December 13, 2005

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

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.