Pentagon says Raytheon making progress on satellite control station

SIMI VALLEY, Calif. (Reuters) - Raytheon Co is making progress on a long-delayed program for new ground control stations for next-generation GPS satellites, although it is lagging a remedial schedule agreed with military officials, the Pentagon's chief arms buyer said. "It's actually making progress," Defense Undersecretary Frank Kendall told Reuters during the annual Reagan National Defense Forum in southern California. "They've lost some schedule from what we had targeted for them, but not a dramatic amount. I believe they will get there." Kendall said he would meet Raytheon Chief Executive Tom Kennedy for another high-level quarterly review of the program next month. Kendall decided in October to continue work on Raytheon's Operational Control System (OCX) program after a mandatory live-or-die review triggered when the program breached critical cost thresholds earlier this year. At the time, Kendall said he concluded the program was needed for national security and there were no alternatives that offered acceptable capability to meet requirements at less cost. Raytheon has vowed to continue working closely with the Air Force and the Pentagon to ensure the success of the program, which saw costs increase sharply due to increased cybersecurity equipment and other technical issues. Kendall's latest comments were more upbeat than in July, when he told reporters that Raytheon's work on the program was "a mixed bag", showing progress in some areas but continuing problems in others. The Pentagon earlier this year said the estimated cost of the OCX program has rise 16.3 percent, or $586.4 million, to $4.2 billion in 2015, even before a two-year delay that would further inflate costs. (Reporting by Andrea Shalal; Editing by Nick Macfie)