Lockheed Martin [LMT] and Raytheon [RTN] recently completed the first launch readiness exercise for the Air Force’s next generation Global Positioning System (GPS) III satellites, according to a Lockheed Martin statement.

Lockheed Martin said the successful completion of the exercise is a key milestone demonstrating the team remains on schedule to achieve launch availability in 2014. The exercise, completed over a three-day period on Aug. 24 by mission operations personnel, validated the basic satellite command and control (C2) functions, tested the software and hardware interfaces and demonstrated basic on-console procedures required for space vehicle contacts during the launch and early orbit mission.

The event sets the stage for the first GPS III satellite’s mission readiness timeline, which includes five short-duration exercises and six, five-day mission rehearsals leading up to launch.

Lockheed Martin will also deliver the propulsion core structure for the first GPS III satellite to its GPS processing facility in Denver this month, according to company spokesman Michael Friedman. This milestone will represent the first completed subsystem for GPS III Space Vehicle One, which started assembly, integration and testing in May.

The Lockheed Martin-built GPS III satellites and the Raytheon-developed next generation GPS operational control system, known as OCX, are critical elements of the Air Force’s effort to affordably replace aging GPS satellites while improving capability to meet the evolving demands of military, commercial and civilian users worldwide. Lockheed Martin said this is the first space and ground enterprise built by two independent prime contractors–one building the ground control and one building the space vehicles.

To achieve first launch availability in the 2014 timeframe, the Air Force awarded Lockheed Martin and Raytheon contracts in January to provide a Launch and Checkout Capability (LCC) for launch and early on-orbit testing of all GPS III satellites. At the heart of the LCC is Raytheon’s Launch and Checkout System that will provide satellite C2 capability, an integral part of OCX’s support of the first GPS III launch.

The Lockheed Martin-led team developing the GPS III satellites completed a major integration and test event on the program’s satellite pathfinder earlier this summer by powering it with major elements of its navigation payload, such as advanced atomic clocks and the Mission Data Unit. The satellite pathfinder is known as GPS III Non-Flight Satellite Testbed (GNST).

Lockheed Martin is currently under contract to build four GPS III satellites. The Air Force’s contract with Lockheed Martin contains options for total production of 12 GPS III satellites. Lockheed Martin Vice President for Navigation Systems Keoki Jackson said earlier this summer the company was working with the service to convert those remaining satellites to fixed-price contracts.

Lockheed Martin is the prime contractor for the GPS III satellite system with ITT Exelis [XLS], General Dynamics [GD], Infinity Systems Engineering, Honeywell [HON] and ATK [ATK] as subcontractors. Raytheon is the prime contractor for OCX.