Lockheed Martin Profits To Pay for NOAA N-Prime Repairs

WASHINGTON -- Lockheed Martin will forfeit all profits associated with a U.S. government weather satellite that was severely damaged in a mishap that NASA attributed to a lack of procedural discipline throughout the company's Sunnyvale, Calif., manufacturing facility.

Under an agreement with NASA and the U.S. National Oceanic and Atmospheric Administration (NOAA), Lockheed Martin will help cover the cost of repairing the NOAA N-Prime satellite out of the profits it had earned, or was to earn, on the program. The government will foot the rest of the $135 million repair bill, according to NASA spokesman Dave Steitz. NASA buys and launches weather satellites for NOAA.

Steitz and Lockheed Martin Space Systems spokesman Buddy Nelson declined to quantify the company's profit on the satellite, which is valued at $233 million. But the company took a $30 million charge against its 2003 third quarter earnings related to the factory-floor accident.

The NOAA N-Prime satellite was damaged in September 2003 when it fell nearly a meter onto a concrete floor at Lockheed Martin's Sunnyvale plant. The physical cause of the accident was 24 missing bolts needed to secure the spacecraft to a device called the turn-over cart, which is used to rotate satellites from a vertical to horizontal position.

NOAA N-Prime is the last satellite in NOAA's Polar-orbiting Operational Environmental Satellite program, which has provided weather and climate information to U.S. government agencies for decades. Lockheed Martin and its legacy companies have built all of the satellites under that civilian program. NOAA and the U.S. Department of Defense are collaborating on the replacement system, dubbed the National Polar-orbiting Operational Environmental Satellite System, which is slated to begin launching around the end of the decade. Most of the damage to NOAA N-Prime was sustained by the spacecraft chassis, but two of its six instruments will have to be rebuilt or replaced, Steitz said. Those instruments are the high resolution infrared radiation sounder and the solar backscatter ultraviolet radiometer, he said.

At least 15 percent of the platform components will have to be replaced, Nelson said. The company is testing some other components that were on the spacecraft at the time of the accident to see if they can still be used or repaired, he said.

"Lockheed Martin has voluntarily contributed to the rebuild effort all profit previously earned and paid on the contract," Nelson said. "The company will undertake the completion of the N-Prime satellite bus on a cost-only basis, forgoing all profits that otherwise might have accrued to Lockheed Martin for this spacecraft bus." NOAA N-Prime now is scheduled to launch in December 2007 or January 2008. Before the accident, plans called for launching the satellite in 2008.

NASA, which probed the mishap, said Lockheed Martin personnel failed to follow proper procedures in handling the spacecraft. The "NOAA N-Prime Mishap Investigation: Final Report," released Oct. 4, also cited ineffective government oversight as a contributing factor. The "operations team's lack of discipline in following procedures evolved from complacent attitudes toward routine spacecraft handling, poor communication and coordination among operations team, and poorly written or modified procedures," the report said. "It is apparent to the [investigation board] that complacency impaired the team directly performing the operation and those providing supervision or oversight to this team."

The report concluded that the procedural problems were pervasive across the Sunnyvale facility. "Many of the findings uncovered in this mishap investigation are not specific to this mishap but are systemic in nature," the report said.

Lockheed Martin has instituted stricter safety measures across all of its satellite manufacturing programs to prevent a similar mishap, Nelson said. "The evidence of our success is that our NASA and NOAA customers have asked us to rebuild the NOAA N-Prime satellite," he said.

NASA and NOAA also have established improved oversight of Lockheed Martin, according to Steitz and John Leslie, a NOAA spokesman. "We are bumping up our oversight of Lockheed Martin programs at this facility," Steitz said. "We will be looking at projects across the board."

The only NASA-related satellites at the Sunnyvale facility are NOAA N-Prime and its sister satellite, NOAA-N, Steitz said. The facility has other work including several Department of Defense programs and integration and testing of commercial satellites manufactured at Lockheed Martin's Newtown, Pa., facility.

NASA is satisfied with the efforts Lockheed Martin has made thus far, Steitz said. "We don't think this will have an effect on future bids," he said. "Our corporate partner has responded completely to the report."