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GPS satellite contract competition is likely to breed innovation

Lockheed Martin is expected to face competition from Boeing and Northrop Grumman for building around 22 improved GPS satellites. The news broke as the last Air Force GPS IIF in a block of 12 satellites was delivered to Cape Canaveral Air Force Station, Florida, from Boeing's manufacturing facility in El Segundo, California via a C-17 Globemaster III. Boeing built GPS IIF, is an interim class of GPS satellite, which will be used to keep the Navstar Global Positioning System operational until the GPS Block IIIA satellites become operational.

A little background here, Lockheed beat Boeing in May 2008 for the initial $1.46 billion contract. However, Lockheed fell behind in completing the first of as many as eight of the GPS III satellites under the same contract. According to Air force data, Lockheed so far has lost $164 million in fees of $437 million provided as incentives and awards for performance. Terence Williams, a spokesperson from Boeing, has stated that the company is interested in competing for the next batch of satellites and is qualified to provide lower-cost alternate GPS III solutions that will improve and strengthen the constellation.

The games have just begun for these companies, as the first phase of competition would be a request for proposals by the end of the year. The new GPS III satellites promise increased accuracy for navigation, along with a signal that supposedly in tune with similar European satellites. The new satellites will also work against jamming, which has become a primary concern for the Pentagon. In the mean time, Lockheed Martin, a major US government contractor, is gearing up to deliver the first GPS III satellite under contract in August 2016. While the Air Force hasn’t mentioned the cost estimate for 22 GPS III satellites that maybe awarded through competition, it has revealed in a statement that the eventual inventory of 32 satellites would be valued at approx. $7.6 billion.

The new competition might just help in delivering a product that is more efficient and has better quality in lower prices.