By Andrea Shalal-Esa
WASHINGTON (Reuters) - The U.S. Air Force on Monday said it took steps to fully fund the first increment of a new ground-based radar to track satellites and other objects in space in its fiscal 2014 budget proposal, but there was no funding for a second site for now.
Jamie Morin, acting undersecretary of the Air Force, told reporters the Space Fence program was a priority given growing threats in space and the need to monitor activities in space.
"Space Fence is as solid as any program can be in the fiscal environment we're in right now," Morin, who also serves as the Air Force's top budget official, told reporters.
The new program will allow the Air Force to sharply increase its ability to track "space junk" and other smaller objects in space. Currently the Air Force tracks about 23,000 of an estimated 500,000 objects in space, but the new program would allow it to track hundreds of thousands of additional objects.
The Pentagon's unclassified budget proposes spending a total of $8 billion on space operations in fiscal 2014, about the same level as in fiscal 2013, including $400.3 million in research and development funding for Space Fence and a joint program with Australia to base a C-Band radar in the Southern Hemisphere.
Lockheed Martin Corp and Raytheon Co are competing for a contract to develop and build the Space Fence radar. Officials had hoped to fund a second Space Fence site in Australia, but there was no funding earmarked for that effort at this point, Morin said.
Last week, the head of Air Force Space Command said a contract award had been expected in the next month or two, but the program could be vulnerable to cuts in fiscal 2015, given competing demands for other Air Force programs.
On Monday, Morin said Space Fence was safe for now, although he said "everything's vulnerable" in the current budget climate.
He said space programs were showing improvement after years of cost overruns and schedule delays. Acquisition reforms, including plans to buy several satellites at a time, had allowed officials to cut costs on programs as they entered production.
He said the Air Force believed it could cut $1 billion from projected costs for Lockheed's Advanced Extremely High Frequency satellite program over the next five years, with another $500 million to be trimmed from Lockheed's missile warning program, the Space-Based Infrared Satellite (SBIRS), in the same period.
But across-the-board budget cuts in fiscal 2013 - and the threat of additional cuts in coming years - threatened to undermine the stability the big-ticket programs needed to allow cost-reduction efforts to continue, Morin said.
He said the Air Force was doing all it could to avoid breaking multiyear contracts for new missile-warning, secure communications and other satellites.
But damage to space programs would be "unavoidable" if Congress fails to avert further across-the-board reductions in planned Pentagon spending in fiscal 2014 and beyond, Morin said.
"We're not anticipating breaking contracts in 2013, but we've consumed essentially all the flex within the system," he said, adding that additional sequestration cuts in fiscal 2014 or later would do "serious damage" to space programs.
Air Force officials said they expected decisions in coming years about new acquisition approaches for next-generation weather, secure communications and missile-warning satellites, including pay-for-service plans, loading sensors onto other satellites, and buying more smaller, less complex satellites.
U.S. satellite and rocket builders are jockeying to benefit from shifting Air Force procurement plans.
Morin said the studies on procurement were largely classified, but in general, they endorsed moving beyond the purchase of a handful of "extremely expensive assets," and pursuing "a variety of different additional concepts for getting at mission areas."
Brigadier General Robert McMurry, director of space programs for the Air Force, said military officials were also closely examining their requirements for new satellites.
Richard McKinney, Air Force deputy undersecretary for space, cautioned that new approaches could in some cases turn out to be more expensive than the current use of fewer large satellites.
"One does need to have a reasonable level of skepticism about the new ideas that come in," Morin added, when asked about a proposed venture to sell weather data as a service from a dozen commercially launched small satellites.
A new start up, PlanetIQ, backed by Moog Inc, plans to launch 12 75-kilogram satellites that it says would provide more accurate real-time weather data than current satellites.
(This story corrects spelling of general's name to McMurry In 18th paragraph)
(Reporting By Andrea Shalal-Esa; Editing by Eric Beech)