In Death Of Spy Satellite Program, Lofty Plans And Unrealistic Bids

By May 2002, the government’s effort to build a technologically audacious new generation of spy satellites was foundering.

The logo Boeing used for its troubled satellite project.

The contractor building the satellites, Boeing, was still giving Washington reassuring progress reports. But the program was threatening to outstrip its $5 billion budget, and pivotal parts of the design seemed increasingly unworkable. Peter B. Teets, the new head of the nation’s spy satellite agency, appointed a panel of experts to examine the secret project, telling them, according to one member, “Find out what’s going on, find the terrible truth I suspect is out there.”

The panel reported that the project, called Future Imagery Architecture, was far behind schedule and would most likely cost $2 billion to $3 billion more than planned, according to records from the satellite agency, the National Reconnaissance Office.

Even so, the experts recommended pressing on. Just months after the Sept. 11 terrorist attacks, and with the new satellites promising improved, more frequent images of foreign threats like terrorist training camps, nuclear weapons plants and enemy military maneuvers, they advised Mr. Teets to seek an infusion of $700 million.

It took two more years, several more review panels and billions more dollars before the government finally killed the project — perhaps the most spectacular and expensive failure in the 50-year history of American spy satellite projects. The story behind that failure has remained largely hidden, like much of the workings of the nation’s intelligence establishment.

But an investigation by The New York Times found that the collapse of the project, at a loss of at least $4 billion, was all but inevitable — the result of a troubled partnership between a government seeking to maintain the supremacy of its intelligence technology, but on a constrained budget, and a contractor all too willing to make promises it ultimately could not keep.

“The train wreck was predetermined on Day 1,” said A. Thomas Young, a former aerospace executive who led a panel that examined the project.

The Future Imagery project is one of several satellite programs to break down in recent years, leaving the United States with outdated imaging technology. But perhaps more striking is that the multiple failures that led to the program’s demise reveal weaknesses in the government’s ability to manage complex contracts at a time when military and intelligence contracting is soaring.

The Times’s examination found that the satellite agency put the Future Imagery contract out for bid in 1998 despite an internal assessment that questioned whether its lofty technological goals were attainable given the tight budget and schedule.

Boeing had never built the kind of spy satellites the government was seeking. Yet when Boeing said it could live within the stringent spending caps imposed by Congress and the satellite agency, the government accepted the company’s optimistic projections, a Panglossian compact that set the stage for many of the travails that followed. Despite its relative inexperience, Boeing was given responsibility for monitoring its own work, under a new government policy of shifting control of big military projects to contractors. At the same time, the satellite agency, hobbled by budget cuts and the loss of seasoned staff members, lacked the expertise to make sound engineering evaluations of its own.

The satellites were loaded with intelligence collection requirements, as numerous intelligence and military services competed to influence their design. Boeing’s initial design for the optical system that was the heart of one of the two new satellite systems was so elaborate that optical engineers working on the project said it could not be built. Engineers constructing a radar-imaging unit at the core of the other satellite could not initially produce the unusually strong radar signal that was planned.

A torrent of defective parts, like gyroscopes and electric cables, repeatedly stalled work. Even an elementary rule of spacecraft construction — never use tin because it deforms in space and can short-circuit electronic components — was violated by parts suppliers.

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