WASHINGTON — Military satellites acquired under fixed-price contracts get high praise in a report submitted to Congress by the Department of the Air Force.
Two Space Force satellite programs — the Global Positioning System Follow-on (GPS 3F) and the Weather System Follow-on (WSF) — were identified within the report as “high performing,” partially because they were acquired under fixed-price contracts.
Space Force procurement chief Frank Calvelli has advocated using fixed-price contracts for virtually all satellite procurements. He has been critical of traditional military “cost plus” acquisitions where the federal government reimburses the entire costs related to a project, plus a negotiated profit fee.
“The GPS 3F program used a fixed-price incentive fee contract with incentives for meeting schedule targets,” Calvelli wrote within the report, the contents of which were first published May 31 by .
Calvelli, who’s assistant secretary of the Air Force for space acquisition and integration, is required by the 2022 National Defense Authorization Act to submit an annual assessment of space acquisition programs. The February 2023 report includes an inventory of the highest five and the worst five performing programs, based on criteria “consistent with best acquisition practices.”
The GPS 3F program is one in all the Space Force’s largest satellite procurements. As much as 22 satellites are being produced by Lockheed Martin under a 2018 agreement price $7.2 billion.
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Within the report, Cavelli said the contract included “pre-priced options leveraging economies of scale, reducing unit costs by roughly $100 million per satellite when purchasing a couple of satellite at a time.”
On the Weather System Follow-on (WSF), the report said it “met cost and schedule baselines through constructing upon previous flight-proven designs, leveraging long-standing civil and international partnerships, and negotiating a firm fixed price contract with a proven vendor.”
The Space Force has bought two WSF microwave sensing satellites from Ball Aerospace, each estimated to cost about $500 million.
The opposite three programs Calvelli identified as high performing are the Enhanced Polar System recapitalization (EPS-R), the National Security Space Launch (NSSL) Phase 2 and the Space Based Infrared System Block Buy (SBIRS GEO 5-6).
Lowest performing programs
The five lowest performers include long-troubled programs that for years have been flagged by the Government Accountability Office and other watchdogs for schedule setbacks and value overruns.
The GPS Next-Generation Operational Control System (OCX) program “has experienced quite a few cost overruns and schedule delays against its original program baseline,” the report said. “The underlying causes of poor performance are the contractor’s incomplete understanding of the tull scope of stringent cybersecurity requirements, and the federal government’s deficiency in effectively communicating these requirements upfront.”
The Space Command and Control (Space C2) program — intended to exchange the aging Space Defense Operations Center (SPADOC) — “has not met its schedule commitment to deliver a brand new Space Domain Awareness C2 capability that permits for the decommissioning of the SPADOC legacy system.”
The poor performance, the report said, is on account of “resources not being aligned to priorities, lack of sufficient systems engineering expertise, lack of know-how of external dependencies impacting development, and poorly defined relationships with user and test communities.
The Space Force has implemented “corrective actions” and has begun delivery of the Advanced Tracking and Launch Evaluation System (ATLAS) program to exchange SPADOC.
The Family of Advanced Beyond Line-of-sight Terminals (FAB-T) for secure satellite communications have experienced “over a decade of schedule delays against the unique schedule,” the report said. The Space Force is working to handle “obsolescence issues and platform specific requirements.”
The GPS receivers generally known as Military GPS User Equipment Increment 1 program “have experienced cost overruns and schedule delays” on account of software development setbacks, said the report. This system is being restructured from cost-plus to firm-fixed-price to “levy more cost growth accountability on the contractor.”
The Enterprise Ground Services (EGS) — a ground systems architecture intended to exchange legacy ground stations for military satellites — last yr was identified by the Space Force as problematic.
Calvelli’s report said this system suffers from “unstable definitions of responsibilities between EGS and mission partners … and insufficient resources to support multiple mission partners concurrently.”
The Space Force is options to restructure this system or seek a industrial provider that may more efficiently deliver those services.