Mark Valerio, Vice President and General Manager, Surveillance And Navigation Systems, Lockheed Martin Space Systems

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With no new military satellite programs on the horizon, one of the primary goals for leaders of Lockheed Martin Space Systems is to find ways to trim costs. That effort goes far beyond Lockheed itself, which has undergone multiple rounds of layoffs, and extends to the subcontractors and suppliers who provide components for the U.S. Air Force’s Space Based Infrared System (SBIRS) missile warning satellites and GPS 3 navigation satellites.

Lockheed’s Mark Valerio and his colleagues are visiting companies throughout their supply chain and looking for ways to help their suppliers become more efficient. In addition, Lockheed officials are searching for ways to save money by using common hardware and software throughout the company’s satellites programs. Any component or design that can be shared can provide savings, Valerio said.

Before taking the helm of Lockheed’s surveillance and navigation systems business unit early this year, Valerio served as the company’s vice president of programs with responsibility for contract and subcontract management as well as assembly, test and launch operations. Prior to that, he was the vice president and general manager overseeing Lockheed’s classified military space programs. From 2004 to 2006, Valerio was Lockheed’s vice president and SBIRS deputy program manager. He recently spoke with Space News correspondent Debra Werner.

 

How is the first dedicated SBIRS satellite, GEO-1, performing on orbit?

GEO-1 is doing extremely well. We launched it on May 7. In the middle of June, we received our first image. At the end of September, we will finish up the calibration and tuning phase of the program. We will then go through about six months of repositioning the satellite. Then we will work with the Air Force to check the quality of the data. The satellite is slated to enter operations in the third or fourth quarter of 2012.

 

What’s the status of the second dedicated SBIRS satellite?

GEO-2 is moving along very well. We have integrated the payload built by Northrop Grumman, we completed acoustics testing, and we are starting the thermal vacuum testing of the satellite. We are slated for a launch in the spring or summer of next year. We will be ready for that.

 

What plans do you have for technology insertion in the GEO satellites?

When I look at technology insertion, I look at it in two ways. I look for capability improvement in the out years and I look for affordability in the near term. I look for ways to use common products, not only between SBIRS satellites but among other satellites as well. If we use common products, we can get economies of scale.

 

Are you planning to make changes to GEO-3 and GEO-4?

We are studying that right now to determine the return on investment. We are putting together a package that will go forward to the Air Force. For example, computers are changing very rapidly. There might be things we can do in that area to make GEO-3 and GEO-4 more common with Advanced Extremely High Frequency (AEHF) satellites, GPS or satellites we build for other customers.

 

What changes are planned for GEO-5 and GEO-6?

We are looking at ways to make them more affordable. We are working to become more efficient. We are in the process of right-sizing our work force for that phase of the program.

Before we launched GEO-1, we essentially had two separate programs: the Engineering Development Program and the SBIRS Follow-on Program. Now we are combining those organizations into one.

To reduce costs, we are driving down labor costs and looking for common products. Instead of buying one set of reaction wheels or one set of batteries just for SBIRS, we can buy them across multiple programs and get economies of scale just like you do when you go to Costco as opposed to a normal supermarket.

 

Air Force officials are discussing plans to save money by buying more than one satellite at a time. Do you think Congress ultimately will be receptive to that?

Yes. The question is how you actually fund that. Almost everybody understands the economies of scale you get in buying satellites in a quantity of more than one.

 

You have Air Force contracts for the first two SBIRS highly elliptical orbit payloads and the first four dedicated SBIRS satellites. When do you think you will be awarded a contract for GEO-5 and GEO-6?

Northrop Grumman and Lockheed are ready to start at any moment. I know the Air Force has to get its acquisition strategy approved.

Subcontractors are delivering parts for GEO-3 and GEO-4. By the middle of next year, about 50 percent of the subcontracts will be completed. So the sooner we can get on contract for GEO-5 and GEO-6, the less risk we will have of parts obsolescence. If we wait too long, subcontractors may shut down. We may not be able to get the parts so we would have to then change the design. That just drives up costs.

 

Turning to the GPS 3 program, what’s the status of that contract?

We are under contract for a GPS 3 prototype unit, the GPS Non-flight Satellite Testbed. We are under contract for flight vehicles one and two, and for long lead items for flight vehicles three and four. We expect to get under contract for long lead items for flight vehicles five and six and for the production of satellites three and four by the end of the year.

 

What have you learned from building the GPS 3 test bed?

The Air Force has laid out this program to address all the lessons learned from the acquisition problems of the last decade. In the space industry, the business is characterized by low volume and high complexity. Many times problems are discovered during integration of the first flight vehicle. The GPS 3 program includes a prototype vehicle as well as a large set of engineering development units and a large set of qualification units. As a result of that, we are seeing dramatic reductions in nonconformances.

We are also doing a lot of enhanced testing on the parts that will go into the boxes, the subassemblies and the spacecraft. That will pay big dividends later on.

 

You built a factory to produce four GPS 3 satellites a year but the Air Force is now planning to build two a year. What impact does that have on cost?

When you go from four to two, you are not as efficient. So we are working with our customer to drive down the cost in other ways, like launching two at a time, for example.

We are looking again at common products between GPS and the National Oceanic and Atmospheric Administration’s Geostationary Operational Environmental Satellites and other satellites so we get economies of scale. We are continuing to look at every possible way to become more efficient and drive down the cost of our systems and our products.

 

Has the Air Force been receptive to your proposal to launch two GPS 3 satellites at a time?

Definitely. We are just finalizing our study. Dual launch would save on launch costs and, if necessary, offer the capability to populate the GPS constellation faster.

 

Boeing has proposed continuing to build GPS 2F satellites so the Air Force could stop investing in the GPS 3 program. What’s your reaction to that idea?

GPS 3 is the next step in modernizing the GPS constellation. GPS 3 adds a new signal, the new civilian L1 signal that is compatible with European signals, providing increased coverage and better precision. GPS 3 signals will have higher power and better accuracy, which improves anti-jamming performance and provides better capability for civil users and warfighters in urban canyons, dense forests and mountainous terrain.

Because of the satellite’s size, weight and power, we can launch two at a time and add capabilities later on, including a digital signal generator. The size will give it the capability for cross-links later, which would allow you to have quicker updates from the ground station. GPS 3 also has a 25 percent greater design life than the previous systems.

 

A recurring theme is your efforts to trim costs. How are you approaching that?

We are looking everywhere, leaving no stone unturned. Fifty percent of our work goes out to the supply chain. We are talking to our suppliers at all tiers. We are asking them, “What can we do to help you become more efficient?” They are coming up with some good ideas.

As our programs move from development to production, we are also trying to reduce the cycle time and reduce labor costs. Where we can leverage other designs, we do.

And we are asking “How can we reduce obsolescence?”

 

How can you?

If we have a more flexible design we can accept different kinds of parts. On SBIRS, the optical focal plane parts are ones that we are concerned may become obsolete. We are looking at future designs that don’t make us so susceptible to increased costs.

 

Would costs rise because your supplier stops making that part?

Yes. If they stop making them, you have to get another supplier. You have to qualify them. You have to redesign the packaging. We are looking at every single way that we can be more efficient. How can we drive our costs down and get the capability out to the warfighter as soon as possible?