U.S. Air Force To Close Satellite Processing Facilities at Launch Sites

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WASHINGTON — Lockheed Martin’s recently announced acquisition of Astrotech Space Operations, which specializes in the prelaunch processing of satellites, comes less than two months after the U.S. Air Force said it plans to shut down its own processing facilities by the end of 2016.

In a report given to congressional defense committees in April, the service said it “plans to shut down its organic processing capability and utilize commercial payload processing facilities.” The decision was made by Gen. William Shelton, commander of Air Force Space Command, according to the report, dubbed “Satellite Payload Processing Plan.” 

“Detailed analysis suggests that payload processing is a service inherently suited for execution by industry,” the report said. 

Processing typically includes satellite transport, testing, fueling and final adjustments in preparation for integration with the launch vehicle.

“The current payload processing architecture, owned and operated by the government, results in high costs to operate and maintain a standing infrastructure of facilities, equipment, and personnel,” the report said. “These high costs of, coupled with potential spacecraft production delays, unstable spacecraft and launch vehicle budgets, and long periods of downtime between launches is forcing the Air Force to re-assess the business of payload processing in government facilities.”

The Air Force said it hopes the planned shutdown increases demand for commercial services and promotes competition. 

The Air Force is also studying transferring some of the equipment at the government facilities — including overhead cranes, clean processing areas, propellant loading bays, diagnostic equipment and specialized air conditioning systems — to commercial users, the report said. “This may create opportunities in the commercial market while supporting long-term usage,” the report said.

Astrotech, which Lockheed Martin is buying for $61 million, is headquartered in Titusville, Florida, near Cape Canaveral Air Force Station. The company also has facilities at Vandenberg Air Force Base, California. The company has processed more than 300 satellites since 1981.

“While the Air Force’s decision was certainly a consideration, we would not characterize it as the sole deciding factor” to purchase the company, Matt Kramer, a Lockheed Martin spokesman, said in a June 6 email. “We’re acquiring Astrotech Space Operations on the strength of their performance, their capabilities and their existing business base, which we believe is a great strategic fit for Lockheed Martin’s portfolio.”

The Air Force’s Wideband Global Satcom and Advanced Extremely High Frequency satellite programs have utilized the Astrotech facilities, the Air Force report said. But some prime contractors prefer to use government facilities.

Space Exploration Technologies Corp. also has a spacecraft processing facility at Cape Canaveral Air Force Station. Spaceport Systems International has a payload processing facility at Vandenberg.

“These industry leaders, among others, will be instrumental in improving affordability through the competitive environment while ensuring the integrity and successful execution of payload processing activities to deliver space capability to the warfighter,” the report said.

Lockheed Martin’s Astrotech acquisition is expected to close during the third quarter of 2014.

 

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