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$400M Overrun For AEHF; OSD Rushes Cost Review

The Pentagon is rushing to wrap up the Nunn-McCurdy review of the Advanced Extremely High Frequency communications satellite by the end of the year.

They are rushing because the military hopes to issue a contract for another bird, the Transformational Satellite (T-Sat) about that time. Since the Nunn-McCurdy process requires the military consider whether there is a national security need for the satellite program or whether other capabilities can do the job.

Program costs have soared more than 25 percent over the official cost estimate. Total unit cost growth is around 110% and the total program cost is up to about $2.2 billion, according to a Pentagon source. That means there's been a program cost increase of roughly $400 million, not including the added costs of a fourth satellite, which was required by Congress in spite of Air Force opposition.

The review is being led by Josh Hartman, director of space and intelligence capabilities. Hartman reports directly to John Young, undersecretary of defense for acquisition, technology and logistics. Hartman and his team will have to weigh the benefits and costs of the last AEHF and the first T-Sat. The balance or tradeoff between the least AEHF satellite and the first T-Sat has been one of the complex issues that Air Force Space Command has been grappling with, as Air Force Gen. Robert Kehler told reporters Tuesday. I asked him Tuesday if his command had decided yet whether the first T-Sat would look a lot like a fifth AEHF or would really be a revolutionary satellite providing communications on the move through an enormous bandwidth pipe. He was honest -- as always -- and said he just didn't know yet.

Boeing and Lockheed Martin are competing for the T-Sat contract award. Lockheed builds AEHF. Lockheed is watching this one like a hawk, in part because it stands to gain both ways. For its part, Boeing would dearly love to continue the successes it's had with Wideband Global SATCOM communications satellites.

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