The original Iridium business plan always had the US government as a major purchaser of Iridium services with several General Accounting Office contracts let whereby most Federal agencies could buy Iridium phones directly.
The contract includes options which, if exercised, would bring the cumulative value of this contract to $252 million and extend the period of performance to December 2007.
The Department has taken this action because the Iridium system offers state-of-the-art technology. It features on-satellite signal processing and inter-satellite crosslinks allowing satellite-mode service to any open area on earth. It provides mobile, cryptographically secure telephone services to small handsets anywhere on the globe, pole-to-pole, 24 hours a day. The system and its DoD enhancements will provide handheld service currently not available.
Since the Navy has a requirement more than twice as large as the current capability, the Department of Defense needs the capacity Iridium uniquely offers small unit operations in areas without satellite constellation coverage or during periods when various assets are being used in other contingencies. Special Forces operations, combat search and rescue activities and polar communications will also be enhanced. Iridium will provide a unique resource to enhance DoD mobile satellite communications requirements.
"Iridium will not only add to our existing capability, it will provide a commercial alternative to our purely military systems. This may enable real civil/military dual use, keep us closer to the leading edge technologically, and provide a real alternative for the future," said Dave Oliver, principal deputy undersecretary of Defense (Acquisition, Technology and Logistics).
Iridium Satellite LLC is now purchasing the operating assets of Iridium LLC and its existing subsidiaries, pursuant to a Nov. 22, 2000 order of the U.S. Bankruptcy Court for the Southern District of New York. Under the agreement, Iridium Satellite LLC will purchase all of the existing assets of Iridium LLC, including its constellation of low-orbiting satellites and its satellite control network, and will have Boeing operate the system. The new "bulk rate" service agreement offered and accepted by the Department stands to provide the same critical augmentation capability at substantially cheaper rates.
Early next year, Iridium will offer a classified capability. Classified service will not only be provided for users already registered to the DoD gateway, but will also be extended to new users from DoD, other federal agencies, and selected allied governments.