[Satellite TODAY Insider 11-02-11] The U.S. Congressional Budget Office (CBO) proposed alternative approaches for the U.S. Department of Defense to upgrade its GPS network with a focus on upgrading GPS receivers. According to a report issued Oct. 28, the CBO included ground- and space-based assets from Iridium’s satellite constellation as a potential alternative for the Pentagon to meet its requirements.

   “This approach [using Iridium satellite]…would be less expensive than the Department of Defense’s current plan…and would yield benefits almost a decade earlier than the Pentagon’s plan,” the CBO wrote in the report.

   The U.S. GPS system, originally built for military users and applications, achieved full operational status in 1995. The Pentagon discontinued “selective availability” of the GPS system — in other words, degraded accuracy for nonmilitary users — in May 2000. In the 11 years since, the GPS system has seen widespread adoption by the commercial and consumer sectors. The Department of Defense is currently planning to build 40 GPS satellites with gradually improving capability under the GPS 3 A, B and C phase program that is set for launch from 2014 through 2030. The new GPS satellites aim to provide the military with improved accuracy from 10 feet to 8 inches, as well as the ability to overcome jamming, however, according to the CBO, the total estimated cost of the U.S. military’s current plan is $22 billion. The high price tag has made it difficult to support in the U.S. political arena.

   The CBO said that the Pentagon could save more than $3 billion by using the Iridium constellation and achieve operational status eight years earlier. 

   Raymond James Analyst Chris Quilty said that while the CBO’s alternative plan would be a “no-brainer” in the commercial world, the GPS system’s U.S. military management makes it subject to a, “thicket of entrenched interests including the U.S. Air Force and Lockheed Martin, the prime contractor on GPS 3. Consequently, the decision to adopt the CBO’s alternative approach is unlikely to be concluded in the near future,” Quilty told Satellite TODAY Insider. “[The Department of Defense] could essentially achieve the same performance by simply upgrading the 400,000 military GPS receivers in use with an improved antenna and an Iridium High Integrity GPS (iGPS) module. Furthermore, while the military’s plan is dependent on unproven technology and subject to likely cost increases, the iGPS program is scheduled to complete development in 2011 and enter operational status in 2012."

   If the Pentagon were to accept the CBO’s iGPS strategy, the benefits to Iridium could be substantial as the plan would require hardware purchases totaling $200 million through 2016 and $1 billion through 2025. The U.S. military also would be required to purchase per-minute airtime usage on the Iridium network totaling up to $40 million annually, according to Quilty. “We are cautiously encouraged by the CBO’s endorsement of Iridium’s iGPS capability, which has been developed over the past several years in cooperation with Boeing through a $153 million Pentagon development contract awarded in 2008. While the likelihood of success remains highly uncertain at this time, we view the iGPS opportunity as yet another ‘call option’ that could materially enhance the value to Iridium shareholders,” he said.

CORRECTION – The first line of a previous version of this story should have read: "The U.S. Congressional Budget Office (CBO) proposed alternative approaches for the U.S. Department of Defense to upgrade its GPS network with a focus on upgrading GPS receivers." The following quote also should have been attributed to Raymond Analyst Chris Quilty: “[The Department of Defense] could essentially achieve the same performance by simply upgrading the 400,000 military GPS receivers in use with an improved antenna and an Iridium High Integrity GPS (iGPS) module. Furthermore, while the military’s plan is dependent on unproven technology and subject to likely cost increases, the iGPS program is scheduled to complete development in 2011 and enter operational status in 2012."