Rockwell Loses Major Satellite Contract to GE

A Rockwell International division in Seal Beach has lost to General Electric a $1.2-billion contract for the second phase of an Air Force satellite program that the company has worked on since 1983.

An Air Force official close to the program said a Rockwell scheme to overcharge the government on the first phase of the work apparently contributed to the loss of the contract. A Rockwell official, however, denied that its overbilling conviction figured in the Air Force’s decision.

A GE unit in East Windsor, N.J., which defense sources say submitted a lower bid, was awarded the contract by the Air Force space division in El Segundo late last month to build the Navstar Global Positioning System satellites.

The satellites provide civilian and military aircraft, ships and land vehicles with their geographical locations accurate to about 50 feet anywhere in the world. By pushing a couple of buttons on a computerized receiver, people using the satellite service can find their exact position on the globe.

Rockwell’s Satellite and Space Electronics division in Seal Beach is building 28 Navstar satellites under a $1.2-billion contract through 1994. Navstar is the largest program at the Seal Beach plant, where about 800 people are assigned to the project.

Company officials said there would be no immediate job cutbacks as a result of the Air Force’s decision.

In January, Rockwell entered a conditional guilty plea to charges that it overbilled the Air Force by $500,000 on the Navstar project, and the company paid a $5.5-million fine.

The company was considered the most likely candidate to receive the contract for phase two, which involves an additional 20 to 26 satellites, because it has only a few minor technical changes from the first phase.

“The fact that their past performance has been shady did not help them,” said the Air Force official, who asked not to be identified. “It’s a bitter pill to swallow that GE won the contract.”