WASHINGTON — As expected, the U.S. Air Force awarded of Denver a contract modification worth $246 million for production of the seventh and eighth satellites in the next-generation GPS 3 positioning, navigation and timing constellation, the Pentagon announced March 31.
Work on the seventh and eighth GPS 3 satellites is expected to be completed in April 2018 and October 2018, respectively, the announcement said. In February, the Defense Department announced it was awarding Lockheed Martin $14 million to order long-lead components for the spacecraft.
In an interview with SpaceNews in March, Mark Valerio, vice president of Lockheed Martin’s military space business, said the contracts were negotiated using a structure known as cost-plus, incentive fee, in which most of the program risk is assumed by the government. Beginning with the ninth satellite, Lockheed Martin expects to operate under a fixed-price contract, he said.
The GPS 3 satellites are designed to provide more accurate navigation signals that are also more resistant to both intentional and unintentional interference than earlier-generation craft. The first GPS 3 satellite has an expected launch readiness date of April 2016, two years later than originally planned, due in part to a number of issues including difficulties by subcontractor Exelis of McLean, Va., in developing the main payload.
As of late last year, the estimated cost of the GPS 3 space segment through the first eight satellites was $4.4 billion, including nearly $2.8 billion for development and $1.6 billion for procurement, according to a newly released U.S. Government Accountability Office report on military acquisition programs. That translates into an average amortized cost of $547 million per satellite, a 5.6 percent increase from 2008 estimates, the report said.
Although the delays better align the GPS 3 satellite schedule with that of its associated ground system, or Operational Control Segment (OCX), synchronizing the two efforts remains a risk area, the GAO said. “GPS 3 satellites cannot be integrated into the constellation or be considered operational until OCX Block 1 is delivered, which is planned for October 2016,” the GAO said.
Meanwhile, the Air Force is slowing down the procurement of GPS 3 satellites beginning in the 2015 budget year, primarily because earlier-generation GPS satellites are lasting longer in orbit than expected. Previously the service expected to buy two satellites next year; now it plans to buy just one, a change that service officials acknowledge will drive up the per-satellite cost.
Nonetheless, Gen. William Shelton, commander of Air Force Space Command, told SpaceNews April 3 the service is considering buying more than two GPS 3 satellites at a time.
“The real question for me is procurement strategy,” he said in January. “How are we going to go after buying these things in the cheapest way possible. Block buys? Multiyear procurements?”
Valerio added that larger blocks would create greater efficiencies.
“It’s inefficient to buy them two at a time. One at a time’s really bad,” Valerio said. “Our biggest lever to reduce costs is quantity. I don’t know what they’re going to do next. They’re looking at their out-year funding profile, then they compare back to the constellation, and what’s the best way for them to buy?”
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