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Galileo and the European Commission: Buying and Building a GNSS

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Galileo is now being developed as a fully public procurement with a €3.4 billion budget. The European Space Agency (ESA) is acting as the technical design authority and prime contractor.

The European Commission is currently negotiating with a short list of 11 industry teams competing for prime contracts in six so-called work packages (WPs) to build the fully operational capability (FOC) Galileo system. ESA and the EC say that an FOC constellation of 30 satellites is still planned, including four in-orbit validation (IOV) spacecraft, although some participants have called for a reduced set of satellites and services.

“It’s not just about sending up a bunch of satellites and building a ground infrastructure,” said Michel Bosco, an EC representative who spoke to the European Navigation Conference on May 4. “We are now moving from infrastructure to applications with the objective of promoting the quickest and broadest uptake of EGNOS and Galileo.”

Some work packages are further along than others, with some in the “competitive dialog” phase with bidders and others approaching the “best and final offers” phase. The system support WP, for example, may be signed this summer, but EC and ESA officials hope to have all contracts signed by the end of 2009.

“The negotiations are hard; the players know their jobs,” he added. “But the signs are positive.”

Nonetheless, ESA and industrial sources involved in the process say that the initial bids for WP4, space segment (satellites), were 40 percent over the budgeted allocations and the offers for all six WPs, several hundred million euros over budget.

ESA reportedly asked the competing WP4 teams, led by EADS Astrium and OHB-System for three options in their proposals: one 28-satellite batch (apparently including two spares), two sets (16 and 12) of space vehicles (SVs), and another for sets of 8 and 12. The latter option suggests that ESA might award two contracts of 8 each, ensuring a dual source for the space segment and reserving the option of choosing between the two designs for the final 12 satellites.

The first IOV satellites will begin launching next year from ESA’s facility in Korou, French Guiana, using Russian Soyuz rockets. A Soyuz facility is nearing completion in Korou. The launch strategy for the FOC satellites will probably use a combination of Ariane 5 launchers (four SVs per launch) and Soyuz (two SVs per launch).

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