Did the Pentagon Just Fumble the Nuclear Football?

Did Raytheon (NYSE: RTN) just hand the government an excuse to shave $9.9 billion off the budget? With the ink hardly dry on President Obama's 2011 budget request, the question seems inconveniently timed -- but don't blame me for the timing. This one's the Pentagon's fault, through and through.

You see, just hours before we saw the details on planned government defense spending, the Pentagon had the bright idea of running a missile defense test. Previous tests had gone so well, one presumes, that the generals wanted to generate a banner headline in support of the administration's request to allocate $9.9 billion to funding U.S. missile defenses.

Wish -- granted
Well, they got the headline, all right. Just not the one they wanted.

Sunday's $150 million test firing of a (dud) ballistic missile from the Marshall Islands, to be intercepted by a ground-based missile launched from Vandenberg Air Force Base in California, went perfectly -- all the way up to the point when the interceptor missed the missile.

Pundits so far are laying the blame on Raytheon, which built the radar that (failed to) track the target, and exonerating other team members Boeing (NYSE: BA) and Harris (NYSE: HRS). But whoever's to blame, this goose egg presents the Obama administration with a golden opportunity to slice even more billions off of its sure-to-be-criticized-as-excessive 2011 budget request.

Worse still, the administration has shown itself to be amenable to cuts of this nature. Last year, Defense Secretary Robert Gates spearheaded an effort to terminate, in quick succession:

• The Raytheon / Orbital Sciences (NYSE: ORB) / Northrop Grumman (NYSE: NOC) effort to build a kinetic energy interceptor;
• Lockheed Martin's (NYSE: LMT) Multiple Kill Vehicle (an ABM project targeting MIRVs);
• And Boeing's flying laser project.

Foolish takeaway
I don't know about you, but I'm starting to see a pattern here. Up until now, the defense companies' successful string of anti-missile test results has given them partial cover from the Pentagon budget wars. Sunday's snafu just blew away that cover like the leaves of winter.

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