CSA awards MacDonald Dettwiler $706M contract to complete satellite constellation

Long-Term Space Plan still pending

The federal government has approved the final phase of funding for the long awaited Radarsat Constellation Mission (RCM) with the awarding of a $706-million, seven-year contract to MacDonald Dettwiler & Associates (MDA) to build, launch and initially operate a constellation of three smaller satellites in 2018. The go-ahead is the culmination of three months of intensive negotiations between the Canadian Space Agency (CSA), MDA and Treasury Board and was announced just days before the resignation of CSA president Dr Steve MacLean (see page 2).

The MDA contract increases the money spent or committed to RCM to $1.1 billion — nearly double the original 2005 estimate of $600-million which projected a launch date of 2012. To date, the project has consumed $275 million and will cost $20 million annually to operate.

"This opens the door to going full steam ahead to manufacturing this system," says Dr Alain Carrier, CSA's director of Earth Observation Projects and RCM project manager. "The original $600-million estimate did not include all the functionalities the RCM has now."

The 2010 Budget allocated $397 million over five years for RCM, to be augmented by $100 million in CSA funding. Several user groups — primarily government departments (see chart on page 2) — will provide an additional $308 million in funding with the government contributing approximately $140 million in new money. The 2005 Budget also contributed to the RCM's early development, providing $111 million over five years to development "the next generation of advanced radar remote sensing satellites". It required the CSA to contribute an additional $89 million from its A-base Budget.

Under the terms of the MDA contract, the Richmond BC-based company assumes full responsibility and risk for the firm fixed contract through the construction phase. With Radarsat II, which MDA also constructed, the CSA was responsible for any cost overruns.

"MDA came up with a cost over three months of negotiations. The downside is there there's no visibility on the cost structure. We only know approximate costs," says Carrier. "For industry, the Canadian content and regional distribution requirements have been met."

An integrated team will operate RCM for the first year, when any remaining glitches will be resolved. For the remaining years of operation, the CSA will undertake a competitive process in which MDA and others are expected to compete. A coordinated user and science team will oversee the constellation's operation including its new functionalities such as "dramatically enhanced" land security functions particularly for the Arctic. The RCM will provide up to four passes per day for the far north and several passes daily over the Northwest passage.

Governance of the RCM includes a senior project advisory committee comprised of DG-level representatives, with a DM-level committee making high-levels decisions and liaising with MDA.

Carrier says project negotiations dragged on while externalities beyond the control of the CSA pushed back construction and the launch date.

"Many things have happened over the past two years. There was the government's deficit reduction plan which impacted the Long-Term Space Plan and the Emerson report could also have an impact," says Carrier, referring to the recent report by an advisory panel examining federal support for space and aerospace (R$, December 6/12).

"The future of the RCM was not guaranteed until recently. It needed government and Treasury Board approval and the cost increases needed to be defended. The last eight months have been quite dynamic in terms of discussions with the central agencies."

For MDA, the awarding of the RCM contract — the largest single contract in CSA history —caps a long and often abrasive relationship with the federal government, when the future of its space business was nearly sold to US-based military contractor Alliant Techsystems (ATK). The federal government blocked the sale and MDA retained its space business, bolstered by last year's acquisition of Space Systems/Loral Inc, Palo Alta CA by MDA for $975 million. (R$, July 5/12).

"This is a major step forward for MDA as a leader in the growing global surveillance and intelligence market," said MDA president and CEO Daniel Friedmann in a press release. "With this contract, MDA has a strong foundation for continued development of its space missions, satellite ground systems, radar payload and geospatial services businesses."

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