GPS Ground Stations Running Late Put Raytheon's Role at Risk

  • Pentagon weighs alternatives after costs more than doubled
  • Raytheon says program is now `on a strong foundation'

Raytheon Co. risks being replaced as prime contractor for new ground stations to communicate with the U.S. Air Force’s GPS satellites because the project’s cost has more than doubled and its delivery date has slipped, according to Pentagon officials.

Officials “have been examining alternative paths” to develop the network of 20 ground stations worldwide, Maureen Schumann, spokeswoman for Defense Department acquisition chief Frank Kendall, said in a statement.

The Global Positioning System developed by the U.S. military has become ubiquitous, providing turn-by-turn directions on the smartphones of drivers and hikers as well as coordinates for bombs hitting Islamic State targets in Syria and Iraq. New GPS III satellites -- and the ground stations to work with them -- promise increased accuracy for navigation, a signal compatible with similar European satellites and improved resistance against jamming.

Raytheon won the ground-station contract in 2010 over Northrop Grumman Corp. for what was supposed to be an $886 million project to be finished next year. Instead, it’s now projected to cost an additional $1 billion and take four more years to complete, Senate Armed Services Committee Chairman John McCain said in a report scheduled for release on Friday.

‘Fundamental Weaknesses’

“Poor contractor performance and fundamental weaknesses in DoD acquisition and software development practices now threaten the delivery” of the new stations known as OCX, said McCain, an Arizona Republican, in one of his “America’s Most Wasteful” reports on inefficient defense spending.

Kendall, the under secretary for acquisition, has scheduled a review in December to assess how well the contractor and Air Force are doing at correcting flaws in the project, according to an internal Air Force document. The review will “determine if recent actions have checked negative trends,” Schumann said in the e-mailed statement.

Continuing “negative cost and schedule trends are the central reason for” the review, Schumann said.

Raytheon spokesman Kevin Ramundo said in an e-mail said that “despite past challenges,” the program “is on a strong foundation” and “nearly all of the corrective actions identified by Raytheon, the Air Force, and in independent reviews have been implemented.”

“While we understand that the Air Force is reviewing options,” Ramundo said, the company “believes the fastest and most economical path forward to a fully capable and cyberhardened ground control system” that meets full modernization requirements “is to continue with the existing” program and “to allow the investments that have been made in implementing the corrective actions to be realized.”

‘Masked Overruns’

An Air Force report on the ground stations in September found the service’s “program schedule was unrealistic” when the contract was awarded, but it also said Raytheon “masked overruns” and created a backlog of engineering-change proposals.

The Air Force’s current $1.9 billion cost estimate is being revised for the December review and “it’s not going down,” Lieutenant General Arnold Bunch, the service’s top uniformed acquisition official, said in an interview. The network’s deployment schedule is also slipping further, he said.

The ground stations are needed to take full advantage of GPS III satellites being built by Lockheed Martin Corp., the first of which is 28 months behind its original delivery date. Citing the delay and rising costs, Bunch said this month that the Air Force also may hold a competition for the next batch of satellites.

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