Air Forces Seeks to Double Boeing Deal

An Air Force proposal to upgrade the military’s global positioning satellite system would be worth about $1 billion to Boeing Co., more than double the company’s original contract, a program official said Wednesday.

Under the new plan Boeing would build 12 satellites and upgrade the GPS ground control network used by the military to direct aircraft, ships, ground troops and precision-guided weapons.

The order will provide work for employees of Boeing’s Space & Communications unit in Seal Beach through 2007, while launch preparations will continue through 2009. Work on the ground control system will continue through 2012.

In the short term the proposal would substantially increase Boeing’s revenue from the GPS program, although the company would face a bidding war for rights to build any more satellites beyond the 12, Col. Douglas Loverro, director of the Air Force’s Navstar GPS program, said in an interview.

The new proposal is a result of the Air Force’s decision to upgrade the constellation of global positioning satellites that emit encrypted signals used by the military to guide airplanes, ships and troops and direct smart weapons with near-pinpoint accuracy.

Boeing’s original contract, won in 1996, called for the company to build six GPS satellites and build and operate a ground control system for the entire GPS network for about $420 million. Under the agreement, the Air Force held options for another 27 satellites.

News that the Air Force would not exercise options on the original Boeing project caught the company by surprise. A top official said Wednesday, however, that the plan appears to be turning out well.

The new proposal increases Boeing’s satellite order to 12 and offers more money to upgrade the ground control system still under development.