand ready with the most advanced air and missile defence system available today."

The planned system is separate from elements of a U.S. missile shield to be deployed in Poland by 2018, as confirmed by U.S. Vice President Joe Biden on a visit to Warsaw this week.

($1 = 3.0482 Polish Zlotys) (Additional reporting by Andrea Shalal-Esa in Washington; Editing by David Evans)