Lockheed gets NASA space pact Privitization contract valued at $3 billion includes AlliedSignal

Landmark 10-year deal

Team of companies will manage most unmanned spacecraft

Aerospace

September 26, 1998|By Greg Schneider | Greg Schneider,SUN STAFF

NASA stuck with the tried-and-true yesterday in awarding a landmark space privatization contract to a team led by Lockheed Martin Corp. and featuring AlliedSignal Technical Services Corp. Columbia.

The Consolidated Space Operations Contract, known as CSOC, is valued at more than $3 billion over the next 10 years and is intended as a turning point in the way the space agency does business.

The winning team of companies, which features more than three dozen subcontractors, will take over management of most of NASA's unmanned spacecraft. They will maintain the data and communications network that links satellites and scientists around the globe.

"CSOC is all about the future," said Jay Honeycutt, president and program manager for Lockheed Martin Space Operations Co. "By reducing the cost of space operations, the team will save NASA funding that can be used for new research initiatives."

The Bethesda-based corporation beat out a team led by Seattle's Boeing Co. for the contract.

AlliedSignal Technical Service's portion of the work could amount to $1 billion, the company said yesterday. Losing the contract would have been a huge blow to the Columbia facility, which has performed satellite tracking work at Goddard Space Flight Center since the 1950s. About 1,700 of its 5,500 employees now work at Goddard.

"This will make everyone rest easier up at AlliedSignal," said Brett Lambert, an aerospace expert with the DFI International consulting firm in Washington.

Winning solidifies the company's position with NASA for the foreseeable future and offers the chance for expansion, as AlliedSignal's engineers will provide mission support at four more NASA locations, including the Johnson and Kennedy space centers.

"AlliedSignal is proud to begin a new chapter as NASA's preeminent provider of satellite flight control and data management for the nation's earth-orbiting spacecraft and deep space probes," said Ivan Stern, president and chairman of AlliedSignal Technical Services.

NASA administrator Daniel S. Goldin hatched CSOC as a way to make satellite operations cheaper by consolidating contracts and facilities, and to free up NASA from management duties to concentrate on science.

Military and spy agencies are also watching NASA's experiment, and if they like what they see, could privatize a far larger satellite network in the next few years. Experts have said the winner of CSOC should have the inside track on that even more lucrative job.

That prospect is partly why the CSOC competition pitted the nation's two top aerospace companies in Lockheed Martin and Boeing.

The choice they offered the space agency was clear: Lockheed Martin represented tradition, with its team including companies such as AlliedSignal and Computer Sciences Corp. that already perform such work for NASA.

Boeing, by contrast, tried to make up for lack of experience with innovation. Its proposal included more emphasis on using commercial means such as the Internet to distribute data, and analysts said that it might have offered greater possible cost savings than the Lockheed Martin approach.

But Boeing's flashy grab for the contract also apparently carried more risk. NASA had planned to announce the CSOC winner on July 1, but delayed the award several times as it appealed to Boeing for further explanations of its proposal.

In the end, an agency steeped in risk with every space shot opted for the safer route.

"NASA is not in a position to have additional risky programs," analyst Lambert said.

The win for Lockheed Martin comes less than a week after the company announced plans to buy Comsat Corp. for about $2.7 billion to create a new satellite communications powerhouse. Lambert said the combination of that deal and the CSOC contract "really makes Lockheed Martin the preeminent player for government communication and space services."

Pub Date: 9/26/98

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