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Lockheed wins $1.9 billion deal for U.S. missile-warning satellites

A Lockheed Martin F-35B Lightning II joint strike fighter flies toward its new home at Eglin Air Force Base, Florida in this U.S. Air Force picture taken on January 11, 2011. REUTERS/U.S. Air Force/Staff Sgt. Joely Santiago/Handout

WASHINGTON (Reuters) - The U.S. Air Force said on Tuesday it had awarded Lockheed Martin Corp a fixed-price contract valued at $1.9 billion to complete work on two missile-warning satellites as part of the Space-Based Infrared System (SBIRS).

The contract, announced in the Pentagon's daily digest of major contract awards, runs through Sept. 30, 2022.

It funds completion of the fifth and sixth satellites in the SBIRS system, and includes performance incentives and options for acoustic testing, launch operations an early on-orbit testing, the Pentagon said.

U.S. Air Force Space Command's Space and Missile Systems Center said the contract award saved over $1 billion as a result of a block-buy contracting approach and production and management efficiencies.

"We eliminated unnecessary layers of program oversight and contract reporting, restructured our test program and streamlined the production schedules," Colonel Mike Guetlein, production program manager, said in a statement.

The contract comes on top of advanced procurement funding awarded to Lockheed in 2012 and 2013 to start buying parts that take a long time to order. It will also fund completion of the associated ground operations and processing updates.

SBIRS is a new U.S. strategic missile warning system that replaced the 1970s Defense Support Program satellites. It provides continuous early warning of ballistic missile launches and other infrared surveillance to U.S. leaders.

It includes a mix of satellites in geostationary (GEO) orbit, sensors on other satellites in highly elliptical orbit, and ground hardware and software. The first two GEO satellites started operations in 2013. The third GEO satellite is in testing and the fourth is in final assembly, Lockheed said.

(Reporting by Andrea Shalal; Editing by Andre Grenon and Stephen Coates)