PARIS — OHB Technology on Jan. 26 signed a 566 million euro ($800 million) contract with the European Space Agency (ESA) to build 14 Galileo navigation and timing satellites and said the company it bested in the competition, Astrium, is still likely to get about 50 percent of the contract’s value in the form of subcontracting work for Astrium affiliates.

Berry Smutny, chief executive of OHB System of Bremen, Germany, said OHB will be hiring extra staff to handle the Galileo work but will not need to incur any major capital expense in plant or equipment.

“The satellite bus we are using for Galileo is a derivative of the platform we used for the German SAR-Lupe [radar] constellation,” Smutny said in a Jan. 26 interview. “The AIT [assembly, integration and testing] facility was built for SAR-Lupe and has been pretty much empty since that program was completed. So we will not have to add new facilities for Galileo.”

Smutny said the challenge for the OHB team is not so much the company’s production capacity or the technical difficulty of the Galileo satellites, but rather the aggressive delivery schedule. At least 10 of the 14 satellites are scheduled to be launched, two at a time, aboard European versions of Russia’s Soyuz rocket at three-month intervals beginning in December 2012.

ESA signed a launch contract with Arianespace of Evry, France, for the five Soyuz launches at the same Jan. 26 ceremony at the agency’s European Space Research and Technology Centre in Noordwijk, Netherlands at which the OHB contract was signed. The launch contract was valued at 397 million euros. A third contract, for Galileo system support services, was signed with ThalesAlenia Space and valued at about 85 million euros.

OHB is prime contractor for the German military’s five-satellite SAR-Lupe radar reconnaissance system, which is operating successfully in low Earth orbit. Smutny said minor adaptations to the SAR-Lupe platform design will be made for the medium-orbit Galileo system.

OHB and its partner, small-satellite specialist Surrey Satellite Technology Ltd. (SSTL) of Britain, won the competition for the first batch of Galileo spacecraft over a competing bid made by Astrium and ThalesAlenia Space.

But Astrium’s ownership of SSTL and payload-electronics provider TesatSpacecom of Backnang, Germany, plus its possible role as provider of other components, means Astrium likely will harvest 50 percent of the total OHB contract value, Smutny said.

Smutny agreed with an assessment by Astrium Chief Executive Francois Auque that SSTL’s role as supplier of the Galileo satellite payload electronics would account for about 40 percent of the contract’s value.

Smutny said OHB will need to hire 20 to 25 people for the Galileo work — less than it is hiring for the Small Geo satellite platform, which OHB is developing with backing from the European and German space agencies. The Small Geo platform is being positioned as a product for operators of commercial telecommunications satellites.

Smutny bristled at suggestions that the Astrium-ThalesAlenia Space consortium might have been considered the favorite to win the Galileo work because the size of the two companies dwarfs that of the OHB-SSTL team.

“We are the ones with the experience in building constellations,” Smutny said. “SAR-Lupe is in space and is operating. SSTL’sGiove-A satellite was built and launched on time and is also operating well. We are the ones with the flight heritage.”

Giove-A, a Galileo demonstration satellite, was built by SSTL.

Smutny said he expects the European Commission, which is financing Galileo and has hired ESA to perform program technical oversight, will issue requests for bids on a second batch of Galileo satellites in 2010, with a contractor selection to be made in 2011.

The commission has said it wants to maintain competition in the Galileo selection, and also that it wants to have two suppliers of Galileo satellites over the long term.

“We fully expect that there will be a new competition for the second batch and that we will fight hard for this,” Smutny said.

Peter B. de Selding was the Paris bureau chief for SpaceNews.