This Week's Top Headlines

(Full text of these stories can be found in the printed edition of Space News)

MICROSAT TO BUILD ORBCOMM SATELLITES

By PETER B. de SELDING
Space News Staff Writer

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.

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CANADA PONDERS ITS SPACE FUTURE AFTER COLLAPSE OF MDA SALE TO ATK

By LEONARD DAVID and LON RAINS
Space News Staff Writers

MONTREAL and WASHINGTON -- The Canadian government's decision to block the proposed sale of MacDonald Dettwiler and Associates' (MDA) space assets to Minneapolis-based Alliant TechSystems (ATK) has given new life to a debate about the future and priorities of Canada's space industry.

The debate over the failed $1.33 billion deal for MDA's Information Systems and Geospatial Services branch has been "a galvanizing moment" for the Canadian government, Ron Buckingham, of the Ottawa-based Northeast Space Company, told Space News.

"We needed a boot in the posterior to get public and political attention about the importance of space," said Buckingham, who was co-chair of a meeting here April 28-May 1 involving top officials from the Canadian Space Agency, military space leaders, university researchers and industry executives.

The event, "Astro 2008 -- Harnessing Space to Address Global Issues," was sponsored by the Canadian Aeronautics and Space Institute of Ottawa.

"We really need to find a way to do a lot more in Canada with the skills and capabilities that we have," said Bjarni Tryggvason, the other co-chair of the meeting and a former Canadian astronaut who works for the Canadian Space Agency (CSA).

CSA President Guy Bujold said he was bullish about recent expressions of support from Canadian Prime Minister Stephen Harper for increasing the Canadian space budget. "It is also incumbent upon us to bring forward to the government the ideas that are end-to-end solutions ... that will allow them to buy into even more investment in space," he added. Major-General Mike Ward, chief of force development for the Canadian Forces, said a new directorate will begin work this summer on a long-term plan for developing needed military space capabilities.

Space in Canada is at a watershed, said John Keating, chief executive officer of ComDev of Cambridge, Ontario. "We don't have an industrial strategy for space in Canada," Keating said, noting that a new plan is needed to sustain and develop Canada's space industry. It has taken some 40 years in a private-public partnership to gain world-class capability, he said, adding that he fears that heritage could be destroyed. "The spotlight is absolutely shining on the space segment now. I don't think business as usual is going to cut it."

James Fergusson, director of the Centre for Defence and Security Studies and professor at the University of Manitoba in Winnipeg, agreed, noting that "with no strategic roadmap, the government is clearly vulnerable to emotional short-term political considerations." Fergusson advocated creation of an independent national commission to shape a "realistic, effective and coherent" national strategy for space in Canada. "With limited resources, Canada can no longer afford to rest on its laurels and attempt to exploit space for Canadian strategic economic and security interest based upon the inefficient application of resources seeking to meet the individual bureaucratic interests," he said.

Paul Cooper, vice president for strategic development for MDA Information Systems, said MDA is looking for a long-term growth solution, because it has "bumped up against the limits of what one company can do inside Canada."

The ATK-MDA deal initially was rejected April 10, but ATK had a month under Canadian law to convince Industry Minister Jim Prentice to reverse his decision. In a statement issued May 9 Prentice said he had studied the issue exhaustively and concluded that the deal did not provide "a net benefit to Canada," a prerequisite for approval of any deal under the Canada Investment Act, or ICA.

"Foreign investors bring with them capital, knowledge, capabilities and technology that can increase the productivity, efficiency and competitiveness of Canadian firms. However, where a significant transaction does not demonstrate net benefit to Canada, it cannot be approved under the Investment Canada Act," Prentice said in his statement and in a letter sent to Alliant TechSystems.

After the sale was announced, it sparked a major political debate in Canada about the wisdom of giving the United States control of cutting-edge Canadian technology such as the Radarsat 2 satellite and fostered fears that Canada's access to Radarsat 2 imagery might be adversely affected by the U.S. export controls on satellite technology, which are governed by the International Traffic in Arms Regulations (ITAR).

ATK spokesman Brian Cullin said the company had been confident the deal would go through because "of the previous 1,587 deals reviewed under the ICA, none had ever been denied." He also acknowledged that the company did not anticipate the degree to which ITAR would be a factor in the Canadian government's decision.

"We tried to convince them otherwise; obviously we were not persuasive," Cullin said in a May 9 telephone interview. "Our focus was to grow the business internationally as well as domestically in Canada."

Cullin said ATK considers Prentice's decision final.

ATK said in a May 9 statement it would add a one-time charge of $6.6 million in its just ended fourth quarter to account for the costs associated with the failed deal. Cullin said the company intends to explore all legal avenues to see if it can recover those costs from the Canadian government.

Vancouver-based MDA issued a brief statement noting that the government had turned down the deal. "MDA will continue with its baseline long-term business plan of growing its business and delivering shareholder return. The company will be holding its first quarter update on May 12, 2008, at 2:30 p.m. PST."

In a May 9 speech at Canadian Space Agency headquarters in Quebec, Prentice said he has appointed an advisory committee "to guide me in the future prospects of the CSA, and I look forward to their recommendations."

During his speech, according to a transcript published on the Industry Canada Web site, Prentice lavishly praised Canada's accomplishments in space. "Why should Canadians care whether or not we remain at the forefront of space exploration and development? Some might answer that question by saying, 'Because that is where our future lies.' But I would answer it in a different way: because that's what gives us a competitive edge in today's economy," Prentice said.

"Of course, we have a special relationship with our closest ally and most important trading partner, the United States. We will build upon that partnership, but we will maintain our mutual respect for the sovereignty of each power. We share with the United States a concern that technology stays in the hands of friendly nations. But we will also work with Canadian firms with global aspirations that are constrained by foreign concerns over the export of technology," Prentice said.

At the end of his speech, Prentice announced the signing of a four-year, $109-million contract extension between the Canadian Space Agency and MacDonald Dettwiler for continued engineering services for the Canadian-made Mobile Servicing System on the international space station.

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SPAIN TO BUY IMAGING SATELLITE FROM EADS-CASA, ASTRIUM

By PETER B. de SELDING
Space News Staff Writer

PARIS -- The Spanish government, which has been a longtime junior partner to France in developing optical reconnaissance satellites, has agreed to purchase a medium-resolution spacecraft from EADS-CASA and Astrium Satellites as part of its own civil-military national space program, according to Col. Antonio Lazaro Espada, the Spanish air force's chief of the French-led Helios optical reconnaissance program.

The contract for the satellite, to be called Ingenio, is expected to be signed within weeks and to be valued at 115 million euros ($177 million). Procurement management has been delegated to the 17-nation European Space Agency (ESA) in an unusual relationship given that only Spanish money is being used to finance the project.

Because Spain's domestic industry does not possess all the expertise needed to build Ingenio, Spanish authorities have agreed that up to 50 percent of the satellite's cost can be spent outside the country.

EADS-CASA, the Spanish arm of Astrium of Europe, competed with the Spanish division of Thales Alenia Space of France and Italy for the Ingenio contract. Thales Alenia Space officials protested that their bid was technically superior and less expensive than the Astrium proposal, but that view was rejected by ESA managers.

Peter Edwards, head of ESA's Earth observation projects department, said ESA used its long-established proposal-evaluation process to weigh the two bids, and that while Spain's National Aerospace Technology Institute, INTE, was involved in the evaluation, it was ESA's criteria that were used to arrive at the decision.

"We had 70 engineers involved in this evaluation that spent three months reviewing the details of the bids," Edwards said May 7. "I know there are some who are upset, but the CASA-Astrium proposal received more points in our evaluation."

Espada said here May 6 during the Milspace 2008 conference organized by SMi that Astrium also has been selected to build the second component of Spain's emerging national space-based observation program, the Paz radar satellite. That satellite's procurement is being managed without ESA's involvement, Edwards said.

Espada said both satellites are scheduled for launch around 2012.

An Astrium official said the company planned to use its AstroSat platform for both satellites, and likely would be able to build both Ingenio and a similar satellite, called Spot 6, at about the same time to save costs. Spot Image of Toulouse, France, in which Astrium is the principal industrial shareholder, needs a new satellite to succeed the Spot 5 Earth mapping satellite now in orbit.

A Spot 6 order has been held up as Astrium and the French space agency, CNES -- which is also a Spot Image shareholder -- negotiate a CNES exit from Spot Image's equity to leave Astrium as the main shareholder. How much CNES would pay for Spot 6, if anything, remains a subject of negotiation.

Espada said the Spanish Defense Ministry and the Ministry of Industry are jointly backing development of the dual-use satellites to give Spain a full seat at the table of European governments possessing independent space-based reconnaissance assets.

Spain purchased a 7 percent stake in the French-led Helios-1 imaging satellite program and has a 2.5 percent share of the higher-resolution Helios-2 system. Spain also has agreed to finance 3 percent of the common costs of France's two Pleiades high-resolution optical satellites. Unlike the military-dedicated Helios spacecraft, the two Pleiades units, to be launched in 2010-2011, are intended for both military and civil-commercial users.

Espada said Spain expects to spend around 350 million euros on the Ingenio and Paz systems.

Industry officials said the Ingenio satellite has been budgeted at about 195 million euros including a ground network and launch. Edwards said Spanish authorities, not ESA, are responsible for securing a launch. Ingenio is expected to weigh around 600 kilograms at launch and to carry an optical imager capable of detecting objects with a diameter of 2.5 meters.

Espada said Spain's decision to build its own civil-military observation system should not be viewed as a sign of dissatisfaction with its role as a junior partner in the French Helios and Pleiades efforts.

"We are very happy with our French colleagues and I would like to thank them," Espada said. "We have learned a lot from them. But our role in Helios does not meet our operational needs in a timely manner. I emphasize the word 'timely.' It is also cost-efficient and beneficial for our industry to have our own space-based means. It gives you a power you don't have if you don't have these means."

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