Filed under: Business Line, Companies, Department of Defense, development program, Events, missile defense, NASA, Orbital Systems, production program, Satellites, Seeking Alpha, Services, space
This is an exclusive article I wrote at Seeking Alpha on Orbital Sciences. It may be found here.
Filed under: Business Line, Companies, Contract Additions, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, logistics, MDA, missile defense, Orbital Systems, S&T, Services
The United States has been working on missile defense programs for decades. Starting with the boost provided by Ronald Reagan with “Star Wars” in the Eighties and the impetus provided by Iraqi SCUD attacks in Desert Storm the Missile Defense Agency (MDA) has led the development and deployment of several different systems. These all require testing to prove their capabilities and to make sure they meet requirements.
Since the basic goal of missile defense programs is to hit and destroy an enemy ballistic missile MDA has required the use of targets that simulate potential threats as well as just provide a basic ballistic trajectory. Orbital Sciences Corp (ORB) has been one of the major providers of these target systems over the last twenty or more years.
Orbital will continue this support to MDA with the award of a contract to provide targets mimicking intermediate range ballistic missiles (IRBM) threats. The first year of the contract is worth a little over $200 million and if all options are exercised it could be worth just over a billion.
Orbital will not only provide the targets but also support them with logistics, support equipment and other necessary services. Most missile defense testing takes place either at the Navy’s test range in Hawaii or at White Sands Missile Range in New Mexico.
This contract illustrates why missile defense development is so expensive. The targets are used once and are rather sophisticated as they need to be threat representative. The ranges of the systems involved require testing in remote sites that only ads to the costs of the actual test. The interceptors themselves cost even more and they are also consumed during the test meaning that if there is a failure the test must be repeated which adds schedule and cost to the program.
U.S. Navy photo from DIVIDSHUB flickr photostream.
Filed under: Business Line, Companies, Congress, Contract Awards, Department of Defense, development program, Events, Federal Budget Process, Florida, logistics, NASA, Orbital Systems, Restructuring, S&T, Satellites, Services, space, States, U.S. Air Force
The State of Florida charted an entity called Space Florida to help grow their support to the space and aerospace industry using it to manage existing facilities located at Cape Canaveral and other sites. Set up in 2006 it combined three previous organizations related to space development and research into one. Space Florida operates a facility to assemble rockets and support launches at the Kennedy Space Center. This is part of a readjustment to the reorganization of NASA priorities that will see the last flight of the Space Shuttle in the near future.
As part of their work the U.S. Air Force issued Space Florida an ID/IQ contract to support launches of Orbital Sciences (OSC) Minotaur launch vehicles. This contract has a value of up to $48 million if all options are exercised. As with all ID/IQ contracts there is no guarantee that any work may be issued or ordered.
The Minotaur is a combination of existing ICBM rocket motors and other hardware used by the Air Force to launch small-to-medium payloads into orbit. It also is used to support testing and may carry targets and other systems. So far there have been eighteen launches of the system with thirty-one payloads placed in orbit.
The U.S. is moving to try and generate more commercial programs to provide access to space. The focus is on small companies developing new technologies or providing support services like this rather then relying on the large Defense and NASA infrastructure. This is not happening without pain as there will be significant job losses as the Florida economy adjusts to the end of the Space Shuttle with no near term U.S. replacement for heavy lift launch capability.
NASA had been developing the Ares and Orion systems to replace the Space Shuttle and support the International Space Station (ISS) as well as plan for longer missions in space but the Obama Administration restructured the program severely. This included ending work on most of the program and shifting funds to commercial companies trying to develop launch vehicles such as SpaceX.
It is too early to tell how well this strategy will work but right now the U.S. will soon be dependent on Russian systems to carry crew and supplies to the ISS until it develops the replacement for the Space Shuttle.
Photo by Nick Davis of the launch of Space Shuttle Discovery.
Filed under: Business Line, Companies, Contract Awards, development program, Events, Orbital Systems, S&T, Satellites, Services, space, U.S. Navy
The U.S. Navy’s Research Laboratory (NRL) awarded a contract to Orbital Systems (ORB) to provide technical and support services. If all options are exercised the contract could be worth up to $95 million. Orbital has provided this kind of support in the past on previous contracts and is very qualified to develop small satellites and space launch vehicles.
Orbital will provide the NRL with research, analysis, integration and testing support as well as data collection and analysis. The work is similar to that done by the company for other parts of the U.S. government including NASA and the Air Force.
Filed under: Boeing, Business Line, Companies, Department of Defense, development program, Earnings, Events, Federal Budget Process, IT, logistics, Military Aviation, missile defense, Orbital Systems, production program, S&T, SAIC, Satellites, Services, space
Due to some restructuring of its work due to the Obama Administration’s efforts to reorient defense spending Orbital Sciences Corporation reported a downturn in revenue and operating income in its most recent quarterly results. The company saw a missile defense contract ended and some delays in satellite work leading it to reduce its estimates for the full year.
Of the major defense companies reporting so far results have been mixed. Some have seen better quarters then others. The effects of the major changes planned by Obama and Secretary of Defense Gates may take some months to have effect. The large programs they have ended will still be paying termination costs to the companies as they figure out what fees are needed and what work will be paid for. There are also chances that new contracts will be awarded in the next year or so.
Several programs will be continued in another form it may take two or three years for the next iteration to start. The Army’s Future Combat System (FCS) contract with Boeing and SAIC ended but the technology and work has been inserted into a new program. The contracts for the new program have not been fully awarded, so Boeing and SAIC may end of with revenue from that effort. In the end despite the cancellation the companies may not end up losing much revenue.
Filed under: Boeing, Business Line, Companies, Congress, Department of Defense, development program, EADS, Events, Federal Budget Process, MDA, missile defense, Northrop Grumman Corp., Orbital Systems, Restructuring, Services, space
Orbital Sciences stock took a pounding last week as one of its major programs was proposed to be canceled by Obama and Secretary of Defense Gates. Missile defense programs along with the F-22 and FCS wheeled vehicles took the biggest in the budget. If the budget moves forward with the planned ending of major programs other companies may see their stock affected.
The upside though is that if the restructuring of the budget goes forward it will provide opportunities for other companies. There will also be new programs eventually as the need for some of these — like the VH-71 — are still there. The next big contract that seems will be awarded is the KC-X tanker replacement some time next year. A new competition will be held between EADS and Boeing. Currently it looks like the award won’t be split as some had hoped for.
Filed under: development program, Earnings, Orbital Systems, S&T, Satellites, space
Orbital reported their third quarter results today. Revenues were up slightly while earnings were down. The company did report strong bookings and their back log is significant at over $2 B. The company saw increased activity in the launch vehicle and advanced space programs. There was a decline in satellites and space services. Orbital provides a variety of space related services to US DoD, Department of Energy and NASA.
See the full press release at MarketWatch.com.
Filed under: Contract Awards, Department of Defense, development program, missile defense, Orbital Systems, SETA
Orbital won a contract to provide engineering and analytical services to all three US armed services at White Sands Missile Range (WSMR). They are also part of a team supporting efforts at Wallops Range in Virginia which is used a great deal by NASA. See the story here. The contract, called Theoretical Studies and Engineering Services (TSER), will support all developmental activities at WSMR. This range is used to support air and ballistic missile defense tests.
Filed under: DARPA, development program, Orbital Systems, Satellites, space
Orbital Systems won a contract from DARPA for research with the F6 satellite program. See the press release here. DARPA is trying to develop, through this program, a more flexible way of linking modules of space craft to allow greater flexibility in their configuration.