DigitalGlobe Secures $250 Million, Optional Third Year on NGA EnhancedView

[Satellite TODAY Insider 06-19-12] DigitalGlobe will receive $250 million from the National Geospatial-Intelligence Agency (NGA) by exercising a service level agreement outlined in its EnhancedView contract for a third optional year beginning on Sept. 1, DigitalGlobe President and CEO Jeffrey Tarr confirmed in a June 18 statement.

   DigitalGlobe and its imagery sector rival GeoEye had won contracts worth $7 billion from the NGA to provide high-resolution satellite images under the EnhancedView project in 2010. TheNGA’s 10-year contract with DigitalGlobe provides $250 million each year for the first four years and $300 million each year for the last six years. The exercise on DigitalGlobe’s optional third year is subject to the terms of the EnhancedView contract.
   “We are delighted that NGA has recognized our focus on delivering performance and value,” Tarr said in the statement. “We remain fully committed to continuing to meet and exceed NGA’s exacting mission requirements.”
   In May, the U.S. Senate Armed Services Committee authorized additional funding to continue support for commercial imagery purchases from DigitalGlobe and GeoEye. The move allowed satellite imagery providers to double their capacity on next-generation satellite projects. Some analysts said the move also gave GeoEye an opening to make its $792.3 million acquisition offer to DigitalGlobe earlier in the month.
   DigitalGlobe eventually rejected the offer.
   Though the EnhancedView program is now funded through the remainder of 2012, Raymond James Analyst Chris Quilty said in a May 2 research note that the long-term outlook for EnhancedView remains up in the air, “pending the outcome of a White House directed study, congressional budget negotiations and quite possibly the November elections.”
   DigitalGlobe said the U.S. government’s 2013 fiscal budget could still contain rumored budget cuts, as the federal government plans to spend $71.8 billion on intelligence programs – a 9 percent drop from its fiscal 2011 budget.
   Tarr said the recent contract exercise has provided DigitalGlobe with confidence that the EnhancedView program will continue to expand throughout its designated 10-year timeframe. The company has listed openings for an undisclosed number of new positions in its EnhancedView business unit.

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