Monday, May 14, 2012

MDA & RADARSAT Constellation's War of the Words

MDA President Dan Friedmann.
BC based MacDonald Dettwiler (MDA), acting in its capacity as prime contractor for RADARSAT Constellation (RCM), is slowly ratcheting up the tone and tenor of public statements regarding a perceived lack of promised Federal government funding for the program.

As outlined in the March 4th, 2010 article "RADARSAT Constellation Mission gets Funding in Budget," the original government plan was to provide a total of $497 million over five years in order to finish the RCM design work and then move forward with satellite construction. According to the article, the bulk of the spending was expected to occur "after 2011-2012."

But MDA, which has also announced recent layoffs in its Brampton, Ontario robotics factory due to the winding down of the US space shuttle program (as per my March 3rd, 2011 post "Downsizing Announced at MDA Robotics") and the inability of the MDA on-orbit satellite servicing program to gain any sales traction in the US (as outlined in my January 15th, 2012 post "MDA Satellite Servicing Agreement with Intelsat Expires."), is legitimately worried that the promised Federal government money will only arrive slowly and in amounts insufficient to support the program.

The latest volley in this ongoing, public war of the words is the May 11th Vancouver Sun article "Richmond-based MDA may lose 150 employees if satellite project doesn’t continue" which quotes MDA communications manager Wendy Keyser as stating that "the company’s Brampton (Ontario) operation ... expects to lose another 50 (employees) in 2012 as a result of the cuts to funding in the space robotics area.” According to Keyser, “the company could lose approximately 100 employees in its Richmond and Montreal operations if RCM does not continue."

Industry Minister Christian Paradis and MP Marc Garneau on May 9th. The minister is "committed to the Radarsat project and we are working on delivering in a cost-effective way."

According to the May 10th, 2012 article "RADARSAT Constellation Mission Future and Canadian Space Agency Budget Get MP's Brief Attention" the build phase ("phase D") of the RCM was originally scheduled to go ahead in September 2012, "however, the recently released budget made no mention of RCM and available documents by the CSA do not specify a dollar amount to be spent in the 2012-2013 budget."

So while the deal is officially still moving forward, the paperwork certainly isn't complete and the lack of a formally funded budget allocation in the current fiscal year gives MDA executives a reasonable cause for concern. In essence, no matter what the Federal government might say publicly, RCM is not a done deal until the terms and conditions of the final contract are complete.

According to the May 10th, 2012 Globe and Mail article "No funding, no liftoff for Radarsat program, CEO says," the Federal government department responsible for allocating the RCM construction contract (Industry Canada, according to the article and not the CSA) remains "committed to the RADARSAT project."

This is likely the core for the March 30th, 2012 MDA release titled "RADARSAT Constellation Mission update" which started the PR war with a public statement that MDA "has concluded that the budget does not include the funds required to continue the RADARSAT Constellation Mission (RCM) as currently envisioned."

The MDA concern also likely relates to the April 30th, 2012 Ottawa Citizen article "Costs jump for Canadian Arctic satellite surveillance system: documents" which reports on Department of National Defense (DND) documents indicating that RCM, originally estimated at $600 million CDN, is now likely to cost over $1 billion CDN to complete.

So not only is the contract not complete, but the cost to complete the contract has substantially increased, which is likely to complicate any future negotiations.

The next few months are expected to be critical for the program.

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