The Air Force and Lockheed Martin [LMT] remain in discussions regarding financial penalties for propulsion system malfunctions that prevented a new communications satellite from reaching its orbit last summer, a top Air Force official said this week.
Orbit-raising activities for the first Advanced Extremely High Frequency communications satellite (AEHF-1) are continuing according to plan, officials said. Shortly after the launch last August, the original plan was modified as a result of an anomaly with the bi-propellant propulsion system, which was supposed to place the spacecraft near its operational orbit about a month after launch.
In the mean time, talks with Lockheed Martin on punitive measures continue, according to the executive director of Air Force Space Command’s Space and Missile Systems Center.
“We are still finalizing those business arrangements,” Doug Loverro told reporters during a May 11 teleconference. “We are negotiating to decide how we will satisfy the needs of both parties.”
Loverro added that the Air Force is now “moving toward the [contractor] award fee to a much more objective incentive fee.” He noted that government auditors have “reported that they don’t believe that the [Defense Department] in general uses award fees very effectively” and that Space Command is anxious to change that incentive structure.
“We want the fees tied to cost performance, schedule performance and on-orbit performance,” he said.
AEHF-1 is expected to reach GEO this summer and vehicle checkout should be complete by January 2012, officials have said. The satellite is designed to provide the military and other government officials with protected, high capacity, high-speed communications. It is the successor to Milstar.
Prime contractor Lockheed Martin late last year received a cost-plus-incentive-fee contract modification valued at approximately $1.4 billion for production of the fourth AEHF space vehicle (Defense Daily, Dec. 10, 2010).
The Air Force is planning a new acquisition approach that would allow for the purchase of two AEHF satellites in fiscal 2012. The Pentagon requested $974 million for the AEHF program in FY’12 (Defense Daily, Feb. 15).