NATIONAL HARBOR, Md. — Exelis Geospatial Systems has finally shipped the navigation payload whose developmental hiccups have delayed the first launch of the U.S. Air Force’s next-generation positioning, navigation and timing satellite constellation by about two years.

Gen. John Hyten, commander of Air Force Space Command, said the payload arrived the weekend of Sept. 13 at the Littleton, Colorado, facility of GPS 3 prime contractor Lockheed Martin Space Systems.

“You can’t say the program is doing well when the program is two years behind,” Hyten said in a meeting with reporters Sept. 17. “Obviously a navigation satellite is not very good without a navigation payload.”

But Hyten said he was “thrilled” the initial payload was now in Lockheed Martin’s hands.

Rochester, New York-based Exelis Geospatial Systems has committed to deliver the payloads for the second, third and fourth GPS 3 satellites “right on the heels” of the first, Hyten said. “If that’s the case, in the not too distant future GPS 3 will be in good shape,” he said.

Exelis has had a role in building GPS payloads since the program’s inception, but struggled with the latest version, which required advanced capabilities including higher power and accuracy. As a result, the first GPS 3 launch has been pushed from 2014 to 2016.

In a Sept. 9 interview, Hyten said Lockheed Martin’s GPS production line is set up to build many satellites quickly and that the initial platforms are “all just sitting right there [waiting] for the navigation payload. It’s really kind of sad.”

Lockheed Martin Space Systems of Denver is under contract to build eight GPS 3 satellites, and Hyten said the company has dedicated more than a dozen employees to work on solving the payload problems.

The problems have been costly for Lockheed Martin. The company has been denied some $26 million in potential award fees on the first two satellites since 2011, including $17 million from May 2013 to May 2014, according to Maj. Eric Badger, an Air Force spokesman.

The company did earn about $2.6 million in award fees during the May 2013 to May 2014 time frame for satellites three through eight. In total, the company has earned about $5.3 million in award fees for the satellites, which unlike the first two are considered production models.

In November 2013, Exelis officials said they believed the issues with the initial payload had been resolved and that it would be delivered to Lockheed Martin the following spring. They attributed the delays to “first-time development and integration issues, including design changes to eliminate signal crosstalk,” which occurs when a signal broadcast on one circuit creates an undesired effect on another.

As recently as May, Exelis said it hoped to ship the payload in July, but cautioned that the hardware would be considered “delivered” only after completion of acceptance testing following integration with the first satellite platform.

Hyten said those tasks still lie ahead. “I’ll feel a lot better when the first one gets through and is operating,” he said. “I don’t want to be overly negative, but we’re two years behind and that’s a lot of money.”

The GPS 3 program was initially touted as a model for Air Force space acquisition and development processes. The delays clearly irked Air Force space leaders, who complained about a lack of competition in satellite navigation payloads.

That prompted Lockheed Martin to issue a request for information earlier this year on alternate payload providers. At least five companies responded to the request, according to Lockheed Martin.

Meanwhile, the Air Force in June issued a call for contractors interested in building the next batch of GPS satellites. Northrop Grumman Aerospace of Redondo Beach, California, and Boeing Space and Intelligence Systems of El Segundo, California, have said they responded to that solicitation.

Mike Gruss covers military space issues, including the U.S. Air Force and Missile Defense Agency, for SpaceNews. He is a graduate of Miami University in Oxford, Ohio.