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8/10/2010
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NGA Awards $7 Billion In Satellite Contracts

Digital Globe and GeoEye were awarded $3.55 and $3.8 billion in contracts, respectively, for next-generation satellite images and technology by the National Geospatial-Intelligence Agency.

The National Geospatial-Intelligence Agency (NGA) has awarded two contracts totaling more than $7 billion for next-generation satellite images and technology.

The agency, which is responsible for the collection of satellite images for the U.S. military and intelligence efforts, has agreed to pay $3.55 billion to Digital Globe and $3.8 billion to GeoEye, with both contracts beginning Sept. 1.

The contracts are part of the NGA's EnhancedView program, which is aimed at collecting next-generation satellite images that have a higher resolution than current ones available. These can provide more detailed photographs of activity that military and intelligence analysts are interested in viewing.

Each contract is for one year with possible renewal for up to 10 years, and is subject to congressional approval, according to the companies. The NGA has the right to suspend or terminate the contracts at any time.

The agreement with Digital Globe is to deliver satellite images from the company's WorldView satellite constellation under a service level agreement (SLA) for $2.8 billion. The remaining $750 million of the contract is for value-added products, enhancements to infrastructure and other services, according to Digital Globe.

To meet the requirements of the contract, Digital Globe said it will immediately begin procurement and construction of WorldView-3, the next iteration of its satellite technology. It should be ready for launch by the end of 2014, the company said.

The NGA's agreement with GeoEye also is for more than one deliverable and will help the company launch a new satellite.

$2.8 billion is for commercial satellite imagery purchases over the next 10 years, which extend a current contract under an SLA for $150 million per year, according to GeoEye.

The contract also provides the NGA with an additional $184 million of images per year for seven years when GeoEye's planned third-generation satellite GeoEye-2 becomes operational, which is expected in 2013.

$337 million of the contract also is to share costs to develop and launch GeoEye-2, while $700 million is for other products and services, including the design and procurement of more infrastructure to support government operations, according to GeoEye.

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