WASHINGTON — Lockheed Martin has scooped up a contract, worth up to $7.2 billion, for the latest batch of next-generation GPS satellites.
The award decision comes as little surprise, as Lockheed Martin is the incumbent on the GPS III program responsible for manufacturing the first 10 satellites. It was also the sole bidder on the most recent contracting vehicle, which will span an additional 22 satellites.
“The world is dependent on GPS, from getting directions to getting cash from an ATM machine or trading on the stock exchange,” said Air Force Secretary Heather Wilson in a statement. “These satellites will provide greater accuracy and improved anti-jamming capabilities, making them more resilient.”
Three companies — Lockheed Martin, Boeing and Northrop Grumman —won Phase 1 contracts for the follow-one program in 2016 to perform feasibility studies, but the Boeing and Northrop Grumman dropped out of the competition.
Boeing in April 2018 confirmed that it did not bid on the opportunity, stating that the solicitation “emphasized mature production to current GPS requirements and did not value lower cost, payload performance or flexibility.”
Later that month, Northrop Grumman also acknowledged its own decision not to compete, with Kathy Worden, its president and chief operating officer, saying that the opportunity was “not attractive.”
Although the contract was awarded with less competition than the Air Force might have anticipated, the service touted the program’s acquisition strategy. By eliminating reviews and speeding up source selection — perhaps possible because there was only one bidder — the service was able to shave five months from the schedule, it said.
The Air Force also pointed to the fixed price contract as a sign of progress, as Lockheed Martin will be responsible for eating any cost overruns.
“Through this acquisition, we are demonstrating many of the principles of our SMC transformation,” said Lt. Gen. John Thompson, commander of Space and Missile Systems Center. “Getting to a manufacturing steady state in a fixed price environment will allow us the opportunity to realize substantial cost savings, deliver on a planned schedule, and provide avenues for needed warfighter capability upgrades in the future.”
Lockheed Martin in August shipped the first GPS III satellite from Buckley Air Force Base, Colo., to Cape Canaveral, Fla., ahead of its projected launch in December. The first of this newest batch of follow-on satellites, called GPS IIIF, is expected to be available for launch in 2026.