Germany Hardens Stance on Contested MTG Contract

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PARIS — The German government has informed the European Space Agency (ESA) in writing that it will remain opposed to the award of a $1.7 billion meteorological satellite contract to a French-led consortium regardless of the findings of an independent review board tasked to audit the contract procedures, according to European government and industry officials.

The apparent hardening of Germany’s position with respect to the six-satellite Meteosat Third Generation (MTG) contract makes it less likely that ESA and its MTG partner, the Eumetsat meteorological satellite organization, will be able to move forward on the program in the coming weeks.

The 18-nation ESA had hoped that German reservations about the MTG contract — centered apparently on the fact that the bid led by Astrium’s German division was not selected — would abate once a six-member Procurement Review Board rendered its conclusions April 30.

The board was hired to shed light on the MTG bid-evaluation process, and to clear the air of suspicion that had surrounded the project for months.

The procurement review team began work just before Eumetsat’s 26 member nations met March 26 to begin the year-long MTG implementation process. But Germany — joined by Portugal, for reasons related to financing that officials said were temporarily — declined to approve the project at the Eumetsat meeting.


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With the procurement board members including Joerg E. Feustel-Buechl, a former ESA director who is from southern Germany, ESA officials thought the outside audit would satisfy Germany’s demand for an accounting.

Under what now appears to be an optimistic view, officials said an April 30 Procurement Review Board report that endorsed the MTG evaluation process could be sent to Eumetsat the week of May 3, in time for a vote of unanimous approval and the formal support of the British government before British national elections scheduled for May 6.

But an April 22 letter from Klaus-Dieter Scheurle, permanent state secretary at the German Transport Ministry, to ESA Director-General Jean-Jacques Dordain has made that scenario all but impossible.

The letter says German concerns will not be assuaged by the outside audit, and that Germany continues to believe that a German company should be MTG prime contractor, according to officials familiar with its contents. The winning bid by Thales Alenia Space of France and Italy, and OHB Technology of Bremen, Germany, gives the French-Italian company the prime contractor’s role.

“The letter is troubling because it suggests that Germany has little regard for the Procurement Review Board,” said one official who had read the letter. “It also appears to show no respect for the ESA process, which is curious because Germany is a big ESA contributor. If ESA is undermined by this whole thing, then sooner or later German interests will be, too.”

The German Transport Ministry did not respond to requests for comment on the Scheurle letter April 30. Dordain also did not respond to requests for comment.

The Procurement Review Board on April 30 submitted its report, which will be circulated to ESA’s 18 member governments the week of May 3.

Several officials said that with the German Transport Ministry’s MTG position showing no signs of softening, it will be difficult for Eumetsat to pursue its approval process until after the British elections. If the current British government is voted out of office, it could take weeks, if not longer, for the new government to focus on MTG — even if Germany had approved the project.

ESA meanwhile had planned to conclude final negotiations with the Thales Alenia Space/OHB Technology team in time to present the contract, valued at about 1.25 billion euros ($1.7 billion) for signature in June. Doing so without the approval of Germany — which is paying 34 percent of ESA’s share of the MTG system — will be impossible, ESA officials say.