Air Force, Northrop see progress on space

By Andrea Shalal-Esa

WASHINGTON (Reuters) - Two U.S. military space programs run by Northrop Grumman Corp. (NOC.N: Quote, Profile, Research, Stock Buzz) and Lockheed Martin Corp. (LMT.N: Quote, Profile, Research, Stock Buzz) are recovering well from years of cost overruns and schedule delays, but must still be monitored closely, a top U.S. Air Force weapons buyer said on Monday.

"We feel very confident that we've turned the corner" on the two programs that narrowly escaped cancellation last year, Ken Miller, a special assistant to Air Force Secretary Michael Wynne, told the Reuters Aerospace & Defense Summit.

"You have to stay on top of this stuff. I'm not saying we're out of jail yet, but we continue to make progress," Miller said, before addressing a meeting of top U.S. military space acquisition officials meeting in Washington.

His comments were echoed by James Pitts, president of Northrop's Electronic Systems unit, another speaker at the summit, who said problems with his company's work as a key subcontractor on the $10.6-billion Space Based Infrared System (SBIRS) program, run by Lockheed, had been overcome.

"We've come a long way," Pitts said, noting that Air Force officials last month lauded data being transmitted by the first SBIRS sensor, which is aboard a classified satellite rotating the Earth in highly elliptical orbit.

Top Pentagon weapons buyer Kenneth Krieg last month reviewed the SBIRS program and Northrop's $9-billion National Polar-Orbiting Operational Environmental Satellite System, giving both programs good marks, Miller said.

Both programs faced congressionally mandated viability reviews last years in the wake of massive cost overruns, but Miller said no programs were in similar danger now.

Pitts conceded that restructuring both programs ate up a lot of company energy and resources, but said the "risk level on those programs is shrinking."

That meant Northrop could turn its attention to development of new innovative systems, including some in the classified arena, and focus on strategic plans for the space sector.

"Space is going to be a growth area for us," Pitts said, noting that his company was aggressively pursuing new space projects in the classified area as well.

Miller said a third program, Space Radar, a $20-billion-plus satellite program to track moving targets from space, remained in danger of big budget cuts.

The Air Force had asked the intelligence community to contribute half the required funding for the program, but intelligence officials have refused the request.

"There's still some debate on that," Miller said, noting officials were due to discuss the program again on Monday.

He said the program's future could also be affected by the recent resignation of the Defense Department's top intelligence official, Stephen Cambone, and the nomination of Robert Gates, a former CIA director, to head the Pentagon.

Lockheed and Northrop have been competing to build Space Radar. Northrop is supplying the radar for both teams, Pitts said, noting that Northrop had proven that it was technically possible and affordable to put an active array radar in space.

"We've made a lot of progress in reducing the risk," Pitts said, although he conceded that the program could well wind up being a technology program rather than a full-blown production program. "I think it will survive, but it may get stretched out. I don't see more money being put into it," he said.