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Martin wins spy satellite contract


WASHINGTON -- Martin Marietta Corp. has won a multibillion-dollar U.S. spy satellite contract that was originally awarded to TRW Inc., a person familiar with the bidding said yesterday.

The federal government reopened bidding on the top-secret program earlier this year after appeals by Martin Marietta and Lockheed Corp.

The contract, which is estimated to be worth more than $5 billion, covers development of the military's next-generation signals-intelligence satellites, which eavesdrop on electronic signals over sea and land.

The award to Martin Marietta, based in Bethesda, is a major setback for Cleveland-based TRW. Both TRW and Lockheed have seen a decline in their space intelligence programs over the last decade.

John Pike, director of the Space Policy Project at the Federation of American Scientists, said TRW and Lockheed are left with just one major long-term contract between them, a high-frequency military communications satellite called Milstar. Lockheed builds the satellite, while TRW works on the electronics.

"Ten years ago, if you were to talk about who's doing the spy satellite business, basically it would've been TRW and Lockheed. Now, it's basically Martin Marietta," Mr. Pike said.

Martin Marietta's satellite operation is based in Denver.

TRW won the latest satellite contract just over a year ago from the National Reconnaissance Office, the highly secretive agency in charge of buying satellites for the Pentagon and the Central Intelligence Agency.

Martin Marietta and Lockheed, based in Calabasas, Calif., protested that the bidding process was flawed.

There were other complaints, too. In September, the House Appropriations Committee criticized the NRO for awarding the program without congressional approval -- something it was specifically told not to do in a conference report accompanying the 1993 Defense Appropriations Act.

In a highly unusual move, the General Accounting Office canceled the contract and ordered the companies to redo their bids entirely. The GAO is the investigative arm of Congress.

Officials from all three companies declined to comment.

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