Winning TSAT Contract Key To Maintaining Market Niche

A new generation of military communications satellites, called "TSAT," could have as big an effect on communications as global positioning satellites had on navigation, and winning the contract for the project is crucial to maintaining Boeing’s position as a leading satellite manufacturer.

Boeing is bidding against the team of Lockheed Martin and Northrop Grumman for new "transformational" satellites in a contract potentially worth more than $15 billion.

Loren Thompson, a defense policy analyst with the Arlington VA Lexington Institute said, "Boeing has its back to the wall. If it doesn’t win the contract, it will have real difficulty sustaining the work force" at Boeing’s satellite-making complex in El Segundo.

With declining demand for commercial satellites adding to its woes, Boeing "really needs to win TSAT to keep its design and engineering staff intact," Thompson said.

With an initial value of $6.6 billion, the contract is a "must win" for Boeing, which has been hurt by sagging sales of commercial satellites and production problems, the Los Angeles Times said.

With the launch of the first of five satellites slated for 2018, TSAT would enable Pentagon strategists, field commanders, and soldiers on a battlefield to view the same video images of an enemy, taken and transmitted by an unmanned spy plane.

Comparisons liken Milstar, the current military satellite communications system, to a dial-up modem; TSAT with 100 times more bandwidth, is a high-speed Internet in the sky, complete with sophisticated anti-jamming and security technology.

A decade ago, Boeing was the world’s largest satellite maker, the Times said. Its work force of nearly 10,000 employees at its complex near Los Angeles International Airport has dwindled to about half that number, due to slumping sales of commercial satellites and lost contracts.

Last year, the Pentagon took a portion of a secret, multibillion-dollar spy satellite program from Boeing and awarded it to Lockheed. This year, Lockheed beat out Boeing for a $3.5 billion US Air Force contract to build a new generation of global positioning satellites.

Potentially affecting the nation’s future military space programs, the loss could "weaken Boeing’s ability to compete and leave Lockheed as the dominant developer of military satellites for the next decade or more," analysts and industry officials said.

"I can’t think of anything bigger" in terms of a satellite competition, said Craig Cooning, general manager of Boeing’s Space and Intelligence Systems unit. "If we don’t win, it will be a tougher situation for us."

The Boeing TSAT team includes Raytheon, Ball Aerospace, General Dynamics, Cisco Systems, IBM, L-3 Communications, BBN Technologies, Hughes Network Systems, Lucent Technologies, Harris, EMS Technologies, and Alpha Informatics.

FMI: www.boeing.com