Contract Award Imminent for Galileo's Next Block of Satellites

December 7, 2009

An unconfirmed report claims that the European Commission and European Space Agency have awarded a contract for eight Galileo satellites to underdog bidder OHB Technology of Germany. However, this report has been privately denied and in fact refuted by an EC representative. The OHB-led consortium includes small-satellite specialist Surrey Satellite Technology Ltd. of Britain, which built and continues to operate the GIOVE-A satellite, Galileo’s very first launch. The competing Astrium-Thales Alenia consortium built the second Galileo satellite now in orbit, GIOVE-B.

The report, published on December 4 in the Space News website, asserts that “the European Commission has selected OHB Technology of Germany to build at least eight Galileo navigation and positioning satellites for about 350 million euros ($525 million) in a decision that postpones any award to competitor Astrium Satellites pending further negotiations with Astrium.” Reporter Peter de Selding cites industry officials as his sources.

An EC representative privately denied the report, asserting “it is not true.” An industry source said “It is not confirmed, we are waiting for the decision.”

Certainly the rumor has created an uproar in the German state of Bavaria, a center for that country’s aerospace industry and government-aided research. Astrium had reportedly planned to perform much of its Galileo work in that region, and the Space News story holds out the expectation that “political pressure will be applied to reverse the ruling in the coming days.” The region is already home to the Galileo Control Center at a German Aerospace Agency (DLR) site.

The two consortia have been negotiating their bids on the contract with the Commission and its technical adviser, the European Space Agency (ESA), for 15 months. Initially, the two European Union bodies set a contract ceiling of 840 million euros to build 28 Galileo satellites; recently they revised the total order to 22 satellites and asked for bids for eight, 14 and 22 satellites.

Reportedly, there are price ceilings for each of the three potential order sizes — around 400 million euros for eight satellites, 650 million euros for 14 satellites, and 840 million euros for all 22

Repeatedly postponed throughout its conceptual phase, the Galileo system now — officially, at least — expects to achieve initial operational capability by 2014.

Whether or not the Space News report is eventually substantiated, the central European government has already signalled in multiple ways its dissatisfaction with its various member states' aerospace industry giants, whom it holds responsible for the protracted dysfunctionality of the now abandoned public-private partnership to build Galileo. The EC has largely wrested control of the satellite award process away from its space agency, and repeatedly indicated that it intends to maintain a firm grip on the purse strings.