Japanese satellite manufacturer Mitsubishi Electric Corp (Melco) has been banned from bidding for space and defence contracts, after the company admitted it overcharged the government and some agencies for expenses.
In mid-January, Japan’s Ministry of…
Japanese satellite manufacturer Mitsubishi Electric Corp (Melco) has been banned from bidding for space and defence contracts, after the company admitted it overcharged the government and some agencies for expenses.
In mid-January, Japan’s Ministry of Defense (MoD), the Cabinet Satellite Intelligence Center (CSICE) and Japan Aerospace Exploration Agency (JAXA) started questioning costs at Melco’s Kamakura Works facility.
Shortly after, the manufacturer admitted that it overcharged the three parties “by shifting work records among different orders” at Kamakura Works.
As a result, it was decided that Melco would be suspended from bidding with JAXA and the MoD until “payments for excessive charges and other expenses are returned to the central government treasury and remedial measures are put in place and reported to JAXA and MoD”.
Regarding contracts with CSICE as well as with the National Institute of Information and Communications Technology, the suspension is effective for up to 18 months.
The company pointed out that the total amount of overcharge, the timing of reimbursing the treasury and the impact on its performance were uncertain.
But it added that it would disclose “the impact as soon as the situation is better understood.”
Reports estimate that the manufacturer signed contracts worth a total of Y132bn (US$1.6bn) in 2010, including Y101.6bn (US$1.3bn) with the MoD only.
In March last year, Melco was awarded the US$600m turnkey contract to construct the Turksat 4A and 4B satellites, in what represented the company’s largest commercial satellite order to date.
