Raytheon to Replace GPS OCX Hardware Under Gov't-Directed $378M Contract Amendment

Raytheon (NYSE: RTN) has secured a potential $378M contract modification from the U.S. Space Force to replace computing hardware in the next-generation ground control segment for GPS satellites.

The project will involve replacement of the IBM-built (NYSE: IBM) Operational Control System computer with a platform from Hewlett Packard Enterprise (NYSE: HPE) to address a cybersecurity risk identified by the government, the Air Force said Saturday.

GPS OCX was built with the x86 product line sold by IBM to Chinese technology firm Lenovo. Although the Committee on Foreign Investment in the U.S. cleared the sale in August 2014, the federal government determined at the time that the divestment would pose a cyber risk and decided to wait for Raytheon to reach milestones in the OCX program prior to ordering the replacement.

The government ordered the contract amendment in a move to increase system performance and ensure program support.

“Over the last two and a half years, since OCX came out of its Nunn McCurdy breach, Raytheon has been executing as planned, giving us confidence in OCX’s ability to transition into operations,” said Lt. Gen. John Thompson, commander of the Space and Missile Systems Center.

“Software development completed last fall and the program is in the integration and test phase. In less than a year, Raytheon will deliver a qualified software baseline capable of operating the GPS constellation.”

HPE was selected to replace the IBM hardware following a government-sponsored hardware trade study in 2017.

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