Lockheed wins $1.9 bln contract for two US satellites - Pentagon

Fri Dec 28, 2012 7:38pm EST
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* AEHF satellites enable advanced military communications

* Company focused on cutting costs

* Agreement safeguards funds against budget cuts due in January

WASHINGTON, Dec 28 (Reuters) - Lockheed Martin Corp has won a contract valued at $1.9 billion to build two additional advanced military communications satellites for the U.S. Air Force, the Pentagon said on Friday.

The contract, which runs through January 2022, covers production of the fifth and sixth satellites in the Advanced Extremely High Frequency satellite program.

Lockheed welcomed the contract, saying it underscored the government's confidence in the company's work on the program.

"As protected and resilient satellite communications become increasingly vital to global security, the AEHF program has developed into an indispensable element of the nation's military space architecture," said Mark Calassa, vice president of Lockheed Martin's Protected Communications mission area.

He said the first two satellites were operating exceptionally in orbit, and the company was implementing several affordability initiatives together with the Air Force that were already reducing program costs.

The terms of the contract had been switched from cost-plus to fixed-price, with an incentive fee, which allowed the government to limit its risk, Calassa said in a statement.   Continued...