Pentagon said to restructure Lockheed satellites

By Andrea Shalal-Esa

WASHINGTON (Reuters) – The Pentagon will restructure an $11
billion Lockheed Martin Corp. satellite program to warn of
enemy missile attacks, tying future funding to the performance
of two initial satellites already under contract, a defense
official and an industry analyst said on Friday.

As reported last week, officials had already decided to
keep alive the Space Based Infrared System (SBRIS) High
program, for which Northrop Grumman Corp. is designing advanced
infrared sensors, given the lack of backup plans.

Pentagon acquisitions chief Kenneth Krieg backed a
“restructuring plan” for the troubled space program at a
meeting on Wednesday, although he has not formally signed it,
said one defense official, who asked not to be named.

“They can’t get rid of it. It’s considered to be a national
asset,” Frank Lanza, chief executive of L-3 Communications
Holdings Inc., a supplier to Lockheed on the program, told the
Reuters Aerospace and Defense Summit in Washington.

“My view is that they’re going to continue the program, but
they will scale it back somewhat,” Lanza said, noting the
program had repeatedly overrun its budgets, requiring the
Pentagon to justify to Congress the need for the program.

SBRIS was initially expected to cost $3 billion.

Defense officials must submit a restructuring plan, which
also calls for tighter Pentagon oversight, to Congress by a
December 13 deadline under congressional oversight law.

Pentagon spokeswoman Cheryl Irwin confirmed that Krieg met
with Air Force officials this week to discuss how to proceed
with the program. She declined comment on the restructuring.

Lockheed spokesman Tom Jurkowsky said Lockheed had not been
formally notified of the plan, but said SBRIS was making
progress and met several milestones this year and had begun
thermal vacuum testing for high-earth orbit.

Krieg backed Air Force Undersecretary Ronald Sega’s plan,
which underscores the Pentagon’s commitment to the first of two
satellites of six planned for the constellation, said analyst
Loren Thompson of the Virginia-based Lexington Institute.

“If the contractors resolve the problems with the remaining
satellites, then they will eventually get all six. If they
don’t, then the program may be truncated,” Thompson said.

The program would face a detailed review in two years, but
the new plan contained no significant funding changes for now.

Sega decided after a comprehensive review of all the major
space programs — most of which are over budget and behind
schedule — that the government could not afford to cancel any
outright because it did not have any backup plans.

Instead, Sega decided to slow down the schedule for some
satellite programs to allow further work on key technologies,
deploy those satellites that were already ready and pump in
extra funds for other programs to keep schedules on track.

“The government is in a bind because it must have
continuous missile warning and SBRIS is its only real option
for replacing Cold War satellites,” Thompson said.

Officials were also considering research on a new “wide
field of view” satellite, he said, noting the last of the
previous generation of missile detection satellites were
launched earlier this year.

SBRIS satellites will allow officials to see a missile the
moment it is launched over nearly half the earth’s surface.