PAC-3 report overestimates operating costs

An error in a report on the US Army's Raytheon Patriot Advanced Capability 3 (PAC-3) air and missile defence system overstates the sustainment cost estimates for the programme by more than USD11 billion.

Raytheon is pushing for more international sales of the system, while Lockheed Martin is pushing its competing Medium Extended Air Defense System (MEADS) development programme.

In September a National Research Council (NRC) report, citing army numbers, estimated the battalion operations and sustainment cost for Patriot at up to USD809 million.

Lockheed Martin officials and other MEADS boosters seized on the NRC report, arguing that it ought to prompt the army to retire the Patriot in favor of MEADS. The Patriot opponents multiplied the NRC figures by the army's 15 Patriot battalions, leading them to allege a total annual operating cost for Patriot of more than USD12 billion per year.

However, the NRC's estimate actually reflects the cost of operating and sustaining all 15 battalions over 20 years.

The Lexington Institute's Loren Thompson, who publicised the erroneous information, on 27 November corrected the earlier figures on his blog.