[Satellite TODAY 07-23-13] Astrium Satellites and Thales Alenia Space have been declared the winners of an €800 million contract with the United Arab Emirates (UAE) Ministry of Defense. The recent announcement names Astrium as the lead contractor for the Falcon Eye program, a  UAE defense initiative responsible for managing next-generation military surveillance satellites. The deal includes provisions for the design, construction and launch of two satellites and completion of the ground segment. As part of the contract, 20 engineers in the UAE will be trained in France for the program, resulting in the creation of more than 1,000 technology jobs in France. The contract is also significant for Astrium said Eric Beranger, CEO, Astrium Satellites, during an exclusive interview with SatelliteTODAY.com. "This one is pretty exceptional in terms of the size. This is likely to be the big one for us this year," he said.

 

   The new satellites will help support image intelligence applications for the UAE, said Adam Keith, director of space and observation with Euroconsult. And from a U.S. perspective the deal was a long time coming, according to Jay Gullish, director of space and telecommunications with Futron Corporation. “There have been rumors for years that UAE has been trying to develop its own satellite capacity. I think the award of the contract is a big win for Astrium and Thales,” Gullish said. “Europe has strong military ties with the UAE, so it would seem the choice is logical.”

 

      According to Keith and recent Euroconsult reports, much like the Department of Defense and the National Security Agency’s (NSA) role in the United States, the UAE’s new Ministry of Defense satellites will be used for the collection of Image Intelligence (IMINT) and Geospatial Intelligence (GEOINT) information within their own regions. The UAE system constellation is expected to “help fill in gaps which are not being met from current systems,” Keith said. “That’s one of the motivations of having their own system.”

 

      The new satellite contract will do far more than fill intelligence gaps for the UAE, and this is significant, according to Keith who noted that for the first time the UAE will not need to rely on other countries for SIGint. “Having their own autonomy over the data is significant,” Keith said. “If you were to purchase data from commercial guys, they have to log the data and certain governments don’t want other governments to know where they are capturing their data. So, that autonomous element plays a key role.”

 

      As far as the practical intelligence applications for UAE’s new satellites, Keith said asset tracking and logistical monitoring of marine surveillance is significant, which includes monitoring of troop movement. However, while an improvement over what has been in place with other governments, Gullish noted the resolution will not be precise enough for facial recognition or license plate reading applications. “My feeling is that the 1 to 3 meter raw image is not quite state-of-the-art, it’s really behind the curve compared to U.S. technology,” he said.

     

      The choice to select Astrium and Thales over a U.S. company such as Lockheed Martin may reflect the competitive disadvantage faced by U.S. satellite manufactures due to U.S. Department of State’s International Traffic in Arms Regulations (ITAR) restrictions on foreign products.

 

       “Perhaps ITAR left U.S. companies lagging a little, not regarding capabilities but in terms of being able to provide this type of technology to foreign entities,” Keith said. Noting that while there has been some progress in terms of U.S. deregulation, “when it comes to earth observation satellites, some of the restrictions have hurt U.S. companies, such as resolutions closing entry restrictions which wouldn’t affect the civil world as much as defense,” he added.

 

       “It will be interesting to see how ITAR reform impacts future competitions. The [Obama] Administration is reviewing comments now, and senior officials have said publicly that they hope to publish a final rule by the end of the year. End-of-year publication would mean that the new system would take effect in mid-2014,” said a source familiar with the ITAR regulation reform who was not allowed to comment publically. Meanwhile, the U.S. House Intelligence Committee on Tuesday said it is reviewing potential changes to the Foreign Intelligence Surveillance Act (FISA) to support NSA Counterterrorism tools.
 

     And, while the ITAR changes are being considered, U.S. regulations are ironically serving as a boon for European corporations, Keith said noting that Monday’s deal for Astrium may only be the beginning. Beranger said he is hopeful that the company will be able to secure additional contracts later in the year. While declining to discuss specific numbers, he indicated that a handful of other deals are up for bids in the defense arena, specifically noting Germany.

 

       “The German government has decided to go for a radar observation system (SARah) where we are part of the team which will deliver SARah. We have some others on tap,” Beranger said noting that the defense business has been surprisingly resilient this year. And in that light, he predicts a bright fiscal future for Astrium, in the short term, expecting that the company will perform “as least as well” compared to last year. “But, beyond this year, I will not take any bets,” he added.

 

      The UAE contract also reaffirms the relationship between France and the Emirates in terms of collaboration on space projects. “For Astrium, it is a very important win. We have a long commercial history with the UAE. We have led the Yahsat program, where we are providing them with the satellite communications infrastructure. We have exported with nine countries in terms of these types of satellites. This contract is an extremely important addition for us,” Beranger added.

Follow Steve Schuster on Twitter @stevenschuster.