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Lockheed, Boeing competing for first-phase of $2 billion deal to upgrade military satellites

Lockheed, Boeing competing for first-phase of $2 billion deal to upgrade military satellites

Lockheed Martin Corp. and Boeing Co. are rival bidders for the first phase of a military contract worth up to $2 billion (euro1.46 billion) to build a next-generation global satellite system, the companies said Monday.
The Air Force is replacing 24 of 32 satellites in orbit to create a new system dubbed Global Positioning System III, designed to improve navigation by air, land and sea, and be more difficult for U.S. enemies to disable.
The first phase of the contract, according to the Air Force, is for eight satellites to be delivered by 2013. The deal will be awarded by year-end.
Although Lockheed and Boeing were both suppliers of the existing satellites, the Air Force is expected to select only one contractor team for the first phase of the deal. That winner will automatically be awarded the next two phases of the contract.
The second phase is for another eight satellites by 2016, and the third phase is for another 16 satellites by 2019.
Earlier this year, the Air Force decided to extend talks with both bidders to make sure their proposals met requirements and that each company could upgrade the system for each phase.
However, the Air Force is splitting the contract for the first time into satellite and ground segments to avoid schedule delays.
The ground segment deal, worth $160 million (euro117 million), was expected to be awarded this month but has been delayed until October, according to the Air Force.
Bethesda, Maryland-based Lockheed Martin with a team that includes General Dynamics Corp. and ITT Corp. submitted its bid on Friday, said Steve Tatum, a Lockheed spokesman.
Boeing declined to disclose its team members.