Independent Board To Review ESA Weather Satellite Decision

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WASHINGTON — The European Space Agency (ESA) has appointed a committee of independent experts to audit the agency’s handling of a $1.7 billion contract to build Europe’s next-generation Meteosat weather satellites, European government officials said March 19.

The six-member Procurement Review Board, which ESA had intended to create in any event, will be rushed into service in an attempt to clear the Meteosat Third Generation (MTG) contract-evaluation process of any allegations of impropriety. Board members include Joerg E. Feustel-Buechel of Germany, a former ESA director; and Per Tegner, former director-general of the Swedish National Space Board.

The 18-nation ESA created the board with the approval of its member states during a meeting of the agency’s ruling council in Paris March 17-18. One of the council’s agenda items was the MTG contract, which ESA’s Tender Evaluation Board had reviewed on three occasions between October and February.

The evaluation team selected a bid led by Thales Alenia Space of France and Italy and including OHB Technology of Germany. The decision to give Thales Alenia Space the prime contractor’s role was not well-received at Germany’s Transport Ministry, which insisted that Germany’s financial contribution to MTG at ESA and at Europe’s Eumetsat meteorological satellite organization should give its industry the leading role.

The German Transport Ministry insisted on reviewing the ESA decision, forcing ESA to delay announcing that it would enter into exclusive contract negotiations with the Thales Alenia Space-OHB team.

ESA Director-General Jean-Jacques Dordain and other ESA managers spent the past month trying to ease Germany’s concerns without overturning the evaluation decision — a move that government and industry officials in Germany and elsewhere agreed would damage ESA’s future ability to function.

The German Transport Ministry sent a representative to the ESA’s council meeting to hear Dordain seek to persuade ESA members that the MTG contract competition was run fairly and now should proceed. One European government official said the German representative gave no indication that Germany’s objections had been laid to rest.

ESA announced March 19 that it would enter into negotiations with the Thales Alenia Space-OHB team, whose bid was unanimously approved as the winner “owing to the lower price.” Officials said the winning bid, at around 1.25 billion euros ($1.7 billion) was about 160 million euros less than the competing bid from Astrium Satellites of Germany.

The agency expects to conclude negotiations in time to present the formal contract proposal to ESA’s Industrial Policy Committee, which approves contract payments, in June.

Thales Alenia Space Chief Executive Reynald Seznec, in a March 19 conference call, said he was happy that the long MTG evaluation process was completed. He said none of the open issues in the bid were particularly serious, and none are of a nature that might derail the company on the way to a contract award.

Seznec said his company and OHB would share about 40 percent of the contract’s total value, with the remaining 60 percent to be spent on subcontractors in Europe that would be selected once the ESA contract is firmly in hand.

MTG is a six-satellite system of four imaging satellites and two satellites equipped with atmospheric sounders. The satellites are to be launched one per year starting in 2016. The entire MTG system is budgeted at about 3.3 billion euros, with Eumetsat paying 75 percent of the total and ESA paying the rest. ESA’s role in MTG includes selecting the satellite builder.

Eumetsat, which had been forced to cancel two previously scheduled meetings of its ruling council in December and early March because of the confusion over MTG, as of March 19 was still undecided about whether to maintain a scheduled March 26 council meeting or whether this, too, should be canceled pending clarification of the German government’s position.

Eumetsat’s council would do no more than begin the formal process of seeking subscriptions — meaning financial contributions — to MTG from its member nations. The organization had hoped to complete the process by September.

It was not clear as of March 19 whether the German Transport Ministry would try to block the contract award, either at ESA’s Industrial Policy Committee meeting in June, or at some point during the Eumetsat subscription process. Given the size of Germany’s financial contribution to MTG, neither ESA nor Eumetsat would be able to proceed on the contract without German approval.