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Lockheed Aims For $8 Billion Or More NASA Contracts; Keen On Overseas Partners

By | August 28, 2006

      Lockheed Martin Corp. [LMT] is poised to compete for some $8 billion or more annually in work that NASA will award in coming years, including the Crew Exploration Vehicle (CEV) program, company space business leaders said.

      On the upcoming CEV contract award, Lockheed Martin faces competition from a team of Northrop Grumman Corp. [NOC] as the prime contractor and The Boeing Co. [BA] as the main partner.

      While NASA faces tight budget constraints, there is adequate money to press forward with a vision of space exploration that would include the first voyages beyond low Earth orbit in many years, according to John C. Karas, Lockheed vice president for space exploration.

      “It’s going to be a challenging budget,” Karas said. But “we think there’s [sufficient] money in there to continue the programs.”

      As that move to journey beyond low Earth orbit takes shape, there could be rich opportunities for Lockheed, a maker of major payload lifters, he observed. “When we go back to the moon, most of the money is in lift,” he said.

      Previously, some space programs have been marred by cost overruns and schedule deadlines missed, and NASA Administrator Michael Griffin said that can’t be permitted to continue in a time of tight budgets, where every dollar counts.

      That drew agreement from James H. Crocker, Lockheed vice president for civil space programs.

      Three factors are vital if costs are to be contained, Crocker said: there must be good execution of programs by contractors, with costs controlled. Meanwhile, NASA must stabilize its requirements, and not frequently change its criteria for programs. Finally, the federal government needs to supply stable and predictable funding for space programs.

      Otherwise, the net result can be soaring prices for programs, he said.

      For example, Crocker said, if $1 is cut from the NASA budget, and a program therefore suffers delays or distortions, the ultimate cost of getting the program back on track in later years may be $2 or even $3, more than eliminating any savings.

      “If any one of those goes out of balance or control,” it can create a long-term fiscal bind, he said.

      His comments come as NASA is considering cutting funds for its science and research programs, so as to provide money for the space exploration programs including new vehicles to take crews on safaris into the solar system.

      Crocker stressed that there has been progress in controlling costs, which may have gone unheralded. For example, he said, if one compares the cost of Viking landing on Mars years ago with the estimated cost of landing Phoenix on Mars, one sees “an order of magnitude reduction” in funds spent.

      Lockheed Martin, the largest defense contractor and a leader in space programs, also is committed to continuing and expanding its global partnerships on space programs with companies overseas, the company officials said at a briefing for defense journalists at the National Press Club.

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