Raytheon [RTN] and Lockheed Martin [LMT] say they are on schedule to demonstrate their respective radar systems competing for the Air Force’s next contract for a new generation of space debris trackers.

The two firms confirmed last week they will demonstrate their baseline versions of Space Fence in December as called for in the preliminary design review (PDR) phase of the competition.

“We’re on track to meet the requirements of the contract well before the end of the year,” John Morse, Lockheed Martin’s director for Space Fence, said.

Scott Spence, Raytheon’s lead for Space Fence, said: “We’re on track to demonstrate a protégé array tracking a resident space object.”

The PDR phase is expected to wrap up early next year and the Air Force could select a winner as soon as August 2012.

All phases of the program are expected to cost up to $3.5 billion, according to budget documents, so a follow-on production contract could be worth upward of $3 billion (Defense Daily, Jan. 28). The Air Force plans to bring the system to operational capability by 2015.

Space Fence will be an S-band radar designed to cast a broad array to track space junk that could pose risks to satellites or human activity in orbit.

It will replace the decades-old Air Force Space Surveillance System. The Air Force wants Space Fence to increase the number of objects it can track from the current limit to 20,000 to 200,000 or more.

In recent years, the lower orbits around Earth have become much more congested, in part because so many more countries are active in space than in the 1960s. The problem was brought into focus with the 2009 collision of an Iridium communications satellite with a Russian spacecraft, and a June near miss of the International Space Station.

The growing concern was highlighted in a NASA-commissioned study conducted by the National Research Council and published last week that said the space junk problem was worsening and had reached a “tipping point.” It urged NASA to take greater steps to confront the challenge.