U.S. government satellite programs saw massive cost overruns and schedule delays over the past decade, but Air Force officials have launched a variety of initiatives to reduce the cost of building and launching satellites.
Those efforts include buying more than one satellite at a time; work on smaller, cheaper satellites; and a shift to more fixed-price contracts that reduce the government’s liability for cost overruns.
Shelton said the third and fourth satellites built by Lockheed Martin Corp for the Space Based Infrared System (SBIRS), which is designed to provide early warning of missile launches, were running over budget but not as badly as the $438 million cost overrun initially estimated by the Pentagon.
“The signs are positive right now that the reported cost overrun is not going to be near as significant,” Shelton said. “But we’re not out of the woods yet because we’ve had some challenges with subvendors.”
Shelton blamed the higher costs on problems including a cracked “harness” that was discovered well into production and a variety of other issues.
He said Lockheed’s Global Positioning System satellites remained over budget, but costs had stabilized and risen just 7 percent this year, after rising 15 percent, or $70 million, a year earlier.