Lockheed, Boeing compete in $2b US military satellite deal

Lockheed Martin and Boeing are rival bidders for the first phase of a military contract worth up to $2 billion to build a next-generation global satellite system, an Associated Press report said.

The Associated Press report said the US Air Force is replacing 24 of 32 satellites in orbit to create a new system dubbed Global Positioning System III, designed to improve navigation by air, land and sea, and be more difficult for US enemies to disable.

The first phase of the contract, according to the US Air Force, is for eight satellites to be delivered by 2013, the report said. The deal will be awarded by year-end, it added.

The Associated Press report said although Lockheed and Boeing were both suppliers of the existing satellites, the US Air Force is expected to select only one contractor team for the first phase of the deal. That winner will automatically be awarded the next two phases of the contract.

The second phase is for another eight satellites by 2016, and the third phase is for another 16 satellites by 2019, the report said.

Earlier this year, the US Air Force decided to extend talks with both bidders to make sure their proposals met requirements and that each company could upgrade the system for each phase.

However, the US Air Force is splitting the contract for the first time into satellite and ground segments to avoid schedule delays, the report further said.