PARIS — Orbcomm’s selection of Sierra Nevada Corp. (SNC) and MicroSat Systems to build between 18 and 48 second-generation machine-to-machine messaging satellites represents the first big-ticket entry of the U.S. military’s operationally responsive space ethic into the commercial space business.


Littleton, Colo.-based MicroSat, which was purchased by SNC of Sparks, Nev., in January, honed its small-satellite skills working on responsive-space projects, with the U.S. Air Force’s Tacsat-2 satellite launched in December 2006 being the most visible of its efforts. The company is a new entry in the commercial space sector.


For Ft. Lee, N.J.-based Orbcomm Inc., SNC and MicroSat – with substantial assistance from a Colorado-based Boeing unit and ITT Space Systems of Rochester, N.Y. – will be building the first 18 second-generation satellites at a price averaging $6.5 million apiece, not including launch or insurance.


The contract, dated May 5 and announced May 7, includes an option for SNC and MicroSat to build an additional 30 Orbcomm spacecraft at between $5 million and $7.7 million apiece, depending on when the option is exercised and its size.


MicroSat President John Roth said the Orbcomm satellites feature a new design that draws on the TacSat-2 platform. Each second-generation Orbcomm spacecraft will weigh about 130 kilograms at launch, be three-axis stabilized and have a design life of seven years in low Earth orbit.


Roth said May 9 that SNC, in its years-long bid for the Orbcomm work, has established relationships with several launch-service providers that could loft the first 18 Orbcomm satellites in three six-satellite batches in 2010 and 2011.


Orbcomm and MicroSat are expected to decide by early June whether Canada’s Com Dev Europe subsidiary or Argon ST Inc. of Fairfax, Va., will provide the Orbcomm electronics payloads.


Orbcomm operates a fleet of 29 low-orbiting satellites that provide two-way messaging, mainly between machines, for asset tracking and monitoring.


The company plans to launch six fresh, first-generation satellites, including a U.S. Coast Guard-financed payload called the Automatic Identification System, in August aboard a Russian Cosmos 3M rocket. Polyot of Russia provided the platforms for the satellites; Orbital Sciences Corp. of Dulles, Va., is the payload supplier. OHB-System of Germany is overseeing the satellites’ testing and arranged the launch.


Boeing Intelligence and Security Systems in Colorado Springs, Colo., will be responsible for design verification of the second-generation Orbcomm spacecraft, and also will provide expertise to assure that the satellites are placed in the correct orbit, Orbcomm Chief Executive Marc Eisenberg said during a March 8 conference call with investors. ITT Space Systems will perform systems engineering, assuring that the spacecraft meet their performance targets.


MicroSat “has very good backing,” Eisenberg said in a March 7 interview.


Roth said Boeing and ITT had an interest in working with MicroSat beyond what, for the two larger companies, is a modest contract volume. “Their interest is not limited to this commercial opportunity,” Roth said. “They are interested in working with us on ORS [operationally responsive space] and other, more military applications. That’s one of the reasons we got their interest.”


MicroSat will be expanding its Littleton plant to accommodate the new work. Roth said the Orbcomm satellites would be assembled there.


Orbcomm Chief Financial Officer Robert Constantini said Orbcomm, whose operating cash flow will be stretched to finance the second-generation constellation plus its ongoing business, expects to pay between $40 million and $50 million apiece for all three of the six-satellite launches, including insurance.


SNC sweetened its bid by agreeing to provide $20 million in vendor financing starting in May 2010, should Orbcomm elect to use it. Orbcomm and SNC have agreed to stretch out the satellite construction payments between now and mid-2012, with $30 million due in 2008, $25 million due in 2009, $42 million in 2010 and the rest payable in 2011 and 2012.


Eisenberg said that other than Orbcomm’s U.S. Federal Communication Commission deadline for placing 18 second-generation satellites into orbit by March 2014, the company is not in a rush to launch new spacecraft. The current satellites “are doing just fine,” he said during the conference call, and service will improve once the six fresh, first-generation satellites are launched in August.


The second-generation satellites will provide higher-speed messaging and the capacity for longer messages, as well as a 12-fold increase in network capacity. Orbcomm had 380,000 subscriber modules in service as of March 31 and expects substantial further growth in the coming years.