Office of the Secretary of Defense (OSD) is conducting a review that could lead to

higher costs

and a launch delay

for a U.S. Air Force satellite intended to help the military improve its ability to monitor objects in orbit, according to an Air Force official.

OSD became directly involved with

oversight of

the Space Based Space Surveillance System (SBSS) program in January as a result of

cost growth on the program over the last two years, according to Col. Gary Henry, commander of the space situational awareness systems group at the Air Force Space and Missile Systems Center in Los Angeles.

SBSS is run by Boeing Space and Intelligence Systems of Seal Beach, Calif.

The projected cost of the program has grown again by a few percentage points since the restructuring

due to difficulty with payload electronics used to control the spacecraft’s sensor, Henry said.

The SBSS program’s initial budget estimate placed it into the Pentagon’s Acquisition Category-2, which calls for oversight by an individual service, Henry said during a May 31 interview. The Air Force restructured the SBSS program last year, which led Ron Sega, undersecretary of the Air Force, to notify Kenneth Krieg, under secretary of defense for acquisition, technology and logistics, in September that the program’s cost had passed the threshold for Acquisition Category-1, which requires specific

OSD approval before the program can

proceed beyond certain

programmatic milestones, he said.

The threshold for Acquisition Category-1 is an estimated cost of $365 million or more in research and development funding, or more than $2.19 billion in procurement funds, according to a Pentagon document.

The SBSS Pathfinder, or Block 10, budget, which was initially estimated at $350 million including launch cost, is paid for with research and development funds. The current estimate is now $675 million.

The cost growth can be attributed to factors including an overly optimistic initial cost estimate that underestimated the technical complexity of the effort, poor subcontractor management on the part of Boeing and Northrop Grumman Mission Systems (which oversaw Boeing’s work prior to the restructure), and delays due to congressional budget reductions, Henry said.

George Seffers, a spokesman for Northrop Grumman, said in a written statement that the company is working closely with the Air Force to overcome its challenges with space surveillance.

Diana Ball, a Boeing spokeswoman, said in a written statement that the Aerospace Corp., a federally funded research and development center based in Los Angeles, conducted independent reviews of the program in September 2006 and May 2007 that found that the program has turned the corner following the problems that led to the restructure.

Brown, a spokeswoman for Ball Aerospace, deferred to Boeing for comment.

OSD assumed milestone decision authority for major Air Force acquisition programs in March 2006 due to a void at the time in its top civilian leadership position. Despite returning authority for most of the programs to the Air Force in January 2006, the milestone decision authority for most major space programs still resides within OSD. However, SBSS was never on that list, Henry said.

Boeing is working towards a planned first launch in December 2008, though the Air Force believes that April 2009 is a more likely target, Henry said. Meeting the December date would likely require $35 million that is not currently part of the Air Force’s 2008 budget request of $157.5 million for the program, including spare parts in case of breakage during assembly and test of the spacecraft, and possible additional shifts for industry personnel working on the program, Henry said.

OSD will conclude its own review of the program in September, which will include an examination by its Cost Analysis Improvement Group, Henry said. While that review could bring a change to the program’s budget, or a launch delay of several months, the contractor team will likely continue to try to meet a launch date in December, he said.

The Cost Analysis Improvement Group has generally come up with higher cost estimates on space programs than the Air Force.

The SBSS Block 10 spacecraft is expected to offer improvements over the Space-Based Visible sensor on the aging Midcourse Space Experiment satellite used today for space-based situational awareness capabilities, including the ability to track 10 times as many objects, deliver data to the ground twice as quickly, with improved accuracy as well, Henry said.

Meanwhile, program officials are hoping to have a study on options for a follow-on constellation of SBSS satellites ready for the service’s senior leadership to review this fall, Henry said.

The Air Force had initially planned to conduct a competition for a new generation of satellites, but now is likely to buy spacecraft relatively similar to the SBSS Block 10 system in keeping with the service’s incremental approach to satellite development that Sega instituted shortly after he took over in 2005, Henry said.

The Air Force has not yet made a decision on whether it will hold a competition for the follow-on satellites, or if it will award the work to Boeing on a sole-source basis, Henry said.

One area that the Air Force would like to improve upon with the follow-on satellites is timeliness of data reporting, Henry said. The Air Force could add cross-links to the follow-on satellites, or design them to be compatible with additional facilities on the ground, in order to gain more frequent updates on events in space that would allow the service to react faster in case of a threat to its orbital assets, he said.