Lockheed Martin won a contract worth up to $3.27 billion Friday to build a new communications satellite network for the U.S. military, using spacecraft that will be assembled at the firm's huge campus in Sunnyvale.
The satellites will allow soldiers in buildings or dense jungles to communicate with others across the globe and will connect helicopters in combat and ships at sea.
The system will replace an aging constellation of 10 military satellites that already provide similar but more limited services. The first of Lockheed's spacecraft should enter orbit in 2010.
"We're very proud and excited about this," said Leonard Kwiatkowski, vice president of military space systems for Lockheed. "We often hear soldiers and sailors complaining about not having the latest stuff. And here they will."
The initial contract, issued by the Navy's Space and Naval Warfare Systems Command, carries a $2.1 billion price tag and calls for two satellites. The contract may then be extended, up to a full cost of $3.27 billion, for a total of five satellites.
Although the new network will have half as many spacecraft as the system it replaces, each of the new satellites will be able to carry about 10 times as much traffic as its predecessors, said Steven Davis, media officer with the space warfare command.
Lockheed, based in Bethesda, Md., beat a competing bid from Raytheon Co. to win the contract. About 31 percent of the work will be performed at Lockheed's Sunnyvale plant, which employs roughly 7,000 people.
The Pentagon announced the award after the close of Wall Street's trading day. Lockheed stock rose 64 cents, or 1.18 percent, in after-hours trading, reaching $55.
As with most large-scale military contracts, Lockheed will work with a team of other defense contractors on the project, dubbed the Mobile User Objective System, or MUOS.
General Dynamics will supply the system's ground-based network segments. Boeing will provide the gear to make the new system compatible with the one it replaces. Harris Corp. will provide the MUOS spacecraft antennas.
Much of the system's technology and design has already been hammered out. Lockheed has been developing it for five years, Kwiatkowski said.
Although the full contract was just awarded, the military started working on the project in 1999, developing general concepts and designs with eight firms. The competition was narrowed to Lockheed and Raytheon to further refine the plans before Lockheed won the final contract.
When complete, it should provide soldiers across the globe with the same services Americans have come to expect from their cell phones, transmitting voice calls as well as data and pictures.
As a satellite-based service, it will be accessible even in remote locales. And the band of the communications spectrum it uses can transmit through buildings and trees.
"In other words, it's the most reliable system out there," Davis said.
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