The Arrow weapon system is a ground-based, ballistic missile defense system designed to destroy incoming targets with a fragmentation warhead. Boeing and Israel Aircraft Industries (IAI) co-produce the Arrow interceptor, a component of the Arrow weapon system. Capabilities & Functionality Uses a two-stage interceptor, called the Arrow II, to destroy incoming targets with a fragmentation warhead Includes a launch control center, a fire-control radar and a battle management center Delivery Schedule In February 2003, Boeing and IAI signed a pre-production contract, valued at over $25 million for FY03 and FY04, to establish production facilities and to validate processes and equipment to prepare for production. In March 2004, IAI awarded a $78 million production contract to Boeing; the total contract value could exceed $225 million. Delivery to IAI of the first Boeing-built interceptor components in May 2004 supports IAI interceptor deliveries to the Israeli Ministry of Defense.