With the U.S. Defense Department moving ahead on several ground system support procurements, some of which will consolidate multiple existing contracts, these are heady times for ITT Exelis Information Systems, the incumbent for much of the work now in play.
Proposals are in for the Launch and Test Range System Integrated Support Contract (LISC), a roughly $200 million per year effort to consolidate operations, maintenance and sustainment work at the U.S. federal space launch ranges that currently is divided among three contracts. Exelis holds one of those — the Spacelift Range System (SLRS) contract that covers maintenance, modernization and sustainment for both the eastern and western ranges — and has formed a joint venture with BAE Systems and L-3 Communications to compete for the LISC award.
Exelis also is prime contractor for the System Engineering Sustainment and Integrator, or Sensor, effort, which maintains and operates a large portion of the U.S. Air Force’s network of optical and radar sensors for missile warning and space surveillance. The follow-on program, called Sustainment and Modernization of Optical and Radar Sensors, will divvy up that work among six indefinite-delivery, indefinite-quantity contracts with a $2 billion cost ceiling over seven years.
On the civil side, Exelis just won a contract, potentially worth $435 million over 10 years, to continue maintenance and sustainment of NASA’s Deep Space Network, which is used to communicate with deep-space probes. Exelis also holds the Space Communications Network Services contract that supports NASA’s near-Earth missions.
Pamela Drew says Exelis is not just looking to hold serve. The company sees opportunities in other ground system consolidation efforts and in the disaggregation trend, in which the Air Force is exploring moving away from large satellites to more-dispersed constellation architectures.
Drew, a defense information systems industry veteran who took the Exelis job in January, spoke recently with SpaceNews Editor Warren Ferster.
What are Exelis’ strengths in the LISC competition?
We think we have the only team which has an existing footprint at both of the ranges.
I think it’s fair to say that the Spacelift Range System is at the core of LISC because it has some of the maintenance work, the systems engineering and the sustainment work. So when you’re talking about range technologies that are 50 years old and you want to look at extending their life, having that expertise is a real discriminator. Then we have L-3 and BAE who are doing significant portions of the depot work and other maintenance activities. So with the combination of the three of us, you’re getting a lot of key experience.
Is this more consolidation than infrastructure overhaul?
It’s primarily a consolidation, but there’s also an opportunity for streamlining. There are some capabilities where we’re going to have redundancy and we’ll be looking to help the government sunset things. In the current environment we’re probably not going to see a lot of upgrades in the near term but that doesn’t mean there won’t be the opportunity in the future and assuming we win we’d be looking for ways to bring forward proposals on what should be done along those lines. But our focus right now is really looking at how to integrate, consolidate in a low-risk way and implement the transition.
Can you briefly characterize the importance of winning LISC to your company?
This is a very high priority. It’s important to us obviously from a business perspective but the broader picture for Exelis is that we are consolidating our capability around the concept of mission critical networks and this is a linchpin program in that strategy. The networks that we are supporting through the sustainment activities at the ranges represent exactly the kind of expertise that we want to maintain and propel and leverage into other mission critical networks in other parts of the Air Force and other customers.
Can you give me another example?
With NASA we’ve got the Space Communications Network Services work, so we’ve got from Earth to near Earth orbit and some lunar missions. We now also have the Jet Propulsion Laboratory’s Deep Space Network where we will support an international network of communications complexes that support interplanetary robotic spacecraft missions. So from here we’ll be looking at opportunities with the Air Force, such as the follow-on program to Sensor.
Are there opportunities to introduce efficiencies into the Deep Space Network under the new contract?
There definitely are. We have put forward some of those ideas. This is a scenario where, just as with the launch and test ranges, you have to be able to execute from day one.
The Air Force has scaled back operating hours for some of its ground-based space surveillance assets from 24 to eight hours a day. Has that affected Exelis’ Sensor contract in any way?
We do sustainment work and we do the systems engineering, so we have been affected. There is work, simply, that’s very directly tied to the sequestration, so we’re seeing the impact. It’s not huge but it’s real, and we’re working our way through how to adjust the support and our work force to be able to respond. The good news for us is that we have a number of related programs so we have the ability, to some degree, to maintain the work force and be able to work through the ebbs and flows. Obviously you can only go so far with that approach if cuts continue or if we end up in a protracted situation, but so far we’re managing our way through it.
Has sequestration affected any of your other programs, like SLRS?
SLRS has been affected by a combination of things. It is being affected in large part, we believe, due to the recompete. There’s a set of core work and then there’s some extra project work that’s more the advanced engineering work, and that work is starting to subside until the recompete is decided. So it’s a combination — a little bit of impact may be attributed to sequestration, but it’s not as clear as it is on the Sensor program.
Has any of your NASA work been affected?
Not significantly. These are truly mission-critical networks, so we believe our customer, the government, is going to do everything they can to try to preserve the mission, and take cuts where they have the flexibility. I think they may be a little bit hamstrung by this near-term sequestration hit for 2013. In 2014, they’ll have more flexibility, I think, to make some choices and hopefully we’ll see restoration on programs such as Sensor to bring back the mission to its fullest extent.
We’ve talked mostly about work that you already have. What are the growth opportunities?
There are a few areas where we would be looking to pursue new business that are systems engineering- and sensor-related for critical networks. One of them is the Consolidated Air Force Satellite Network Modernization, Maintenance and Operations Contract, which would consolidate four existing contracts. That’s a domain that we’re going to be very interested in.
How well positioned are you to grow in the current environment?
Exelis is in a very interesting and potentially discriminating position because between our Geospatial Systems and Information Systems sectors we’ve got the eye-watering technology to build the sensors and the payloads, and then we’ve got the network expertise, including ground systems. I think it presents a very interesting opportunity because as the government continues to think about efficiencies and potential concepts like disaggregation, we have the piece parts that connect the real mission together.
Can you be more specific about how disaggregation represents an opportunity for Exelis?
If you think about the components that create the end-to-end mission capability, they include the sensor and the transport mechanism that gets the data to the decision maker, which is the network. We are developing, deploying, operating, maintaining and sustaining all of those things. There’s work to be done in terms of understanding how you reaggregate information because typically you need information from different sensors to be able to support decision making. A strategic growth initiative at Exelis is focusing on how you recombine information in a way that makes it useful to support the decision maker.
Does disaggregation have staying power or is it a passing fancy?
I think the government’s going to have to make some decisions about how they execute the mission. The change is happening. It may not be immediate but it will happen. It may not be exactly as disaggregation is described today, but some of these concepts have been around for a few years and the government does recognize that they need to be more efficient and figure out how to carry out the mission with fewer resources and have more flexibility.
