Pentagon reports rising costs for GPS terminals, ground control system

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Growing costs reported for GPS user equipment increment 1 and for the OCX ground control system.

WASHINGTON — The Pentagon informed Congress in new report that the cost of military GPS 3 terminals and ground systems has increased considerably.

The details are found in the Defense Department’s latest Selected Acquisition Reports, known as SAR, released on Tuesday.

The report mandated by Congress looks at acquisition programs’ cost, schedule, and performance changes. The new SAR was updated with fresh data from the president’s latest budget submission and measures changes since December 2016.

The cost of the program known as military GPS user equipment increment 1 (MGUE Inc 1) increased $265.1 million, or 22.7 percent — from $1.1 billion to $1.4 billion.

The price tag for the next-generation operational control system, or OCX, for the GPS 3 constellation soared by $665.3 million, or 12.3 percent — from $5.4 billion to $6 billion. Most of the increase, $212.3 million, was for additional cybersecurity upgrades.

The program cost estimates provided in the SAR include research and development, procurement, military construction and acquisition-related operations and maintenance. These totals reflect actual costs to date as well as future anticipated costs. All estimates are shown in fully inflated then-year dollars.

The GPS 3 is a critical program that has drawn increased focus from the Air Force. The first batch of 10 satellites is being produced by Lockheed Martin Corp. GPS 3 increases signal strength and resistance to jamming, and provides new military and civilian signals known as M-Code and L1C, along with the three existing civilian signals. L1C will be compatible with the European Galileo constellation.

The satellites have experienced some schedule delays due to subcontractor problems. But the majority of the troubles have been in the ground control and user segments of the program. Government auditors have warned that the GPS 3 program increasingly is becoming harder to manage because of the complexity and scope of the upgrades required to military weapon systems to receive the encrypted signals. The satellites might be up and running by 2021 but it could take many more years to get the ground infrastructure and equipment terminals in sync with the new satellites.

The Pentagon’s director of weapons testing and evaluation warned that the “continued lack of an enterprise strategy and integrated approach to program execution places the nation’s GPS capability at significant risk.”

The biggest headache in the GPS 3 program has been the OCX system, developed by Raytheon, which is years behind schedule. This means that initial GPS 3 satellites in orbit will have to use older signals until OCX is ready.

The cost increases in the SAR are not a surprise. The report reflects revised estimates that the Air Force and the Pentagon have approved. The rising prices for the GPS 3 receivers, however, could delay future buys as each branch of the military has to fund its own user terminals. The receivers are made by Rockwell Collins, Raytheon and L3.

Another space program highlighted in the new SAR is the Evolved Expendable Launch Vehicle , but in this case the cost has come down. The EELV  total program cost is down $2 billion, or 3.4 percent, from $59.2 billion to $57.2 billion. The reduction comes from the elimination of eight launch services, from 168 to 160, based on decreased satellite vehicle requirements. The reduced costs were partially offset by an increase in research-and-development spending of $190 million in the fiscal year 2019 president’s budget for launch systems investment, and a change in satellite vehicle requirements and configuration updates that added $477 million in costs.