Pentagon postpones big satellite contract till FY10
The U.S. Defense Department has decided to postpone a decision in a multibillion dollar satellite communications competition between Lockheed Martin Corp (LMT.N: Quote, Profile, Research, Stock Buzz) and Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) until fiscal year 2010, an industry source informed about the decision said on Sunday.
The Pentagon’s Defense Advisory Working Group (DAWG) decided on Saturday to terminate the current competition for the Transformation Satellite (TSAT) program, and put off awarding a contract until the fourth quarter of fiscal 2010, said the source, who asked not to be identified.
The Air Force had hoped to award a contract for the new advanced military communications satellite program in December, after completing a thorough internal review, and “an independent scrub” by chief Pentagon arms buyer John Young.
Gary Payton, Air Force deputy undersecretary for space programs, told reporters last month that officials mounted the reviews to help avoid another major contract protest, but said they also needed to carefully evaluate the results of a new study of military satellite communications needs cash advance loan.
The TSAT program already suffered a 40 percent funding cut when the Bush administration announced its long term budget plans in February. Pentagon officials decided this weekend to scale down the program even further and postpone a scaled-down contract award for more than a year, said defense analyst Loren Thompson of the Virginia-based Lexington Institute.
“This program is sinking fast,” Thompson told Reuters on Sunday. He said the decision would have grave consequences for the military’s goal of offering soldiers on the battlefield access to satellite communications anytime soon.
The delayed award means the first TSAT satellite would not be launched until around 2019, raising serious questions about the ability of the U.S. Army to move ahead with its Future Combat Systems modernization program, which is meant to rely heavily on advanced satellite communications, Thompson said.
The industry source agreed the Pentagon decision “will clearly have implications for Future Combat Systems.”