DoD and DNI Battle Over Billions

Very quietly and out of sight of almost everyone but the actual players, the Director of National Intelligence's office and the Pentagon's head of acquisition are battling for the soul of the next-generation of reconnaissance satellites. A decision on this is likely this week, we understand. A draft "Statement of Guidance" is circulating, but it is classified so we cannot tell you what is in it.

The outcome of this struggle may well reshape the relationships between the military and the intelligence community, since the power to determine requirements largely determines what will be bought and how much it will cost - not to mention which company will most benefit.

In addition to the high intensity-low visibility battle between the intelligence community and the military, the future of two companies may depend on the decision: DigitalGlobe and GeoEye.

GeoEye plans an August launch of its high resolution reconnaissance satellite, GeoEye 1, which will be able to provide commercial customers and the national security establishment with better than half-meter resolution in full color. DigitalGlobe plans a launch of its WorldView2 satellite in late 2009.

Both companies need customers for the imagery. If they don't lock in the federal government as a major customer they may find it difficult to convince investors that they should stick with them. And both are spending substantial amounts of money to build these new satellites. And they haven't launched or deployed yet.

Lockheed Martin wants to build what has been termed the "exquisite" solution to this requirement and is reportedly pushing this. However, we understand from a senior intelligence source that Lockheed is unlikely to get this business in the next two to three years.

Let's look at where the major government players in this drama stand. The DNI's director of acquisition, Al Munson, reportedly wants GeoEye to get a contract for providing imagery. But he is being challenged and countered by Don Kerr, principal deputy director of National Intelligence. Kerr, whose last job was running the National Reconnaissance Office, wants to buy -- not lease -- the satellites to do this kind of work...

Read the rest of this story on Military.com's Warfighter's Forum page.

-- Colin Clark

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