Boeing Targets $17 Billion in Satellite Manufacturing Contracts

Paris — Boeing Co. is seeking to position itself for a period that promises an unprecedented volume of U.S. government satellite contracts, company officials said during a Dec. 11 conference call with journalists in which they discussed work on GPS navigation satellites, the Wideband Global Satellite telecommunications system and its bid for the Transformational Satellite (TSat) contract.

Officials from the Boeing Space and Intelligence Systems division said they had learned the hard lessons from contract glitches that have resulted in cost overruns and delivery delays on their programs in recent years.

Boeing estimates that between now and the end of 2008, satellite contracts valued at between $15 billion and $17 billion will be up for competition. The figure includes T-Sat, GPS-3, the next-generation Tracking and Data Relay Satellite System (TDRSS) and the U.S. government?s series of Geostationary Operational Environmental Satellites, or GOES-R, plus several commercial-satellite programs for which Boeing expects to bid in 2008.

Boeing officials said they are assessing the contract value for the TDRSS deal at slightly more than $1 billion for four satellites.

Boeing is prime contractor for the GPS-2F block of navigation satellites and also is bidding for the first batch of GPS-3 spacecraft, called Block A, which is tentatively expected to be in service starting in 2013. This first group of spacecraft will include at least eight satellites, with options for up to 12 more, according to Boeing.

The U.S. Air Force has been reviewing GPS-3 bids from Boeing and competitor Lockheed Martin Corp. since late August and is expected to return with more-precise bid specifications, which will be followed by a second series of bids by both companies. A final decision on a Block A contractor is expected sometime in 2008.

GPS-3 will be much larger than its predecessors under the Boeing design. Boeing is bidding a modified version of its 702 platform for the work.

John Duddy, Boeing?s GPS program manager, said the first GPS-2F satellite, which he conceded has faced ?a lot of challenges? in development, is in thermal-vacuum testing and will be delivered in 2008. ?We had some issues on GPS, and we needed to get back to basics,? Duddy said. ?Now, if there are issues with suppliers, we ?go ugly? early so that we can work the issues. Over the last one and one-half years there has been quite an improvement.?

Boeing is under contract to deliver five Wideband Global System telecommunications satellites. The first was launched in October and now is undergoing tests of its payload, program manager Mark Spiwak said. Transfer to the U.S. Air Force is expected in January, he said.

The second and third WGS satellites are on track for launches in the third and fourth quarters of 2008. The fourth and fifth models, part of a Block 2 WGS order, will be launched ?in the 2011 time frame,? Spiwak said. The U.S. Air Force is expected to exercise an option for a sixth WGS satellite, for launch in 2013, following an agreement with the Australian government to participate financially in WGS in return for use of the constellation. Spiwak said Boeing expects to receive formal go-ahead on the sixth satellite within a few weeks.

Boeing officials say the three Spaceway Ka-band satellites now in orbit — two for DirecTV Group for television broadcasts, one for Hughes Network Systems for two-way Internet links — will have the effect of technology demonstrators for certain TSAT elements as the U.S. Air Force weighs the Boeing bid against a competing offer by Lockheed Martin and Northrop Grumman Corp. John Petersen, Boeing?s T-Sat program manager, said the company plans a second series of demonstrations of its T-Sat capabilities using the Spaceway 3 satellite in February. Spaceway 3 is in final in-orbit testing by Hughes Network Systems and is expected to begin commercial service by March.

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