[Satellite News 07-21-09] Boeing’s re-entry into the satellite design market, with the introduction of its 702B medium-power satellite model, was implemented to offset the company’s loss from the termination of the U.S. Air Force’s Transformational Satellite Communications (TSAT) program in April, Boeing Vice President Craig Cooning said in a July 16 telephone press conference.
    Boeing introduced the 702B July 15 with a contract to build the Intelsat 21 and Intelsat 22 satellites along with two other spacecraft for Intelsat based on the 702B. A report in Reuters, dated July 16, speculated that the commercial satellite design deal, Boeing’s second in the past five years, had a high-end combined value of $1 billion. Cooning and Intelsat CTO Ken Betaharon said those projections were incorrect but did not disclose the true amount.
    Boeing had been developing the 702B satellite for more than four years, focusing on lowering risk with off-the-shelf technologies. The 702B project was considered a lower priority compared to TSAT, but when U.S. Defense Secretary Robert Gates announced that he was canceling the TSAT program, the company looked at its most available and immediate revenue-generating alternatives, Cooning said. “With the shift in priority for the new administration due to the economy, we felt this was the right move to make up for the loss of TSAT,” he said.
    The TSAT contract, which created fierce competition between Boeing- and Lockheed Martin-led development teams, was estimated to be worth about $7 billion. Boeing and its competitors in the aerospace manufacturing market relied on TSAT as a major source of income over the years, but constant changes in the program and the U.S. military’s needs led to several delays and increased risk. Intelsat General President Kay Sears said that TSAT put manufacturers in a dilemma that they could not foresee. “A lot of what they’re being asked to do [by the U.S. military] is developmental in nature. When the military goes to a manufacturer and has a bunch of pieces of a system that are in the research and development phase, the manufacturers struggle to bid and stick to a schedule. The reason is that they don’t know how long it is going to take them to build these capabilities and they cannot accurately account for all the sorts of problems they will encounter along the way,” she said.
    The TSAT program had been plagued with scheduling and budget problems since its inception in 2004. The satellite system was originally scheduled to launch in 2012 but was delayed to 2013 after a $300 million reduction of program funding was cut by U.S. Congress in 2005. The U.S. Air Force then delayed its decision to select TSAT’s final space segment development contractor from October 2007 to April 2008. In October 2008, the Pentagon announced that it would defer its decision on choosing a contractor to build the system until 2010, with no guarantees that it would continue to fund further development.
    In December 2008, after rumors of the program being on the brink of termination and a series of critical reports from the U.S. Government Accountability Office, the U.S. Air Force released a new request for proposal to Lockheed Martin and Boeing, changing the program timeline once more by calling for five satellites and ground stations, with the launch of the first satellite projected for 2019. Gates, who retained his position as Defense Secretary through the January administration change, finally pulled the plug on TSAT four months later.
    To expand the appeal of the 702B, Cooning said that the satellite was designed to be compatible with every major commercial launch vehicle, “except, obviously, Sea Launch. We’ll have to wait to see what happens there,” said Cooning. Sea Launch, a Boeing company, filed for Chapter 11 bankruptcy protection in June. Sea Launch was approved to remain operational during the Chapter 11 proceedings by a U.S. bankruptcy court. The launch company could not immediately be reached for comment.