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Washington • Lockheed Martin Corp. is likely to face competition from Boeing and Northrop Grumman for billions of dollars in contracts to build as many as 22 improved GPS satellites, according to a top U.S. Air Force procurement official.
The Pentagon approved an Air Force proposal for competition in part because Lockheed fell behind in completing the first of as many as eight of the GPS III satellites under a contract it won in 2008. Lockheed is about 28 months late in delivering the first satellite because of flaws in the satellite's navigation payload system, produced by a subcontractor, that the company and the military say are now corrected.
"We want to get competition as much as we can so that we can try to drive down costs and get a better system," Lt. Gen. Arnold Bunch, the Air Force's top uniformed acquisition official, said in an interview.
More than one company has expressed interest, but "we've got to figure out if it's really viable" before seeking final Pentagon approval next year to proceed with a procurement competition, he said.
The Global Positioning System developed by the U.S. military has become ubiquitous, providing turn-by-turn directions on the smartphones of drivers and hikers as well as coordinates for smart bombs hitting Islamic State targets in Syria and Iraq.
The new GPS III satellites promise increased accuracy for navigation, plus a signal that's compatible with similar European satellites and greater resistance against jamming, which has become a top concern for the Pentagon.
Lockheed, the biggest U.S. government contractor, now plans to deliver the first GPS III satellite under contract in August 2016, provided that corrections to deficiencies in its navigation payload pass testing in a vacuum test chamber that replicates space. The Air Force hasn't yet executed an option for a ninth and 10th satellite.
The first phase of competition for more of the satellites would be a request for proposals by the end of the year, canvassing interested contractors in a "production readiness assessment." That could result in three early contracts of as much as $6 million each, Bunch said.
A contest to build new GPS satellite would be separate from the competition the Air Force has begun for launching military satellites.
The Air Force this month released a request for proposals on the first of nine competitive military launches through 2017 that will pit billionaire Elon Musk's Space Exploration Technologies Corp., or SpaceX, against United Launch Alliance, a partnership of Lockheed and Boeing.
While the Air Force didn't provide a cost estimate for the 22 GPS III satellites that may be awarded through competition, the service said in a statement that the eventual inventory of 32 satellites will be valued at about $7.6 billion.
Lockheed beat Boeing in May 2008 for the initial $1.46 billion contract.
Boeing is interested in competing for the next batch of satellites and "is uniquely qualified to provide lower-cost alternate GPS III solutions that will improve and strengthen the constellation," said Terence Williams, a company spokesman.
Northrop is looking forward to receiving the request for proposals and is "excited about the potential opportunity to support this mission area," spokesman Randy Belote said.
While Lockheed is "fully focused on execution and performance for the eight GPS III satellites we currently have on contract," it will compete for the remaining 22, said spokesman Chip Eschenfelder.
The payload that required fixes provides "GPS III's powerful new signals to the ground users," Eschenfelder said. The satellite is now in a vacuum chamber in Denver, where it will be subjected to the depressurization and extreme heat and cold conditions it would experience during its lifetime in orbit, he said.
"We had a technical issue that we've worked our way through now, and now we're getting satellites," Bunch of the Air Force said.
The Government Accountability Office said in a report last month that in addition to the delay in delivery, the date when the GPS III will be ready to launch has fallen even further behind to May 2017, or about three years later than planned.
Because of the delays, Lockheed so far has lost $164 million in fees out of a pool of $437 million provided as incentives and awards for performance, according to Air Force data.