The Ministry of Defence has delayed a decision on a satellite contract worth roughly £2bn–£2.4bn, according to the Financial Times.
The contest covers two new satellites for the Skynet 6 Wideband Satellite System, intended to carry secure UK military communications into the 2040s, with procurement having begun in May 2023 before Airbus Defence and Space UK and Lockheed Martin UK submitted bids.
Airbus has built the UK's Skynet satellites since 2007, including its predecessor EADS Astrium, and separately won the Skynet 6A contract in 2020.
Industry sources said earlier this month that the MoD had provisionally favoured Lockheed Martin over the incumbent, though the department has repeatedly said no final decisions have been made.
The industrial stakes are significant: Lockheed has proposed an £85m factory in north-east England that could create about 500 jobs, while Airbus has warned that losing the contract could put up to 3,000 UK jobs at risk.
Former defence secretary Ben Wallace warned that handing the work to Lockheed could cause "irreversible damage" to the UK space sector.
The dispute has turned political, with concerns centred on whether the award would shift a long-standing sovereign capability toward a US-led supplier and reliance on American contractors.
The MoD's position remains that the procurement is ongoing, with bid deadlines having lapsed before ministers completed the award.
