Delay May Send Cash Martin's Way

The company could make $200 million if a procurement is hamstrung

A series of government panels may postpone Pentagon plans for a $2.5 billion procurement of 30 Global Positioning System satellites, handing Martin Marietta Corp. with a $200 million windfall to fill the order, an Air Force official says.

Six top-level panels are planning the future of the Pentagon-run satellite navigation network. The panels are trying to coordinate military, civil and international use of the satellites, decide how the network should be paid for, and how it might be exploited or undermined by enemies.

If the panels recommend a delay in the next contract for GPS satellites, dubbed the IIF procurement, the military and industry might have to cope with a degraded GPS network between 2000 and 2004, said Col. Michael Wiedemer, the Air Force's GPS program manager.

Without the IIF contract, there may be too few spare GPS satellites to replace those that die in orbit between 2000 and 2004, he said. If the IIF procurement is delayed, Pentagon officials may have to ask Martin to build an extra six satellites on top of its 20-satellite IIR contract, said Wiedemer, based at the Air Force Space and Missile Systems Center in El Segundo, Calif. The six extra satellites would be worth $200 million to Martin.

"We would always like the extra work," said Karen Purdy, a spokeswoman for the Bethesda, Md.-based company.

The prospects for delay are increased by limited coordination between the panels, one of them headed by the Central Intelligence Agency, Wiedemer said.

"There is an enormous potential for the committees to make non-common recommendations" during the IIF contract's request-for-proposal phase, he said. To minimize coordination problems, Wiedemer convened a group of Pentagon GPS experts to work with each panel.

To avert a delay in the December 1995 IIF procurement contract, the Pentagon can include an option in the contract to use the panels' recommendations, Wiedemer said. For example, the option could allow military programs and civil programs to be merged, or for the overall architecture of the network to be changed, said Wiedemer.

Another reason to avoid a delay is the shortage of contracts in the military satellite industry, said Wiedemer. Cuts to defense and intelligence budgets have hit the industry hard, forcing layoffs and threatening the existence of some companies.Among companies likely to bid are GM Hughes Electronics Corp., Rockwell International Corp., Boeing Co., TRW Inc., and the merging pair of Lockheed Corp. and Martin Marietta. William Johnson, executive director of GPS International Association, Grapevine, Texas, which represents about 600 corporate users, is not worried.

"With the life of satellites being longer than expected, there would be no potential crisis until 2015 or even 2020," he said.

The six GPS studies underway are:

  • A White House Office of Science and Technology Policy study to evaluate the long term health and value of the GPS system. - A study by the National Academy of Public Administration, Washington, D.C., focusing on international GPS cooperation.

  • A study by the National Academy of Sciences to examine possible GPS add-ons.

  • A report on GPS augmentation by the Departments of Defense and Transportation, expected in November.

  • A study by the Defense Science Board to assess possible enemy use or disruption of the GPS network.

  • A study led by the Central Intelligence Agency, intended to develop a forecast by intelligence agencies of the national security threats and opportunities posed by GPS.

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