Pentagon okays continued work on Lockheed missile: source

By Andrea Shalal-Esa

WASHINGTON (Reuters) - The U.S. Defense Department has approved continued work by Lockheed Martin Corp. on a $6.1 billion cruise missile program and plans to begin negotiations with the company on additional missile orders, a source familiar with the decision said on Friday.

Air Force acquisition chief Sue Payton and Chris Kubasik, executive vice president of Lockheed's Electronic Systems unit, division, will discuss the recertification of the Joint Air-to-Surface Standoff Missile program, or JASSM, on Tuesday, the Air Force said.

JASSM is a long-range, air-to-ground missile used by the U.S. Air Force and Navy to destroy well-defended targets, theoretically with a single missile per mission.

The Air Force declined further comment.

The Pentagon last year approved continued work on the program despite an anticipated overrun in its original per-unit cost of over 50 percent. At the time, it stopped short of a decision to keep the program alive indefinitely, pending various actions to be taken to restructure the program.

The program's overall costs were up 30 percent to $6.1 billion at the end of 2007 from an initial baseline estimate of $4.0 billion, according to the Pentagon's latest report to Congress, which showed that the number of missiles to be purchased had been cut by 441 to 5,006.

"We continue to work with the government to finalize plans that will enable the highly successful JASSM program to proceed," Lockheed spokesman Tom Jurkowsky told Reuters, adding that he hoped the talks would be completed in the near future.

He said the Air Force recently described the weapons system as "essential to national security," but declined to give any further comment on the recertification issue.