Attachment request

request

REQUEST submitted by Lockheed

request

2005-07-14

This document pretains to SAT-AMD-20040130-00009 for Amended Filing on a Satellite Space Stations filing.

IBFS_SATAMD2004013000009_445258

DUPLICATE BEFORE THE s s , _ RECEIVED — Fo Federal Communications Commission & WaSHINGTON, D.C. 20554 JUL 1 4 2005 FedealCanmuncaton Conmica In the Matter of ) Burmu/Ofice ) File No. SAT—LOA—19990427—00047 Lockheed Martin Corporation ) File No. SAT—AMD—20030730—00151 ) File No.. SAT—AMD—20040130—00009 Application To 1aunch and Operate a ) File No. SAT—AMD—20040203—00011 Geostationary Orbit Space Station in the ) File No.. SAT—AMD—20040706—00129 Redionavigation Satelite Service at 133° W.L... ) File No. SAT— WUD{)SS ) Call Sign: 8237 To: Chief, International Bureau J 3.9 2006 Policy Branch intormatonal Bureau REQUEST FOR DETERMINATION OF COMPLIANCE WITH SATELLTTE IMPLEMENTATION MILESTONES Lockheed Martin Corporation ("Lockheed Martin®), by counsel and pursuant to Section 25.164 of the Commission‘s Rules, hereby notifies the Commission that t has met the firs three imilestones set forth in the authorization issued on June 23, 2005 granting it authority to Iaunch and operate a Radio—Navigation Satelite Service (‘RNSS") payload at 133° West Longitude as part ofits Regional Positioning System ("RPS"). See Lockheed Martin Corporation, DA 05— 1747, slip op. (1B. released June 23, 2005) ("133WRPS License Order"). In particular, Lockheed Martin demonstrates herein that i: () has contracted for construction othe RNSS payload authorized in the 133W RPS License Order; (i) has completed Criical Design Review of the payload: and (ii) has not only commenced but completed construction ofthe authorized facilty. As a result of these showings, Lockheed Martin respectfully requests that the Intemational Bureau determine that Lockheed Martin has satisfed the first three milestone requirements set forth in the 133W RPS License Order. The determination that Lockheed Martin has satisfied the frstthree ofthe four satellite implementation milestones will allow Lockheed

Maniin to reduce the $3 million bond thati is required to post byJuly 25, 2005 pursuant to the 133W RPS License Order to $750.000. Executive Summary The Commission granted Lockheed Martin‘s appliation for an RNSS space station license at the 133° W.L. orbital location on June 23, 2005 in the 133WRPS License Order. Paragraph 49 of that Order requires Lockheed Martin to meet four satelitimplementation milestones, as follows: Execute a Binding Contract for Construction by June 23, 2006 Complete the Crtical Design Review by June 23, 2007 Commence Physical Construction by June 23, 2008 Launch and Begin Operations by Tune 23, 2010 See 133W RPS License Order t 14. In addition, the same paragraph also mandates that Lockheed Martin post a $3 million bond with the Commission no later than July 25, 200 pursuant to procedures established by the Commission. 1d. Lockheed Martin expects to post the required bond by the deadline established in the 133W RPS License Order. Under the Commission‘s Rules, a geostationary satellte licensee may reduce the amount of ts bond by $750,000, twenty—five percent of the total amount, upon successfully meeting each of the milestones set forth in ts authorization and codified under Section 25.164 of the Rules. See 47 CFR. §25.165(d). The Commission‘s procedures provide that lcensees will be permitted to file a new bond ata lower amount only after the International Bureat announces thatthe licensee has met the milestone(s). See FCC Public Notice, Report No. SPB—187, DA 03— 2602, 18 FCC Red 16283 (2003) * Lockheed Marti is filing this request with the attachments (which include the contract with PanAmSat and other confidential and proprietary information) redected.. An unredacted version of this request,with completeattachments, is being filed contemporaneously under a request for confidentialtreatment

Lockheed Martin‘s progress toward implementing its suthonty for the 133° W.L.. RPS facility was well advanced at the time of licensing. and t has already reached three of the four milestone points contained in the 133W RPS License Order. A summary of the status o Lockheed Martin‘s compliance with the firstthree implementation milestones set forth in Section 25.164(b)is provided here for convenience: Milestone Deadline Date on Which FCCRule Milestone per 33w RPS the Milestone Evidence of Completion License Order was Saticied 281600 Emy imoa June 23, 2006 October2,200— PanAmatApreement, pariculily Binding Nor— hinding contrit: Aricles SA & 29and Atachnent A. Contingen October 10,200%— Contaet non—contingemt contact 28.164000) Criient Design June23, 2007 May 13,200¢ PanAmSat Agreement Atachment A Review (13% progres payment duefolowing CDR); PanAmarLener 28 J640G) Commencement June23,.2008 August $2003 HellDeclaration: PanamSatLeren of Psical (note:physical PanXmSat 2008 Amoal Stats Repont Constraction consiuction completed Jine 2009) Each clement summarized above is discussed below in detail, and each document referenced is fully identified. Accordingly, Lockheed Marrin is filing this notification pursuant to Sections 25.164(c). (4) and (e) of the Commission‘s Rules to report its completion ofthese three requirements. In addition, because satisfaction of these requirements permits t to reduce the amount ofthe bond posted with the Commission," i is requesting that the Commission review thi submission and issue a determination that Lockheed Martin has met itsfirs three implementation milestones allowing it to reduce the amount ofits performance bond to $750,000, commensurate with the See 133W RPS License Order at 12 (§ 30); 47 C.FR. § 25.165(d).

v41 progress made to date in bringing the 133° W.L.. RPS facility imto service. Approprite showings regarding each of the three milestones are provided below Milestone 1 — Entry into a Binding, Non—Contingent Construction Contract — Satisfied October The initial contracting milestone requires that the licensee enter mto a binding, non— contingent contract for construction of the authorized facility. See Amendment ofthe Commission‘s Space Station Licensing Rules and Policies, 18 FCC Red 10760, 10831 4 184) (2003) ("SSLR Order"). Lockheed Martin entered into a binding agreement (*Agreement") for construction of the authorized space station on October 2, 2003 when it signed a contract with PanAmSat Corporation (‘PanAmSat") which provided for PanAmSat to fumish an RNSS payload for Lockheed Martin‘s use on its Galaxy XV spacecraft, then already under construction. The Agreement, a copy of which is attached hereto as Attachment 1, as required by Section 25.164(c) of the Commission‘s Rules, 47 C.FR. § 25.164(c), became non—contingent a few days later.® In late October 2003, Lockheed Martin notified the Commission thatit had The agreement included at Article 34 a Condition Subsequent providing that the agreement would only be effective if: (1) the FAA issued a contract modification authorizing the project and (2) PanAmSat‘s project contractors for satellte manufacturing and launch agreed to adhere to the same terms previously offered to PanAmSat for he Galaxy XV project. The sgreement, however, required that these conditions be met by October 10, 2003, just eight days after contract execution — and these conditions were, in fact, met within that time period. rendering the contract non—contingent not later than October 10, 2003. See Declaration of Dan Heil at 1 ("Hell Declaration"),attached hereto as Attachment No. 2. This is fully in accord with the Commission‘s interpretation of ts binding. "non—contingent" contract requirement, which it has explained "does not mean that the contract cannot contain any contingencies," but simply that the contract permits "neither significant delays between the execution of the contract and the actual commencement of construction, nor conditions precedent to construction." SSLR Order, 18 FCC Red at 10831 (4 184). It is therefore sufficient that a contract "contains no unresolved contingencies that could preclude construction ofthe satelite." 1. With the resolution of the Article 34 condition subsequent in October 2003, the Lockheed Manin— PanAmSat agreement became non—contingent shortlyafer ts execution, on or before October

arranged with PanAmSat to host an RNSS payload on Galaxy XV at the 133° W.L. orbital Tocation. See Letter from Stephen D. Baruch, Counsel to Lockheed Martin, to Marlene H. Dortch, Secretary, FCC, File Nos. SAT—10A—19990427—00046 and —00047; SAT—AMD— 20030730—00150 and —00151, dated October 29, 2003 There is no question that the Agreement satisfes the Commission‘s contract milestone. The Agreement is binding and non—contingent as between the partes®; it identifies the specific satellte and design characteristics‘; t specifies the dates for the start and completion of construction‘; and it includes payment terms (spread throughout the construction phase of the contract with significant initial payments and the majority of payments before the end of construction) that unequivocally demonstrate Lockheed Mrtin‘sinvestment and commitment to completion of the system." These are the elements that the Commission has historically looked to when assessing compliance with the first milestone." Milestone 2 — Completion of Critical Design Review ~ Saticfied May 2004 The Commission has not prescribed a particular method or standard for determining satisfaction of the second implementation milestone, the completion of Critical Design Review (°CDR%). It has, however, identified this stage as the point in "the spacecraft implementation 10, 2003, and has remained in effect since that time. 1d. at$.2. Thus, the contracting milestone was met well before the June 23, 2006 date specified in the 133W RPS License Order. See Agreement, Article 29.A (‘[T}his Agreement will be bindiing upon the parties ...") See also note 3. supra * See Agreement, Article 3.A, Articles 32.B2) and 32.B(G) (Statement of Work and Navigation Payload Specification, both attached to and incorporated into Agreement) * See Agreement,Article 4.A(x) (Payload Acguisition Phase). See Agreement, Article 5.A; Attachment A. Section 1.0 (Payment Schedule for Payload Acquisition Phase) * See Mobile Communications Holdings, Inc.. 18 FCC Red 11650 11654 (2003), quoting Tempo Sarelite, Inc.. 7 FCC Red 6597, 6600 (§ 13) (1992).

4. process at which the design and development phase ends and the manufacturing stage stars." See SSLR Order, 18 FCC Red at 10833 (§ 191). Ithas suggested that proof of a large payment of money, often coincident with the completion of CDR; affidavits from an independent manufacturer; and evidence that all long Jead items needed to begin physical construction of the spacecraft could provide demonstration that this milestone has been satisfied. 1d. As confirmed by PanAmSat, Lockheed Martin‘s contractor, he CDR for the 133° W.L. RPS payload was successfully completed on May 13, 2004. See Letter from Kenneth Lee, Vice President,Space Systems Development & Acquisition, PanAmSat, to Robert Lorence, Subcontract Manager, Lockheed Martin, at 1, dated July 13, 2005 (*PanAmSat Letter®). The PanAmSat Leter is included as Attachment No. 3 to this Request. Pursuant to the termsof the Agreement, Lockheed Martin made a progress payment shorly after completion of CDR (Payment 4)that represented 13% ofthe total construction phase price. See Agreement, Attachment A., Section 1.0. With the payment upon completion of CDR, which was the fourth of the six payments that have been made to date to PanAmSat for payload construction and integration, Lockheed Martin had made payments totaling 43% of the total construction phase charges." The fact that the RNSS payload licensed to Lockheed Martin has now been constructed to completion (see discussion of Milestone 3, immediately below) should, under the rationale of the SSLR Order, demonstrate sufficiently that Lockheed Martin has satisfied the CDR milestone Milestone 3 Commencement of Physical Construction Satisfied August 2003 As with the CDR milestone, the Commission has established no specific guidelines for determining satisfaction of the third implementation milestone, commencement of physical * See Agreement, Attachment A. Section 1.0 and Table A—1

construction. Instead, it has siated that Ticensees are required "to provide sufficient information to demonstrate to a reasonable person that they have commenced physical construction oftheir Hicensed spacecraft" SSLR Order, 18 FCC Red at 10834 (4 193). Actual construction of the 133° W.J.. RPS payload and modification of the Galaxy XV spacecraft by PanAmSat‘s satellte vendor, Orbital Sciences Corporation, began in August 2003 contemporancously with the negotiation of the Agreement between Lockheed Martin and PanAmSat. See PanAmSat Lettr at1. The Galaxy XV satelite was iself under construction at the time Lockheed Martin and PanAmSat agreed to the arrangement for inclusion ofthe RPS RNSS payload. Construction and testing of the 133° W.L. RPS payload was successfully completed by PanAmSat and Orbital Sciences last week, on July 8, 2008. 1d; Heil Declaration at3 3. See also PanAmSat Corporation 2005 Annual Status Report at 10 (filed June 30, 2005 ("Galaxy 15 has completed construction."). Lockheed Martin has now made six of the eight total payments provided for in ts Agreement with PanAmSat, totaling approximately 70%e of the scheduled non—recurring payload payments called for under the contract. PanAmSat Letter at 1. A seventh payment keyed to the completion of post—construction thermal vacuum testing has just been invoiced to Lockheed Marin, and the final payment will be due following successful Jsunch and completion of n—orbit testing. 1d. Currently, the Galaxy XV spacecraft and the on— board Lockheed Martin RNSS payload are being prepared for shipment to the Arianespace Jaunch facility in Kourou, French Guiana. While the specific date for the launch has not been finalized. Galaxy XV is expected to be launched within the next few months, in the late summer or early fall of 2005. See PanAmSat Letter at 2; see also Heil Declaration at 3.

Lockheed Martin has submitted the foregoing information in compliance with Sections 25.164(c), (d) & () of the Commission‘s Rules governing milestone compliance. This information demonstrates that three of the four implementation milestones set forth in the 133W RPS License Order have alreadybeen met. The 133WRPS License Order requires Lockheed Martin to post a $3 million performance bond no later than July 25, 2005, but also states that peostationary satellite lcensees "may reduce the amount of the bond upon meeting each milestone." 133W RPS License Order at 12 (J 37). Inasmuch as Lockheed Main has demonstrated herein that it has completed the first three of the four implementation milestones to which itis subject,it respectfully requests that the Commission affirm this fact, allowing it to reduce the amount of ts bond to $750,000, the amount that ts license and the Commission‘s rules permit a geostationary satelite lcensee to post fllowing completion of ts firs three implementation milestones

Should there be any questions rearding the foregoing information, please contact the undersigned counsel. Respectfully submitted, LOCKHEED MARTIN CORPORATION »Steplién D. Baruch David S. Keir Leventhal Senter & Lerman PLLC 2000 K Street, N.W., Suite 600 Washington, D.C. 20006 (202) 429—8970 Iis Attommeys Jennifer Wareen Senior Director, Trade and Regulatory Affairs Lockheed Martin Corporation 1725 Jefferson Davis Highway Arlington, VA 22202 July 14, 2008


(Construction Agreement Provided by Lockheed Martin Corp. Pursuant to Request for Confidential Treatment, dated July 14, 2005)

ATTACHMENT 2

(Declaration of Dan Heil, Lockheed Martin Corp., Provided Pursuant to Request for Confidential Treatment, dated July 14, 2005)

ATTACHMENT 3

(Letter from Kenneth Lee, PanAmSat Corp. is Provided by Lockheed Martin Corp. Pursuant to Request for Confidential Treatment, dated July 14, 2005)


Document Created: 2005-07-21 16:35:12
Document Modified: 2005-07-21 16:35:12
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