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Air Force Secretary Heather Wilson has made “go fast” the bumper sticker for space programs. The thinking is that, should a military conflict extend into space, the Air Force would be positioned to protect the nation’s satellites from attacks and also quickly launch new ones into orbit to beef up existing constellations.
So far the company that has most benefitted from the push for faster acquisitions and more security is Lockheed Martin. Its advantage comes from being a trusted supplier with a hot production line for military satellites. Over the past several months, the company received a $2.9 billion contract to build three strategic missile-warning satellites, known as next-generation OPIR — and a $7.2 billion deal to produce up to 22 jam-resistant GPS 3 satellites.
The Air Force decided to award Lockheed next-gen OPIR because it was the only way to get this capability in five years or less, according to Air Force procurement chief Will Roper. “We had to go to vendors that are able to make the buses that are able to survive,” he said.
The latest GPS 3 competition was expected to have more players but Northrop Grumman and Boeing opted to not offer proposals. Roper did not want to confirm or deny that Lockheed was the only offeror. “We don’t talk about how many bidders,” he said. The Air Force is pleased with the award, he said. “We believe we’ll get economies of scale and efficiency.”
Why so little competition? There are not that many companies that can meet Air Force requirements, Roper suggested. For next-gen OPIR, the plan is to bring in other suppliers for the sensors. “We don’t have the broad industry base that I wish we could have but we are working to ensure there’s competition for components of the program,” Roper said. “One of the higher risk components is the sensor.”
FASTER, LEANER SMC 2.0 The commander of the Air Force Space and Missile Systems Center, Lt. Gen. John Thompson, said SMC is changing its ways to speed up program schedules. “We’re flattening the organization,” he said. “No more six levels of decision makers. There will be a maximum of three levels.” The staff is being trained to operate under the new “SMC 2.0” rules, he said. “We have to get out of the model where there’s a program executive officer and five thousand action officers under him or her.” Managers and program directors “have to be in the mode of decision making all the time.”
CONTRACTORS OPTIMISTIC “Go fast is something that we’ve always wanted to do,” said Kay Sears, Lockheed Martin vice president of military space. In the past “programs haven’t necessarily emphasized the schedule piece.” The usual program triangle includes capabilities, cost and schedule. “Schedule wasn’t necessarily at the top,” Sears said. “Now the focus is on schedule. It doesn’t mean you don’t worry about the other two. I just means we start to think about trades you might make during that program. And think about the schedule impact.” For contractors, that’s a pretty big change. “There has to be a high degree of trust in order to make that happen, because you’re taking on additional risk in some of those decisions,” she said. “Maybe your decision is different when you focus on schedule.”
SPACE THREATS A KEY FACTOR Sears said the “threat environment” is a key driver in the Air Force’s satellite procurement decisions. “Next-gen programs address the threat environment. That is driving the timing of these systems, whether there’s competition or no competition,” said Sears. “‘Go fast’ is tied to the fact that we have a threat we have to stay ahead of.”
ANALYST’S TAKE Lockheed’s recent wins help the company recover from declining orders after the Air Force decided to stop buying new Advanced EHF communications satellites. “Funding levels remain low due to delays in the follow-on programs, but we should expect to see an increase in space procurement over the next decade for initiatives including the follow-on GPS 3 satellites and the next-generation missile-warning satellite replacement,” said Seamus Daniels, budget analyst at the Center for Strategic and International Studies.
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