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U.S. Air Force Sets the Stage for a GPS Satellite Building Contest

The U.S. Air Force has set the stage for a three-way contest to build its GPS 3 satellites, giving rivals Boeing and Northrop Grumman a chance to wrest work worth billions of dollars away from Lockheed Martin.

The military on Friday awarded GPS 3 production assessment contracts, worth up to $6 million apiece, to all three firms, with the aim of choosing one company to build up to 22 next-generation Global Positioning System satellites.

“Industry told us they were ready to compete for the GPS 3 space vehicles. We look forward to working with Boeing, Lockheed Martin and Northrop Grumman to assess the feasibility of a follow-on, competitive production contract,” Lieutenant General Samuel Greaves, who heads the Air Force’s Space and Missile Systems Center, said in a statement.

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Lockheed took over the GPS manufacturing work from Boeing in 2008 and is currently building the first eight GPS 3 satellites in a planned network of 32. Negotiations for two more satellites from Lockheed are expected to begin this summer.

The program, however, is more than two years behind schedule, primarily due to problems with the satellite’s navigation payload, developed by Exelis, which is now owned by Harris. The first GPS 3 satellite is now scheduled for launch in 2017.

The delay has increased the cost of the first eight satellites from $4.1 billion to $4.4 billion, according to a March 2014 Government Accountability Office report. It also prompted the Air Force to ask industry to consider developing competing designs.

With the production assessment contract, “we intend to demonstrate how our design for GPS 3 can evolve to address the Air Force’s future needs and incorporate new technologies as they become available in a low risk manner,” Lockheed spokesman Chip Eschenfelder, wrote in an email to Reuters on Tuesday.

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The production demonstration contracts run up to 38 months, after which the Air Force would select one company to build up to 22 more GPS 3 satellites.

In addition to providing navigation and timing services to the U.S. military, civilian and commercial users, the new GPS 3 satellites will have a redesigned nuclear detonation detection system, a search-and-rescue signal and other upgrades.