A delay in delivering 22 new Global Positioning System (GPS) III satellites led the U.S. Air Force to plan a $10 billion bidding contest, as the government agency believes there are other alternatives.
Lockheed Martin has already built an initial set of satellites, comprising 10 units. Despite the bidding contest, the company would still gain a “fair competitive advantage,” according to Lieutenant General John Thompson.
The contest partly stemmed from Lockheed’s late delivery of the GPS III satellites. The cost of delays led to additional $600 million in expenses, said Air Force Space Command head, General John Raymond. It ultimately increased the likely amount of satellites to $5.4 billion.
Thompson said that the agency has conducted market research for the last two years; after they realized there were other alternatives. The research showed a strong competition within the market, while many companies are likely to submit bids for the remaining satellites under contract. Boeing Co. and Northrop Grumman Corp. could be among the potential bidders. The Air Force plans to release a request for proposals very soon, according to Thompson.
The $10 billion represents only one of the many ways on how companies can engage in the business of providing military space equipment. The Space and Missile Systems Center, for instances, awards around $6 billion of contracts every year.
Since satellites as a military resource require stringent testing, the awarded contracts normally include GPS simulation equipment. Air Force Col. Steve Whitney said that past performance will be a key factor in selecting contractors, as there are many viable designs for the GPS III satellites.
The Air Force will still require approval for the $10 billion bidding contest from the joint requirements oversight council of the Pentagon. For this reason, companies are advised to wait before they begin drafting proposals.