Thornton Firm’s Future Up in the Air ; $500 Million Contract at Stake for Space Imaging

Space Imaging’s future is on the line this week.

Employees at the commercial spy satellite company nervously are awaiting word from a Pentagon agency on whether the Thornton company has beat out a Virginia rival for a key contract worth about $500 million.

The National Geospatial-Intelligence Agency is expected to disclose this week – perhaps Wednesday – whether it has picked Space Imaging or Orbimage to build and operate a next-generation commercial spy satellite.

The spy agency would help bankroll the spacecraft and be a big buyer of the photos. They will be sharp enough to show Earth-based objects 1 to 2 feet across.

A win is crucial for Space Imaging, which needs to launch a new satellite to replace an aging one deployed in 1999. The company, thought to have the inside edge, employs about 280. An NGA spokesman said an announcement is expected “soon.”

“It’s subject No. 1 when any two employees are talking,” said Space Imaging spokesman Mark Brender.

And just how important is the contract, known as NextView? “The contract is integral to our business plan and will determine the long-term future of the company,” Brender said.

The pending announcement comes amid a report last week that defense contractor L-3 Communications of New York was close to a deal to buy Space Imaging from Lockheed Martin and Raytheon. Lockheed and Raytheon together own 77 percent of Space Imaging.

According to the report by Space News, any purchase by L-3 would depend on Space Imaging landing the NGA contract. Officials at Space Imaging, Lockheed, Raytheon and L-3 declined to comment.

In March, the NGA broke off one-on-one negotiations with Space Imaging over the NextView contact after the two sides failed to iron out financial terms. Lockheed and Raytheon had declined to offer financial aid that might have sealed a deal for Space Imaging.

The NGA then put the contract out for bid, attracting proposals from Space Imaging and Orbimage. The winner will emerge as the next big player in the fledgling commercial spy satellite industry.

DigitalGlobe of Longmont is building a next- generation spy satellite after beating out Space Imaging last year for the initial NextView contract. The latest NGA contract is a follow-on deal.

“The winner of the award is going to be another strong long-term entrant with DigitalGlobe,” said Edward Jurkevics of Chesapeake Analytics in Arlington, Va.

Orbimage, which emerged from bankruptcy protection at the end of 2003, launched its first high-resolution satellite in June 2003. “We’re hopeful,” Orbimage Timothy Puckorius said of the NGA award. “But by no means is this a death sentence if we don’t win.”