The U.S. Air Force on Monday said it was working with Lockheed Martin Corp and Boeing Co to harvest for future use any government-owned property or ground stations developed for a canceled satellite communications program.

Gary Payton, deputy undersecretary of the Air Force for space programs, told reporters the Air Force had already spent $2.5 billion during two to three years of initial developmental work on the Transformational Satellite (TSAT) program, and hoped to use some of the technologies developed for TSAT in future programs.

He said the program's original mission -- to provide follow-on protected satellite communications for selected U.S. government communications, including the president's ability to order a nuclear attack -- remained absolutely critical.

We're never going to be out of that business. We're not going to back away from that job, the Air Force official said.

Lockheed and Boeing, which have been competing for the TSAT contract, had both been awarded risk reduction contracts to ensure that the technologies involved were mature once the government was ready to award a contract to one winner.

Defense Secretary Robert Gates last month announced the program would be canceled. The program had already been scaled back from its initial ambitious goals.

Now the Air Force plans to buy more Advanced Extremely High Frequency (AEHF) satellites, built by Lockheed, and more Wideband Global SATCOMM (WGS) satellites, built by Boeing.

The Air Force is working hard to collect what is rightfully the government's so that we can do competent planning for potential future evolutions of other systems, Payton said.

He said the Air Force would seek to take control over everything from intellectual property developed under its pre-development contracts with Lockheed and Boeing, to ground stations to networking equipment.

The Pentagon's fiscal 2010 budget proposal includes $11.1 billion for space programs, a 3 percent rise from fiscal 2009.

Payton said an increasing area of focus was protection of U.S. satellites in space, and space situational awareness -- efforts to better track objects in space, predict possible collisions and understand any problems that arise.

The budget proposal includes $7 billion for satellites, including $1.8 billion for the AEHF satellite program and $1.4 billion for launching satellites into space.

The proposal also includes $308 million for space situational awareness systems.

The budget does not include many new starts, but Payton said the Air Force expected to make decisions within the next year on how to meet growing demand for space-based radar, and would continue with additional AEHF and WGS procurement.

He said broad issues associated with space programs would be addressed during a congressionally mandated space-posture review that was being done in tandem with the Pentagon's Quadrennial Defense Review.

He said Lockheed's AEHF program experienced a disappointing significant number of piece part failures on its first satellite, but those issues had been resolved for the second satellite. The first satellite is due to begin thermal vacuum testing soon and should be ready for launch in September 2010.

Payton said work was going well on the Global Positioning System follow-on satellites, and the Air Force planned to award a contract this summer for a next-generation ground control system. Northrop Grumman Corp and Raytheon Co are competing for the contract.

Another pre-development contract was also expected for the so-called space fence, a system of ground-based radars and sensors that track objects in space, a program for which Lockheed, Northrop and Raytheon are competing, officials said.

The Air Force was also continuing work on smaller, more quickly launched satellites, and would have a critical design review this summer of SAT-1, a small satellite requested by U.S. Central Command to do low earth orbit infrared imaging.

(Reporting by Andrea Shalal-Esa; Editing by Gary Hill)