Lockheed Martin Space Systems will lose its entire fee of about $70 million to cover an 18 percent overun on the first GPS 3 satellites it is building for the U.S. Air Force, Bloomberg’s Tony Capaccio reported April 16.

“The Air Force estimates the first two GPS-III satellites will cost $1.62 billion, spokeswoman Vicki Stein said in an e- mailed statement. Lockheed Martin, the biggest U.S. defense contractor, had estimated the cost for development, testing and building at $1.5 billion as of Feb. 29.”

Lockheed Martin spokesman Michael Friedman tells Bloomberg that the first GPS 3 satellite remains on track to be available for launch in 2014.

“‘While we have encountered challenges associated with higher standards for parts testing and first-time technical issues, the program is on firm footing and our cost estimate remains within the original Air Force budget,’ said Friedman. He said the company doesn’t discuss specifics of fees.”

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