It's not every day you hear about the Department of Defense cutting spending on its own initiative, so Tuesday was a pretty unusual day in Pentagon circles. The government announced it will not be proceeding with further "development to operations" of a planned Hypersonic Payload Delivery Vehicle. The so-called "descoping of requirements" means that Lockheed Martin's (NYSE:LMT) Space Systems unit will be giving the U.S. Air Force a $7.8 million credit for funds already paid. It will also reduce the total cumulative value of Lockheed's HPDV contract to $57.3 million.
The HPDV was intended to be the first part of a two-part superfast missile delivery system. The first part, now terminated, was the reusable "Falcon" delivery vehicle, designed to reach targets anywhere on the globe in one hour or less. The second part -- presumably also unlikely to be developed now -- would have been a suborbital "glider" bomb that would drop from the Falcon and strike its target, still moving at hypersonic speeds.
Work on this contract was completed on April 30, 2013.
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