Wednesday, December 14, 2005

Pentagon revamps Lockheed satellite program

Pentagon revamps Lockheed satellite program

By Andrea Shalal-Esa

WASHINGTON (Reuters) - Pentagon acquisitions chief Kenneth Krieg has decided to continue a Lockheed Martin Corp. missile-warning satellite program after a restructuring that will cut two satellites from the multibillion-dollar plan, according to a copy of his letter to Congress.

Krieg told the Senate Armed Services Committee the Space Based Infrared System High program was "essential to the national security," there were no cheaper alternatives, and new cost estimates for the program -- which has been over budget for years -- were reasonable.

A copy of the December 12 letter was obtained by Reuters, which reported the expected restructuring last week.

Krieg's office last month told Congress the SBIRS program, meant to provide early warning of missile attacks, was nearly 11 percent over budget, with costs now expected to reach $10.6 billion. Krieg's letter did not explain the impact of the restructuring on that cost estimate.

The program, initially planned to cost $3 billion to $4 billion, has had myriad problems over the past years.

Under the restructuring, Krieg said SBIRS would include completion of the development program, which calls for two high-earth, or geosynchronous, satellites, two highly elliptical orbit payloads and associated ground systems. Krieg's letter said the government would procure one additional geosynchronous satellite, instead of the three initially planned following the development phase.

He would not award a contract for the additional high-earth orbit satellite until he was confident about the performance of the developmental version.

Krieg also vowed to conduct "enhanced oversight of the program to ensure that cost and management are closely monitored."

In addition, he said he would work with Congress to initiate a new competitor program for space-based "Overhead Non-Imaging Infrared" satellites to generate competition and exploit new technologies.

"Given the continued importance to support strategic and theater missile warning and defense, I am convinced there is a need to develop a competitor capability, in parallel with the SBIRS program, to ensure the nation's missile warning capacity is sustained," Krieg told the committee.

Bethesda, Maryland-based Lockheed had no immediate comment on the letter. Northrop Grumman Corp., based in Los Angeles, is the primary subcontractor on the program.

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