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Pentagon may transfer FIA from Boeing to Lockmart
http://www.latimes.com/business/la-f...lines-business
Pentagon May Slash Boeing Contract Officials are finalizing plans to shift much of the spy satellite project to Lockheed because of cost overruns and delays, sources say. By Peter Pae Times Staff Writer September 17, 2005 The Pentagon is on the verge of taking away from Boeing Co. most of its multibillion-dollar contract to build the nation's next generation of spy satellites because of cost overruns and delays, government and aerospace industry sources said Friday. It would be a blow to the company's space operations in Southern California, as Pentagon and intelligence officials are finalizing plans to transfer much of the work to Boeing rival Lockheed Martin Corp., three sources familiar with the talks said. The sources requested anonymity because of the classified nature of the program. The spy satellites are part of a highly classified program known as Future Imagery Architecture. The Pentagon's National Reconnaissance Office has not disclosed the program's cost, the kind of satellite being developed or how many people are working on it. But since awarding the satellite contract to Boeing in 1999, the government has spent more than $10 billion on the program, including about $4 billion in cost overruns, industry analysts estimated. About 5,000 people are thought to be working on it, most of them in windowless Boeing offices in Seal Beach and at its sprawling satellite-making operations in El Segundo. It is unclear how many jobs would be affected in the event Boeing loses the contract, but analysts said it would provide a boost to Lockheed's satellite manufacturing operations in Sunnyvale, Calif. For decades, Lockheed built virtually all of the nation's spy satellites until it lost out to Boeing in a major upset six years ago. "It appears that Boeing's effort to make off with a huge franchise from Lockheed has faltered," said Loren Thompson, a Lexington Institute defense policy analyst. "It's potentially a very big gain for Lockheed." As a new entrant to the spy satellite business, Boeing may have promised too much and ultimately could not deliver, he said. Until recently, much of Boeing's space expertise was in making rockets to launch satellites and developing commercial telecommunication satellites. It had little experience manufacturing satellites with optical lenses that can take close-up pictures from space of objects on the ground. "Boeing bid very aggressively even though it didn't understand the technology as well as Lockheed," Thompson said. Boeing spokeswoman Marta Newhart said Friday that the Chicago-based company had not been notified of any changes to the contract. She declined to comment further. Lockheed spokesman Tom Jurkowsky declined to comment and deferred all questions to the government. The Pentagon said it could not respond to questions about the program. Two months ago, a special panel reviewing Boeing's program recommended to the Pentagon that it stop work on these next-generation electrooptic satellites, concluding that Boeing's proposal was too challenging, industry and government sources said. |
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A slightly different take on the story. Interesting if Negroponte is
the driving figure. Also interesting is the assertion that Boeing will retain the radar part of FIA -- see recent indications that Space Radar, when and if it gets built, is to be the US' sole military/intelligence radar imager. ----------------------------------------------- Aviation Week & Space Technology Negroponte Strips Intel Satellite Work From Boeing 09/16/2005 02:05:18 PM By Amy Butler Boeing is expected to lose its multi-billion-dollar contract to develop secret imaging satellites owing to ballooning costs and schedule slips, and U.S. National Intelligence Director John Negroponte will likely hand the work to rival Lockheed Martin. The government's decision to switch contractors could be finalized as soon as Friday, Sept. 16, sources close to the program told Aviation Week & Space Technology. The satellites will provide high-resolution electro-optical pictures to the U.S. intelligence community as part of the Future Imagery Architecture (FIA) being managed by the National Reconnaissance Office (NRO). Another portion of FIA, for which Boeing remains the contractor, will consist of radar imaging satellites. FIA was among the first efforts up for changes during Negroponte's first program review, which began earlier this month, and his decision may reflect a new hard line for underperforming contractors. The transfer is a major loss for Boeing's space business, which is suffering after the downturn in the commercial communications satellite market and the subsequent crash in demand for space launches. The cost for FIA, a classified program, has soared from $6 billion to more than $15 billion. Roger Roberts, Boeing's senior FIA official, left the company last month under the cloud of FIA's problems. Boeing officials say he simply retired. Howard Chambers was named Roberts's interim successor this week. |
#3
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UPDATE 2-US shifting portion of spy satellite work-sources Thursday 22 September 2005, 5:32pm EST By Andrea Shalal-Esa [EXCERPTS] WASHINGTON, Sept 22 (Reuters) - The U.S. government has decided to restructure a $15 billion Boeing Co. contract to develop secret imaging satellites, shifting a big portion of the work to Lockheed Martin Corp., sources familiar with the matter said on Thursday. The sources said the change would give responsibility for electro-optical satellites -- which act like giant high-resolution cameras in space -- to Lockheed, which made the current electro-optical satellites already in space. Boeing would remain responsible for the radar satellites involved in the project, these sources said. Director of National Intelligence John Negroponte had made the decision and his staff was informing lawmakers, said one source, who asked not to be identified. The FIA program has run into increasing trouble in recent years, with technological snags sending costs soaring and delaying by years the expected launch of new satellites. Rick Oborn, spokesman for the National Reconnaissance Office, which awarded the classified Future Imagery Architecture (FIA) contract in 1999, said only that Boeing's contract was being changed. "We are restructuring Boeing's FIA contract and the details of that are classified," he said. Boeing spokeswoman Marta Newhart said the company had not been notified of any changes to the contract. Lockheed spokesman Tom Jurkowsky said his company also had not been officially notified of any change to the program. Negroponte's decision was relayed to Congress in private meetings on Thursday by several intelligence officials including Air Force Gen. Michael Hayden, Negroponte's top deputy, said one official, who spoke on condition of anonymity because of the classified nature of the contract. The change came just before the Senate Select Committee on Intelligence met behind closed doors to mark up legislation authorizing the federal government's intelligence budget for fiscal year 2006. |
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http://www.dailybreeze.com/business/...s/1748211.html Saturday, September 24, 2005 Harman: Keep Boeing pact intact By Muhammed El-Hasan DAILY BREEZE Rep. Jane Harman, D-El Segundo, said Friday that she will work to keep a multibillion-dollar satellite program in Southern California despite a tentative decision by the Department of National Intelligence to take part of that work away from the Boeing Co. "I believe there are better options, and will continue to work with the DNI and the relevant congressional committees on a plan to save valuable technology and the work force that builds it," Harman said in a statement. Since last week, various news agencies have reported that Boeing may lose part of a U.S. spy satellite contract to rival Lockheed Martin Corp. because of continued cost, schedule and technical problems. The super-secret program, known as Future Imagery Architecture, was awarded to Boeing in 1999 for an unspecified sum. The agency traditionally hasn't discussed the program or its value, estimated by analysts at as much as $19 billion. Boeing has been working on the program in Southern California, but wouldn't say exactly where. Harman's statement Friday indicates at least part of the work is done in El Segundo, where Boeing has its Satellite Development Center. It employs 5,600 workers. "This decision, should it become final, would be heartbreaking for many tireless workers in El Segundo who have made a maximum effort to build a hugely complex system," Harman said. Boeing's contract to develop and build the satellites is being "restructured," according to the government agency that manages the U.S. spy-satellite program. National Reconnaissance Office spokesman Rick Oborn declined to say how the Future Imagery Architecture contract will change, saying Boeing will remain the prime contractor, Bloomberg News reported. Citing anonymous Pentagon and congressional sources, the Los Angeles Times reported Friday that National Intelligence Director John D. Negroponte "has signed off on a plan to strip Boeing Co. of a major portion" of the contract. "This potential move could happen," a source familiar with the issue told the Daily Breeze on Friday on condition of anonymity, "The decision has not come down yet. It is not final. But it is a possibility." In an interview Friday, Boeing spokeswoman Marta Newhart said that Boeing hasn't stopped its work on the program. "We've not heard from the customer," Newhart said. "There's still no official word to the Boeing Co. on the program. So, we're going to continue to execute on the contract we have and fulfill our commitments with the customer." In her statement, Harman argued that Boeing deserves to keep its share of work on the satellite program. "It is appropriate to insist on an overall strategy for space architecture and to face tough decisions," Harman said. "Boeing management readily admits that mistakes were made on this program. But those mistakes are now corrected and I remain hopeful that a well-managed program will ultimately move forward." |
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I'm a bit dubious that the Pentagon is all that concerned about Misty III -- FIA would be much better suited to the military's needs. ------------------------------ Air Force Reviewing Troubled Space Programs Tue Sep 27, 2005 7:52 PM ET By Andrea Shalal-Esa [EXCERPTS] WASHINGTON (Reuters) - The U.S. Air Force is reviewing its space programs -- many of which are behind schedule and over budget -- with an eye to slowing down projects whose technologies are not yet mature, the Pentagon's top space official said on Tuesday. Air Force Undersecretary Ron Sega, a former astronaut and the Pentagon's executive agent for space, also urged greater cooperation by the intelligence and defense communities on satellites, noting their importance to fighting wars abroad, as well as responding to recent hurricanes in the Gulf region... Sega, who directed Pentagon research for four years, stopped short of saying space programs were in crisis but said his previous work made it clear that the technological maturity of current programs differed widely. "We would be well-served to lower the risk as we build operational systems and make sure that we have the parts we need and ... make sure the technology is mature," he said. Sega said he would thoroughly examine each satellite program and how they would fit into an "integrated architecture in space," as well as overall military intelligence, reconnaissance and surveillance work. His remarks came a week after intelligence director John Negroponte recommended canceling a key part of Boeing's contract for the Future Imagery Architecture satellite and hiring Lockheed Martin Corp. to do the work. Negroponte also moved to cancel a second satellite imagery program, Misty, being built by Lockheed, but defense officials said they need the new satellite for military purposes. The Pentagon offered to pump billions of dollars into the classified project, but details are still being worked out with congressional committee that oversees intelligence and defense spending, according to sources familiar with the matter. |
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It will be interesting to see how LockMart will manage "Quick
turnaround" and "adhering to the time line". I suspect that the answer will involve 8X, at least as a transitional program. +++++++++++++++++++++++++++++++++ Satellite FIAsco by Amy Butler Aviation Week & Space Technology 26 September 2005 p. 30 [EXCERPTS] The government is in talks with Boeing and Lockheed Martin to determine how to transfer the former's work on a multibillion-dollar contract to develop secret imaging satellites to Lockheed Martin for a quick turnaround, according to sources familiar with the issue... Boeing was able to avoid the strain of a full contract termination. NRO spokesman Richard Oborn says, "We are restructuring the Boeing FIA contract." Termination was an unfavorable option because it would expose the government to the cost of shutting the effort down. Another unpalatable alternative was to create a team of the two contractors [Boeing and LockMart], a potentially thorny move, given that they are bitter rivals. A new contract is expected for Lockheed Martin, which lost the original FIA competition partially because of Boeing's low-cost proposal... The company will now be expected to provide electro-optical satellites adhering to the time line outlined in Boeing's contract, says a source close to the issue. Launch of the first satellite had slipped as much as five years to 2009. |
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Allen Thomson wrote: It will be interesting to see how LockMart will manage "Quick turnaround" and "adhering to the time line". I suspect that the answer will involve 8X, at least as a transitional program. +++++++++++++++++++++++++++++++++ I think has more to do with corrective actions from the DSB/AFSAB report on the mistakes of the 90's made in space acquisition--specifically the complete and utter stupidity of allowing TFNG to underbid the established industry expert without sufficient deference being given to experience base. This new contract is a corrective action, and involves a completely new set of requirements, so expect it to allow LockMart to put its entire focus beind 'Mission Success' instead of cost as the primary driver. Tom Satellite FIAsco by Amy Butler Aviation Week & Space Technology 26 September 2005 p. 30 [EXCERPTS] The government is in talks with Boeing and Lockheed Martin to determine how to transfer the former's work on a multibillion-dollar contract to develop secret imaging satellites to Lockheed Martin for a quick turnaround, according to sources familiar with the issue... Boeing was able to avoid the strain of a full contract termination. NRO spokesman Richard Oborn says, "We are restructuring the Boeing FIA contract." Termination was an unfavorable option because it would expose the government to the cost of shutting the effort down. Another unpalatable alternative was to create a team of the two contractors [Boeing and LockMart], a potentially thorny move, given that they are bitter rivals. A new contract is expected for Lockheed Martin, which lost the original FIA competition partially because of Boeing's low-cost proposal... The company will now be expected to provide electro-optical satellites adhering to the time line outlined in Boeing's contract, says a source close to the issue. Launch of the first satellite had slipped as much as five years to 2009. |
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Tom Cuddihy wrote: I think has more to do with corrective actions from the DSB/AFSAB report on the mistakes of the 90's made in space acquisition--specifically the complete and utter stupidity of allowing TFNG to underbid the established industry expert without sufficient deference being given to experience base. This new contract is a corrective action, and involves a completely new set of requirements, so expect it to allow LockMart to put its entire focus beind 'Mission Success' instead of cost as the primary driver. Well, yes, I think that the ultimate outcome will be that NRO has pushed the "reset to 1999" button. But that leaves the intervening five or six years from 1999 to 2005 to be made up -- from now till 2010 or a bit later. The present spysats are getting elderly and some replacements may be needed between now and 2010, so what's going to be fill the gap? The only thing I can see is 8X and/or spare CRYSTALs. In any case, the launch of the last T-4B may be informative. |
#9
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Pentagon may transfer FIA from Boeing to Lockmart
Hmm. I'm getting the impression that the Boeing - Lockheed transfer of
FIA EO is not totally done yet. Aside from the following newsbittie, the actual event would be a Really Big Deal that I've not yet seen reported much. +++++++++++++++++++++++++ http://news.moneycentral.msn.com/pro...4&ID=52174 95 October 24, 2005 04:07 PM ETEarnings Preview: Associated Press NewsNEW YORK (AP) - Defense contractor Lockheed Martin Corp. reports third-quarter earnings on Tuesday, Oct. 25. The following is a summary of key developments and analyst opinion related to the period. ANALYST TAKE: Banc of America analyst Nick Fothergill wrote in a September report he expects to see the company's strong cash generation continuing and predicted that space programs will see growth from defense intelligence and communications contracts. [much snip] In mid-September, a government official said the Defense Department is considering shifting part of a classified spy satellite program to Lockheed from Boeing, which received the $4 billion contract in 1999. A private think tank said the Boeing contract has been hampered by cost overruns and delays. |
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