On Friday, the Department of Defense announced that it has awarded Lockheed Martin (NYSE:LMT) a $62 million firm-fixed-price contract to perform work on Global Positioning System III, or GPS III, Space Vehicles 5 and 6. Work is expected to be completed by June 30, 2017.
To be clear, this is a different contract from the $1.9 billion awarded to Lockheed for its work on "space vehicle five and six production launch operations" under the Advanced Extremely High Frequency communications-satellite program. Same number of satellites, so far -- but a different kind of satellites.
Lockheed describes GPS III as the next-generation satellite system, designed to take the place of America's current GPS constellation, the satellites of which "are aging quickly." GPS III, according to Lockheed, "will improve position, navigation, and timing services and provide advanced anti-jam capabilities, yielding superior system security, accuracy, and reliability." Lockheed continued: "The first GPS III satellites will deliver signals three times more accurate than current GPS spacecraft and provide three times more power for military users, while also enhancing the spacecraft's design life and adding a new civil signal designed to be interoperable with international global navigation satellite systems."
Lockheed's partners on the project include Exelis (NYSE:XLS), General Dynamics (NYSE:GD), Honeywell (NYSE:HON), and Alliant TechSystems (NYSE:ATK), among others. This team is expected to produce at least the first dozen satellites in the GPS III constellation, and perhaps more. Ultimately, the U.S. intends to field a GPS III constellation of as many as 32 satellites.
Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool owns shares of General Dynamics and Lockheed Martin. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.