Unmanned Aircraft Systems
New DOD Programs Can Learn from Past Efforts to Craft Better and Less Risky Acquisition Strategies Gao ID: GAO-06-447 March 15, 2006Through 2011, the Department of Defense (DOD) plans to spend $20 billion to significantly increase its inventory of unmanned aircraft systems, which are providing new intelligence, surveillance, reconnaissance, and strike capabilities to U.S. combat forces--including those in Iraq and Afghanistan. Despite their success on the battlefield, DOD's unmanned aircraft programs have experienced cost and schedule overruns and performance shortfalls. Given the sizable planned investment in these systems, GAO was asked to review DOD's three largest unmanned aircraft programs in terms of cost. Specifically, GAO assessed the Global Hawk and Predator programs' acquisition strategies and identified lessons from these two programs that can be applied to the Joint Unmanned Combat Air Systems (J-UCAS) program, the next generation of unmanned aircraft.
While the Global Hawk and Predator both began as successful demonstration programs, they adopted different acquisition strategies that have led to different outcomes. With substantial overlap in development, testing, and production, the Global Hawk program has experienced serious cost, schedule, and performance problems. As a result, since the approved start of system development, planned quantities of the Global Hawk have decreased 19 percent, and acquisition unit costs have increased 75 percent. In contrast, the Predator program adopted a more structured acquisition strategy that uses an incremental, or evolutionary, approach to development--an approach more consistent with DOD's revised acquisition policy preferences and commercial best practices. While the Predator program has experienced some problems, the program's cost growth and schedule delays have been relatively minor, and testing of prototypes in operational environments has already begun. Since its inception as a joint program in 2003, the J-UCAS program has experienced funding cuts and leadership changes, and the recent Quadrennial Defense Review has directed another restructuring into a Navy program to develop a carrier-based unmanned combat air system. Regardless of these setbacks and the program's future organization, DOD still has the opportunity to learn from the lessons of the Global Hawk and Predator programs. Until DOD develops the knowledge needed to prepare solid and feasible business cases to support the acquisition of J-UCAS and other advanced unmanned aircraft systems, it will continue to risk cost and schedule overruns and delaying fielding capabilities to the warfighter.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-06-447, Unmanned Aircraft Systems: New DOD Programs Can Learn from Past Efforts to Craft Better and Less Risky Acquisition Strategies
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Report to the Committee on Armed Services, U.S. Senate:
United States Government Accountability Office:
GAO:
March 2006:
Unmanned Aircraft Systems:
New DOD Programs Can Learn from Past Efforts to Craft Better and Less
Risky Acquisition Strategies:
GAO-06-447:
GAO Highlights:
Highlights of GAO-06-447, a report to the Committee on Armed Services,
U.S. Senate:
Why GAO Did This Study:
Through 2011, the Department of Defense (DOD) plans to spend $20
billion to significantly increase its inventory of unmanned aircraft
systems, which are providing new intelligence, surveillance,
reconnaissance, and strike capabilities to U.S. combat forces”including
those in Iraq and Afghanistan.
Despite their success on the battlefield, DOD‘s unmanned aircraft
programs have experienced cost and schedule overruns and performance
shortfalls. Given the sizable planned investment in these systems, GAO
was asked to review DOD‘s three largest unmanned aircraft programs in
terms of cost. Specifically, GAO assessed the Global Hawk and Predator
programs‘ acquisition strategies and identified lessons from these two
programs that can be applied to the Joint Unmanned Combat Air Systems
(J-UCAS) program, the next generation of unmanned aircraft.
What GAO Found:
While the Global Hawk and Predator both began as successful
demonstration programs, they adopted different acquisition strategies
that have led to different outcomes. With substantial overlap in
development, testing, and production, the Global Hawk program has
experienced serious cost, schedule, and performance problems. As a
result, since the approved start of system development, planned
quantities of the Global Hawk have decreased 19 percent, and
acquisition unit costs have increased 75 percent. In contrast, the
Predator program adopted a more structured acquisition strategy that
uses an incremental, or evolutionary, approach to development”an
approach more consistent with DOD‘s revised acquisition policy
preferences and commercial best practices. While the Predator program
has experienced some problems, the program‘s cost growth and schedule
delays have been relatively minor, and testing of prototypes in
operational environments has already begun.
Since its inception as a joint program in 2003, the J-UCAS program has
experienced funding cuts and leadership changes, and the recent
Quadrennial Defense Review has directed another restructuring into a
Navy program to develop a carrier-based unmanned combat air system.
Regardless of these setbacks and the program‘s future organization, DOD
still has the opportunity to learn from the lessons of the Global Hawk
and Predator programs. Until DOD develops the knowledge needed to
prepare solid and feasible business cases to support the acquisition of
J-UCAS and other advanced unmanned aircraft systems, it will continue
to risk cost and schedule overruns and delaying fielding capabilities
to the warfighter.
[See PDF for image]
[End of figure]
What GAO Recommends:
GAO recommends that DOD (1) limit Global Hawk production until the
program demonstrates an integrated system and develops a new business
case to justify future investments and (2) develop a sound business
case and acquisition strategy for J-UCAS and follow-on efforts to
ensure cost and schedule goals are met. DOD did not concur with our
Global Hawk recommendations because it believes it is taking
appropriate measures to manage risk.
www.gao.gov/cgi-bin/getrpt?GAO-06-447.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Michael J. Sullivan at
(202) 512-4841 or sullivanm@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Global Hawk and Predator Had Common Beginnings, but Different
Acquisition Strategies Have Yielded Different Outcomes:
J-UCAS Program Can Benefit from Lessons Learned by Global Hawk and
Predator Programs:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Scope and Methodology:
Appendix I: Unmanned Aircraft Systems Included in This Review:
Appendix II: Comments from the Department of Defense:
Related GAO Products:
Tables:
Table 1: Defense Budget Requests for Unmanned Aircraft Systems:
Table 2: Changes in Global Hawk Funding, Quantity, and Unit Costs
through Completion of the Program:
Table 3: Changes in Predator B Funding, Quantity, and Unit Costs
through Completion of the Program:
Table 4: Comparison of Business Case and Acquisition Strategy Factors
in Current Global Hawk and Predator Programs:
Figures:
Figure 1: Comparison of Predator B and Global Hawk Acquisition Plans
with Best Practices Model:
Figure 2: Performance Characteristics of Unmanned Aircraft Systems
Reviewed by GAO:
Abbreviations:
ACTD: advanced concept technology demonstration:
DARPA: Defense Advanced Research Projects Agency:
DOD: Department of Defense:
J-UCAS: Joint Unmanned Combat Air Systems:
OSD: Office of the Secretary of Defense:
United States Government Accountability Office:
Washington, DC 20548:
March 15, 2006:
The Honorable John W. Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
Through 2011, the Department of Defense (DOD) plans to spend $20
billion to develop, procure, and support a rapidly increasing inventory
of unmanned aircraft systems.[Footnote 1] Unmanned aircraft systems are
providing combat forces--including those in Iraq and Afghanistan--with
new intelligence, surveillance, reconnaissance, and strike capabilities
that are helping to transform today's military operations. The success
of unmanned aircraft has led to greatly increased demand for new and
improved platforms to be deployed into the field. While there have been
successes on the battlefield, the development of unmanned aircraft
systems has shared the same problems as other major weapon systems that
begin an acquisition program too early, with many uncertainties about
requirements, technology, design, and production. Likewise, the
unmanned systems have also experienced similar outcomes-
-changing requirements, cost growth, delays in delivery, and
reliability and support problems.
Because of the expanding interest and promise in unmanned systems and
sizable future investments, you asked us to review the Global Hawk,
Predator, and Joint Unmanned Combat Air Systems--DOD's three largest
unmanned aircraft programs in terms of cost. Specifically, you asked us
to (1) assess the Global Hawk and Predator programs' business cases and
acquisition strategies in terms of delivering their weapon systems on
time and within cost, and (2) identify any lessons that can be learned
and applied to the Joint Unmanned Combat Air Systems (J-UCAS) program
as it moves forward to develop a supportable business case and
effective acquisition strategy.[Footnote 2]
To assess these two objectives, we reviewed Global Hawk and Predator
acquisition strategies and business cases and evaluated them according
to best practices criteria utilizing GAO's Methodology for Assessing
Risks on Major Weapons System Acquisition Programs. We assessed budget,
programmatic, and planning documents to determine the extent to which
acquisition strategies were meeting warfighter requirements. We
identified lessons learned from these and other programs and identified
common factors that can contribute to J-UCAS's success. We interviewed
DOD and contractor officials and obtained programmatic data for these
three systems. We leveraged prior work on other systems and on best
practices of leading companies. We performed our review from August
2005 to February 2006 in accordance with generally accepted government
auditing standards.
Results in Brief:
The Global Hawk and Predator programs followed different acquisition
strategies that resulted in different outcomes. While both programs
began with top leadership support and accomplished successful, focused
demonstration efforts, Global Hawk switched to a high-risk acquisition
strategy by accelerating development and production of a new larger and
more advanced aircraft. With the substantial overlap in development and
production, the program experienced significant gaps in knowledge about
technology, design, and manufacturing capabilities while requiring
sizable funding. As a result, serious cost and schedule problems have
ensued, some required capabilities have been deferred or dropped,
operational tests have identified performance problems, and the Global
Hawk program is being restructured. In contrast, the Predator program,
which has also added a new, larger and more advanced aircraft, has
pursued an acquisition strategy that is more structured and
evolutionary and more consistent with DOD's revised acquisition
guidance and commercial best practices. While the Predator effort to
acquire its larger model also has overlap in development and production
and has experienced some problems, cost growth and schedule delays to
date have been more moderate than those of Global Hawk, and flight
testing of prototypes in operational environments has already begun.
The J-UCAS program and its offspring could benefit from the lessons
learned in the Global Hawk and Predator programs. Since its inception,
the J-UCAS program has been in flux. Program management and goals have
changed several times, and the recent Quadrennial Defense Review has
directed another restructuring into a Navy program to demonstrate a
carrier-based, air-refuelable unmanned combat air system. The Air Force
plans to consider J-UCAS technologies and accomplishments in its
efforts to develop a new long-range strike capability. Before DOD
commits to major acquisition system development programs, it has the
opportunity and time to develop the knowledge needed to prepare solid
and feasible business cases and to adopt a disciplined, evolutionary
strategy consistent with DOD acquisition policy preferences and best
practices.
We are recommending that the Secretary of Defense direct the Air Force
to limit the production of Global Hawk B aircraft until integrated
systems are demonstrated in testing and that the Global Hawk office
update its business case to reflect the restructured program and
justify future investments. We are also recommending that the Secretary
direct the Navy and Air Force to advance with prudence in J-UCAS and
follow-on efforts to ensure a sound business case and evolutionary,
knowledge-based strategy guide any future programs and that the
services remain committed to developing common components and operating
systems to be more cost-effective and interoperable. DOD concurred with
our J-UCAS recommendations, but did not concur with our Global Hawk
recommendations. DOD stated that limiting Global Hawk production will
incur significant costs and schedule delays, that risk and concurrency
are being adequately managed, and that ongoing cost and evaluation
efforts are thorough. We continue to believe that limiting Global Hawk
procurement to allow technology to mature and thorough testing to occur
will reduce future problems and lead to better program outcomes. Given
the magnitude of changes and challenges facing the program, we also
believe a comprehensive business case to justify and guide investments
is needed.
Background:
DOD expects unmanned aircraft systems to transform the battlespace with
innovative tactics, techniques, and procedures and take on the so-
called "dull, dirty, and dangerous missions" without putting pilots in
harm's way. The use of unmanned aircraft systems in military operations
has increased rapidly since the fall of 2001, with some notable
successes. Potential missions considered appropriate for unmanned
systems have expanded from the original focus on the intelligence,
surveillance, and reconnaissance mission area to limited tactical
strike capabilities with projected plans for persistent ground attack,
electronic warfare, and suppression of enemy air defenses. The Global
Hawk, Predator, and Joint Unmanned Combat Air Systems are DOD's three
largest unmanned aircraft programs in terms of cost. (For more details
on the three systems and their performance characteristics, see app.
I.)
Since the terror attacks in September 2001, defense investments in
unmanned aircraft systems have exponentially increased. In the 10 years
prior to the attacks, DOD invested a total of about $3.6 billion
compared to the nearly $24 billion it plans to invest in the subsequent
10 years. DOD currently has about 250 unmanned aircraft in inventory
and plans to increase its inventory to 675 by 2010 and to 1,400 by
2015. (These numbers are the larger systems and do not count numerous
small and hand-launched systems used by ground forces.)
In the fiscal year 2001 Defense Authorization Act, Congress set a goal
that by 2010, one-third of DOD's deep strike force will be unmanned in
order to perform this dangerous mission;[Footnote 3] this would
significantly increase the number of unmanned aircraft in DOD's
inventory. In addition, foreign countries and other federal agencies,
including the Department of Homeland Security and the Interior
Department, are expressing interest in unmanned aircraft systems. Table
1 shows the funding in the fiscal year 2006 Defense budget for
research, development, procurement, and support of current and planned
unmanned aircraft systems.
Table 1: Defense Budget Requests for Unmanned Aircraft Systems:
(in millions of dollars by year of appropriation).
Development and procurement;
2005: $1,998.5;
2006: $1,670.3;
2007: $1,734.8;
2008: $1,983.8;
2009: $2,550.0;
2010: $2,643.4;
2011: $2,771.1;
Total: $15,351.9.
Operations[A];
2005: $167.3;
2006: $275.4;
2007: $338.7;
2008: $265.6;
2009: $295.4;
2010: $308.6;
2011: $342.0;
Total: $1,993.0.
Basic and applied research[B];
Total: $2,553.0.
Total;
2005: $2,165.8;
2006: $1,945.7;
2007: $2,073.5;
2008: $2,249.4;
2009: $2,845.4;
2010: $2,952.0;
2011: $3,113.1;
Total: $19,897.9.
Source: "Unmanned Aircraft Systems Roadmap 2005-2030," Office of the
Secretary of Defense.
[A] Does not include 2005 supplemental funding for combat operations.
[B] Annual breakdown of basic and applied research funding is not
provided.
[End of table]
The 2006 Quadrennial Defense Review contained a number of decisions
that would further expand investments in unmanned systems and their use
in military operations. The report states DOD's intent to nearly double
unmanned aircraft coverage by accelerating the acquisition of the
Predator and the Global Hawk. It also restructures the J-UCAS program
to develop an unmanned, long-range carrier-based aircraft to increase
naval reach and persistence. It further establishes a plan to develop a
new land-based, penetrating long-range strike capability by 2018 and
sets a goal that about 45 percent of the future long-range strike force
be unmanned. Officials told us that elements of the J-UCAS effort will
be considered in Air Force analyses and efforts supporting future long-
range strike capability.
Best Practices for Achieving Successful Acquisition Outcomes:
Unmanned aircraft systems are being developed under DOD's acquisition
policy, which emphasizes a knowledge-based, evolutionary approach to
acquiring major weapon systems. This approach separates technology
development from product development, as suggested by best practices.
In implementing the policy, a critical first step to success is
formulating a comprehensive business case that justifies the investment
decision to begin development. The business case should validate
warfighter needs and match product requirements to available resources,
including proven technologies, sufficient engineering capabilities,
adequate time, and adequate funds. Several basic factors are critical
to establishing a sound business case for undertaking a new product
development. First, the user's needs must be accurately defined,
alternative approaches to satisfying these needs properly analyzed, and
quantities needed for the chosen system must be well understood. The
developed product must be producible at a cost that matches the users'
expectations and budgetary resources. Finally, the developer must have
the resources to design the product with the features that the customer
wants and to deliver it when it is needed. If circumstances
substantially change, the business case should be revisited and revised
as appropriate. If the financial, material, and intellectual resources
to develop the product are not available, a program should not move
forward.
Best practices indicate that the business case is best accomplished
using an evolutionary (or incremental) approach that plans to deliver
an early but relevant capability first, followed by definable and
doable increments that ultimately achieve the full capability. Each
increment is expected to have its own decision milestones and baseline-
-cost, schedule, and performance requirements. An acquisition strategy
is the disciplined process employed by the service program office and
prime contractor to manage the acquisition, deliver knowledge at key
junctures to make further investments, and continue the program. The
strategy implements the business case; sets schedules for developing,
designing, and producing the weapon system; and establishes
exit/entrance criteria to guide acquisition managers and executives
through key program milestones to control and oversee the acquisition.
Global Hawk and Predator Had Common Beginnings, but Different
Acquisition Strategies Have Yielded Different Outcomes:
While the Global Hawk and Predator both began as successful advanced
concept technology demonstration (ACTD) programs, they have since
adopted different strategies in system development that have led to
different outcomes. The Global Hawk adopted a riskier acquisition
strategy that has led to significant cost, schedule, and performance
problems. Conversely, the Predator program pursued a more structured
and evolutionary strategy more consistent with DOD's acquisition policy
guidance and has thus far experienced fewer negative outcomes.
Global Hawk Program Has Experienced Relatively Poor Outcomes:
Following a successful ACTD, DOD approved an acquisition program in
2001 to incrementally develop and acquire systems similar to the
demonstrators, now designated the RQ-4A (Global Hawk A). In 2002, the
Global Hawk program was substantially restructured to more quickly
develop and field a new, larger, and more advanced aircraft, designated
the RQ-4B (Global Hawk B). The new acquisition strategy was now highly
concurrent, overlapping technology development, design, testing, and
production. Our November 2004 report on Global Hawk, raised concerns
about the revised strategy and its elevated risks of poor cost,
schedule, and performance outcomes. [Footnote 4] We recommended
limiting procurement to only those aircraft needed for testing to allow
product knowledge to more fully mature and the design and technologies
to be tested before committing resources to the full program. DOD
officials did not agree because, in their opinion, we overstated some
risks and they were effectively mitigating other risks.
The Global Hawk program is already experiencing problems that are
associated with high concurrency and gaps in product knowledge.
Production of the larger Global Hawk B aircraft began in July 2004 with
immature technologies and an unstable design. The design had been
expected to be very similar to the smaller Global Hawk A, whose
performance had been proven in the ACTD, but as the larger aircraft
design matured and production geared up, the differences were more
extensive, complex, and costly than anticipated. Within a year, there
were more than 2,000 authorized engineering drawing changes to the
total baseline of 1,400 drawings, and more than half were considered
major changes. Also, once manufacturing began, there were recurring
quality and performance issues on the work of several key
subcontractors. The subcontractor building the tail scrapped seven of
the first eight main structural components because of design changes
and manufacturing process deficiencies. The wing manufacturer had to
terminate a key subcontractor because of poor performance and quality.
Other suppliers delivered parts late and with defects. These specific
problems have mostly been resolved, but the potential for even greater
problems exists when the major subsystems, still in development, are
integrated into the new larger aircraft already being produced.
Outcomes so far have not been good, as the program has experienced
significant cost increases. Extensive design changes contributed to a
$209 million overrun in the development contract and resulted in a more
expensive production aircraft than forecast. Requirements growth,
increased costs of airframe and sensors, and increased support
requirements significantly increased procurement costs. In April 2005,
the Air Force reported to Congress a Nunn-McCurdy breach in procurement
unit costs--an 18 percent increase over the program's cost baseline
approved in 2002.[Footnote 5] In December 2005, we reported the Air
Force had failed to report $401 million in procurement costs and that
the procurement unit cost had actually increased 31 percent.[Footnote
6] Subsequently, in December 2005, the Air Force renotified Congress
that, if these additional costs were included, the procurement unit
costs had actually increased by over 25 percent and that program
acquisition unit costs (including development and military construction
costs in addition to procurement) had also breached the thresholds
established in the law. Under the law, DOD must now certify the program
to Congress.[Footnote 7] The Air Force is currently restructuring the
Global Hawk program--the fourth restructuring since it began as a major
acquisition.
Program schedules and performance have also been negatively affected.
For example, the start of operational assessment of the Global Hawk A
slipped about 1 year, and the planned start of initial operational
testing of the Global Hawk B design has slipped 2 years. The Director,
Operational Test and Evaluation, reports that operational assessment of
the Global Hawk A identified significant deficiencies in processing and
providing data to the warfighter, communication failures, and problems
with engine performance at high altitudes. In addition, planned
delivery dates have continued to slip, the procurement for two aircraft
were moved to later years, and some development work content was
deferred or deleted; this means that the warfighter will not get
anticipated capability at the time originally promised. For example,
defensive subsystems required by Air Combat Command have been pushed
off the schedule, and it is not known whether they will be added in the
future.
The frequent deployment of Global Hawk demonstrator aircraft to support
combat operations has further affected costs and schedule, according to
officials. Support to the warfighter is the program's top priority.
Deployments have resulted in increased costs and time delays for
acquisition but, at the same time, provide a valuable, realistic test
for the system and its employment concepts to improve its performance
and responsiveness to the warfighter. Fleet flying hours now exceed
8,000 hours, more than half in combat operations.
The following table shows changes in cost and quantities since the
program started in March 2001. The restructured program tripled
development costs, reflecting the addition of the new Global Hawk B
aircraft with advanced capabilities still in technology development.
Total procurement costs increased moderately, resulting from higher
costs for the new aircraft tempered by a reduction in the number of
aircraft to be acquired for reasons of affordability and changed
requirements. Total program acquisition and procurement unit costs have
increased 73 percent and 35 percent, respectively, and aircraft
quantities decreased by 19 percent. Thus far, seven Global Hawk As have
been delivered to the Air Force--14 percent of the combined fleet--and
34 percent of the planned budget to completion has been invested.
Table 2: Changes in Global Hawk Funding, Quantity, and Unit Costs
through Completion of the Program:
(in millions of base year 2006 dollars):
Cost: Development;
March 2001: $925.2;
January 2006: $2,459.1;
Changes: $1,533.9;
Percent: 166%.
Cost: Procurement;
March 2001: $3,836.2;
January 2006: $4,197.5;
Changes: $361.3;
Percent: 9%.
Cost: Total;
March 2001: $4,761.4;
January 2006: $6,656.6;
Changes: $1,895.2;
Percent: 40%.
Quantity: Aircraft;
March 2001: 63;
January 2006: 51;
Changes: -12;
Percent: -19%.
Quantity: Ground stations;
March 2001: 14;
January 2006: 10;
Changes: -4;
Percent: -29%.
Unit Costs: Total program;
March 2001: $75.6;
January 2006: $130.5;
Changes: $54.9;
Percent: 73%.
Unit Costs: Procurement only;
March 2001: $60.9;
January 2006: $82.3;
Changes: $21.4;
Percent: 35%.
Source: DOD data, GAO analysis.
Note: Procurement costs include costs for aircraft, ground stations,
support equipment, and spares. Military construction funding is not
included.
[End of table]
Predator Program Has Had Better Outcomes than Global Hawk:
The Predator program began in 1994 as an ACTD to demonstrate and
deliver what would become the MQ-1 (Predator A). It evolved from an
earlier unmanned aircraft, the Gnat, allowing delivery of an initial
demonstrator aircraft to DOD 6 months after contract award. The
Predator ACTD concluded in 1996 and transitioned to the Air Force in
1997 when the Defense Acquisition Board approved the Predator A for
production. A limited strike capability, to launch Hellfire missiles
against ground targets, was later added. On the basis of the success of
the Predator A, the contractor designed and built two prototypes of a
larger aircraft capable of armed reconnaissance and surveillance. This
new aircraft would evolve into the second generation MQ-9 (Predator B),
a larger and higher-flying aircraft with more strike capability. In
February 2004, the Predator B program was approved as a new system
development and demonstration program. It is managed separately from
Predator A and has its own schedule and management reviews.
The Predator program overall has experienced fewer cost, schedule, and
performance problems than the Global Hawk program has experienced. As
of February 2006, the Predator A program has a stable design with
little cost growth and the Air Force recently increased its planned
buys. Although early in the acquisition cycle, cost increases in the
Predator B program have been moderate and schedule changes few. The
fiscal year 2005 report of the Director, Operational Test and
Evaluation, cited favorable developmental testing results and
recommended refining acquisition and fielding strategies to permit more
focused and effective operational testing. To date, about 59 percent of
the combined fleet (as presented in last year's budget) has been
delivered for about 56 percent of the current planned budget.
Deliveries include 129 Predator As and 2 prototype and six production
Predator Bs. The combined fleet has tallied 120,000 flight hours since
1995. Congress has been supportive of both Predators, typically adding
to annual funding requests and quantities.
Table 3 summarizes changes in the Predator B program estimates to
completion since its start of system development.
Table 3: Changes in Predator B Funding, Quantity, and Unit Costs
through Completion of the Program:
Cost: Development;
February 2004: $153.6;
January 2006: $177.5;
Changes: $23.9;
Percent: 16%.
Cost: Procurement;
February 2004: $935.1;
January 2006: $1,031.9;
Changes: $96.8;
Percent: 10%.
Cost: Total;
February 2004: $1,088.7;
January 2006: $1,209.4;
Changes: $120.7;
Percent: 11%.
Quantity: Aircraft;
February 2004: 63;
January 2006: 63;
Changes: $0.0;
Percent: 0%.
Unit Costs: Total program;
February 2004: $17.3;
January 2006: $19.2;
Changes: $1.9;
Percent: 11%.
Unit Costs: Procurement only;
February 2004: $14.8;
January 2006: $16.4;
Changes: $1.5;
Percent: 10%.
Source: DOD data, GAO analysis.
Note: Procurement costs include costs for aircraft, ground stations,
support equipment, and spares. Military construction funding is not
included. Totals may not equal 100 because of rounding.
[End of table]
Differences in Global Hawk and Predator Business Practices Have
Contributed to the Programs' Outcomes to Date:
The Global Hawk and Predator began with top leadership support and
successful demonstration efforts as ACTDs, but differences in their
business practices have been the primary contributors to different
cost, schedule, and performance outcomes so far in these programs. Both
programs were under pressure to field capabilities quickly to support
the warfighter. Original models of both systems have proven to be
valuable assets in combat operations, and both transitioned from
technology demonstrations into weapon system acquisition programs with
sound strategies to complete development and acquire initial systems
with enhanced capabilities. However, Global Hawk subsequently changed
to a riskier acquisition strategy that plans to develop technologies
concurrently with the system design, testing, and production phases of
the program. Predator, while not immune to typical developmental
problems, has pursued a more disciplined, structured approach intended
to evolve new capability in separate programs. Its decisions have been
more consistent with DOD's acquisition policy preferences. Table 5
shows some of the differences of the current programs that have led to
greater success in the Predator program so far.
Table 4: Comparison of Business Case and Acquisition Strategy Factors
in Current Global Hawk and Predator Programs:
Acquisition factors: Acquisition strategy;
Global Hawk: Quantum leap;
Predator: Incremental.
Acquisition factors: Technologies;
Global Hawk: Immature;
Predator: Mostly mature.
Acquisition factors: Concurrency;
Global Hawk: Significant overlap of technology development, design,
testing, and production;
Predator: Moderate overlap of technology development, testing, and
production.
Acquisition factors: Leadership;
Global Hawk: Less directive and more risk-tolerant;
Predator: Direction to follow acquisition policy preferences.
Acquisition factors: Funding;
Global Hawk: Optimistic and compressed into a few years;
Predator: Moderate and balanced over time.
Source: GAO analysis of DOD program data.
[End of table]
Global Hawk's Acquisition Strategy Is More Risky than Predator's:
The current Global Hawk acquisition strategy is risky. It plans to
develop a new, larger, and more capable aircraft by integrating as yet
undemonstrated technologies into a new airframe, also undemonstrated,
to provide a quantum leap in performance over its ACTD. The Predator
also added plans for a new, larger aircraft, but chose an incremental
approach by managing the new investment in a separate program with
separate decision points.
The Global Hawk program began in 1994 as an ACTD, managed first by the
Defense Advanced Research Projects Agency and, since 1998, by the Air
Force. Seven demonstrator aircraft were built, logged several thousand
flight hours, completed several demonstrations and other tests, and
passed a military utility assessment. Demonstrators subsequently
provided effective support to military operations in Iraq and
Afghanistan. DOD judged the demonstration a success, but tests
identified the need to make significant improvements in reliability,
sensor performance, and communications before producing operationally
effective and suitable systems.
In March 2001, DOD approved the Global Hawk for a combined start of
system development and limited initial production of six aircraft. The
Air Force's acquisition strategy approached best practices standards in
terms of technology and design maturity. Officials planned to first
acquire basic systems very similar to the successful demonstrators and
then incrementally develop and acquire systems with more advanced
sensors as critical technologies were demonstrated, using the same
platform. Officials planned to acquire a total of 63 aircraft (Global
Hawk As), and 14 ground stations for mission launch, recovery, and
control. These aircraft would all be dedicated to single missions, some
having imagery intelligence capabilities and others having signals
intelligence capabilities.
In 2002, the Air Force radically restructured the Global Hawk program
to develop and acquire a larger and more advanced aircraft system, the
Global Hawk B. The decision to acquire the larger aircraft was driven
by the desire to have multimission capabilities (both signals
intelligence and imagery intelligence sensors on the same aircraft) and
to deliver new capabilities associated with advanced signals
intelligence and radar technologies still in development. The new
acquisition strategy abandoned an incremental approach and moved toward
a strategy that called for concurrent development of technologies,
systems integration, testing, and production. The Air Force planned to
set and approve requirements and mature technologies over time, instead
of at the start of development, and to do this at the same time as it
designed and produced the new larger and heavier aircraft that had
never been built or flight-tested.
For affordability reasons and changing requirements, the restructured
program also reduced quantities to 51 aircraft--7 Global Hawk As and 44
Global Hawk Bs--and 10 ground stations. Most of the Global Hawk Bs are
planned to have multimission capabilities, including the advanced
signals intelligence sensor, and some will have single-mission
capabilities, including the advanced radar. Low-rate production was
tripled from the 6 Global Hawk As approved at program start to 19
aircraft as restructured--7 Global Hawk As and 12 Global Hawk Bs--about
40 percent of the entire fleet. To speed up development and field these
new capabilities sooner, DOD also approved the program to streamline
and accelerate acquisition processes, bypassing some normal acquisition
policy requirements and controls when considered appropriate. For
example, the Global Hawk B business case did not include a
comprehensive analysis of alternatives that is intended to rigorously
compare expected capabilities of a new system with the current
capabilities offered by existing weapon systems, such as the signals
intelligence capabilities provided by U-2 aircraft.
Although the program could have reduced cost and schedule risks by
managing a series of discrete increments to develop and acquire the
different configurations, the Air Force chose to manage it as one
program, with one baseline and one set of decision milestones. This
revised strategy attempts to deliver capability to the warfighter that
significantly surpasses that of the former Global Hawk A program. And
the Air Force has committed up-front to produce the larger Global Hawk
B aircraft in order to deliver new capabilities to the warfighter
sooner, but the signals intelligence sensor and advanced radar
technologies critical to meeting requirements are still immature and
are not expected to be delivered and integrated until very late in the
program.
The Predator transitioned from its ACTD program in 1997, when the
Defense Acquisition Board approved the Predator A for production,
skipping the system development and design phases. The transition was
not without difficulty because the focus during the demonstration
effort had been to quickly ascertain operational capabilities, but
without emphasis on design and development aspects that make a system
more reliable and supportable--typically key aspects of a development
program. The Air Force had to organize a team to respond to these
issues until reliability and supportability issues could be resolved.
Senior leadership, however, kept the strategy simple and focused on
buying additional Predators very similar to the ACTD models.
In February 2004, the Predator B program was approved as a new system
development and demonstration program. The Predator B program was
approved without two fundamental elements of a good business case:
formal requirements documentation and an analysis of alternatives.
According to the Air Force, these were not prepared because of the
exigencies of the Global War on Terror. Officials initially planned to
adopt an acquisition strategy similar to the Global Hawk's, but senior
leadership intervened and the acquisition strategy adopted was
incremental and more consistent with DOD acquisition policy
preferences. Under the revised strategy, the Air Force manages the
Predator A and B acquisitions as separate programs. The new Predator B
program balanced requirements and resources for a first increment and
included its own sets of milestone decision points. Subsequent
increments will evolve when future requirements and resources can be
matched.
Figure 1 contrasts notional Predator B and Global Hawk schedules for
implementing their respective acquisition strategies with that espoused
by best practices and DOD acquisition policy. Predator's incremental
approach with less overlap of technology and system development is more
similar to best practices.
Figure 1: Comparison of Predator B and Global Hawk Acquisition Plans
with Best Practices Model:
[See PDF for image]
[End of figure]
Global Hawk's Technologies Are Much Less Mature than Predator's:
Critical technologies were not sufficiently mature to support the start-
up of the Global Hawk B program--particularly those associated with the
signals intelligence and advanced radar, the very capabilities that
drove the decision to acquire the larger aircraft. Likewise, the larger
and heavier aircraft was neither prototyped nor demonstrated. The
Predator B's technologies were mostly mature at program start, and the
aircraft has been built and flown. Mature technologies can leverage the
potential for success in development, providing early assurance that
the warfighter's requirements can be met within cost and schedule
goals.
Although Global Hawk A technologies were demonstrated in the ACTD, the
level of technology maturity significantly declined when Global Hawk B
was approved for development. In particular, the new signals
intelligence and multiplatform radar systems were still in technology
development, not expected to be mature and be tested in an operational
environment until sometime between 2009 and 2011. The spillover of
technology development into product development and overall immaturity
of technology increase risks of poor cost, schedule, and performance
outcomes. For example, as the advanced sensors mature and become ready
to be integrated into the aircraft, there is risk that the aircraft,
already being produced, will not have sufficient space, power, or
cooling or that the sensor systems will weigh more than planned,
reducing aircraft performance and ability to meet overall mission
requirements--altitude, speed, and endurance.
Predator A has been in production since 1997 and its technologies are
mature. All Predator B technologies, except for one, are mature. This
one meets the DOD standard for maturity--demonstration in a lab
environment--but has not yet met best practice standards that require
demonstrations in an operational environment. This technology is
important to manage the weapons that Predator B will carry and launch-
-more than those on Predator A. It relies on a data link that enables
the operator to release the weapon from the ground. Program officials
have stated that the current problems with this technology are related
to its integration into the Predator B weapon system. In unmanned
aircraft, unlike manned aircraft, there is no one in the cockpit to
fire the weapon. To develop this capability required revisions to
software, cryptologic controls, navigation sensors, and flight
operations. The Air Force expects this capability to be demonstrated in
an operational environment after it has been integrated into a Predator
B in May 2006.
Global Hawk and Predator Both Include Concurrent Development and
Production:
The Global Hawk's restructured program includes a significant overlap
of technology, design, and production. The Predator B program is also
concurrent, but to a lesser degree. Concurrency--the overlapping of
development, test, and production schedules--is risky and can be costly
and delay delivery of a usable capability to the warfighter if testing
shows design changes are necessary to achieve expected system
performance. Once in production, design changes can be an order of
magnitude greater than changes identified during the design phase.
By requiring a larger air vehicle to carry new advanced technologies
while speeding up the acquisition schedule, the Air Force accepted much
higher risks than the original plan, which followed a more evolutionary
approach. The Air Force restructured the Global Hawk program, extending
the development period, delaying testing, and accelerating aircraft
production and deliveries, resulting in substantial concurrency. The
development period was expanded by 5 years, and production deliveries
were accelerated and compressed to fewer years, creating significant
overlap from fiscal years 2004 to 2010. As a result, the Air Force
plans to buy almost half of the new larger Global Hawk aircraft before
a production model is flight-tested and operational evaluations are
completed to show that the air vehicle design works as required.
Substantially more than half of the aircraft will be purchased before
the airborne signals intelligence and multiplatform radar, the two
technologies that are required for the larger aircraft, complete
development and are integrated for flight testing.
The Predator B program's revised strategy also overlapped development
and production. For example, 21 Predator aircraft will be purchased
before initial operational test and evaluation has been completed. Air
Force officials acknowledge that the concurrency will require them to
modify about 10 of these aircraft to bring them up to the full first
increment capability. Modifications will include the installation of
the system to manage and launch weapons and the digital electronic
engine controller.
Different Leadership Approaches Have Influenced Outcomes in Both
Programs:
Top management attention set the stage for the early success of Global
Hawk. The Under Secretary of Defense for Acquisition, Technology, and
Logistics became personally involved in establishing the original plan
for development. Leadership insisted on fielding an initial capability
that could be developed within a fixed budget while providing for an
evolutionary process to add enhancements to succeeding versions. The
result was a very successful ACTD program that produced seven
demonstrators, logged several thousand flight hours, passed its
military usefulness assessment, and has since very effectively
supported combat operations in Afghanistan and Iraq. Once the Global
Hawk was approved as a major acquisition program, however, senior Air
Force leaders diverted Global Hawk to a high-risk spiral development
strategy that featured frequent changes to development plans and time
frames. They also approved the larger Global Hawk B with immature
critical technologies and a highly concurrent test and production
program--much of this contrary to best practices and defense
acquisition policy preferences.
The Predator also had top management attention early in the program and
has maintained its high visibility through a high-ranking group of Air
Force executives known as Task Force Arnold. Established in 2002 as a
senior oversight body for the Predator, Task Force Arnold has provided
guidance and headquarters-level direction to Air Combat Command on the
needs and capabilities for the system. The group has played a valuable
role in helping the Predator program maintain a tight focus on program
requirements and direction. Once the Predator A became operational, Air
Combat Command was besieged by requests from combatant commanders for
additional enhancements or capabilities. To alleviate the problem, the
task force acted as the arbiter for operational requirements. New
capabilities had to be vetted and prioritized through the task force
before they were incorporated. This kept a balance between requirements
and available resources and reduced the burden on Air Combat Command
and the program office, enabling the program to better manage its
requirements.
The task force was instrumental in revising the Predator B plans and
acquisition strategy. On the basis of an assessment from Task Force
Arnold, the Secretary of the Air Force directed that the program office
field an interim combat capability to balance an urgent operational
need with new acquisition. The Secretary also directed that the program
office revise its acquisition strategy to incrementally develop the
Predator. Accordingly, the Air Force restructured the program, dropping
the spiral development plan for an incremental approach. This strategy
extended the production schedule by 5 years and delayed initial
operating capability by 3 years--lessening the degree of concurrency
and providing more time to mature technology and design. Whereas the
original strategy called for procuring 8 operational aircraft by August
2005, the revised, more conservative strategy plans to acquire 6
aircraft delivered 1 year later.
Global Hawk Funding Requirements Are More Compressed than Those of the
Predator:
Global Hawk funding requirements are optimistic, have changed, and
continue to increase. In 2002 Global Hawk tripled estimated development
costs and compressed the procurement of aircraft into fewer years.
Program funding, which previously had been allocated relatively evenly
across 20 years, was compressed into roughly half the time, tripling
Global Hawk's budgetary requirements in certain years. This adds to
funding risk should large annual amounts be unaffordable as they
compete with other defense priorities. The Air Force is currently
preparing a new acquisition baseline estimate, its fourth baseline
since the program started in March 2001.
In contrast, Predator funding requirements are less optimistic and are
spread over a longer production period. The stable Predator A program
has been in production since 1997 and had been focused on replacing
aircraft lost through attrition. However, the Air Force increased its
buy quantities in the fiscal year 2007 budget to reflect increased
future force requirements. The revised acquisition strategy for the
Predator B extended the production period by 5 years and decreased
annual buy quantities, resulting in more even and achievable levels of
annual funding. Annual funding for both Predators has been increased by
Congress in recent years, enabling the Air Force to procure additional
Predator systems or make enhancements to the fielded systems.
J-UCAS Program Can Benefit from Lessons Learned by Global Hawk and
Predator Programs:
J-UCAS represents the next generation of unmanned aircraft. In addition
to providing intelligence and surveillance capabilities, J-UCAS is
being designed as a heavily weaponized and persistent strike aircraft.
The joint Air Force and Navy technology demonstration combined the two
services' separate efforts to develop early models of advanced unmanned
attack systems. Since the pre-acquisition program was initiated in
2003, it has experienced funding cuts and leadership changes. The
recent Quadrennial Defense Review calls for again restructuring the
program into a Navy effort to demonstrate an unmanned carrier-based
system. Regardless of future organization, DOD still has the
opportunity to learn from the lessons of the Global Hawk and Predator
programs to develop the knowledge needed to prepare solid and feasible
business cases to support advanced unmanned aircraft acquisitions.
J-UCAS Plans and Acquisition Strategy Continue to Evolve:
Before J-UCAS was established as a joint program, the Air Force and
Navy had separate unmanned combat aircraft projects under way, each in
partnership with the Defense Advanced Research Projects Agency (DARPA).
In 2003, we reported that the Air Force's original business plan
provided time to mature technologies and was a relatively low-risk
approach, but that plans and strategy had changed to a much accelerated
and higher-risk approach.[Footnote 8] The new plan proposed to increase
requirements and accelerate the schedule for development and
production, substantially increasing concurrency of development, test,
and production activities. The gaps in product knowledge and the
unfinished technology development added significant risks of poor cost,
schedule, and performance outcomes. Therefore, we supported DOD's
decision, under discussion at the time of our review, which advocated a
new joint service approach and which reduced risks by significantly
slowing down the Air Force's plans.
DARPA was then designated to lead a joint demonstration program with
Air Force and Navy participation. The joint office began operations in
October 2003 and devised a $5 billion pre-acquisition program that
would develop and demonstrate larger and more advanced versions of the
original Air Force and Navy prototypes (three from each contractor for
a total of six aircraft). The office planned to conduct an operational
assessment starting in 2007 and use the results to inform Air Force and
Navy decisions for possible system acquisition starts in 2010. The
demonstrators were expected to meet both the Air Force and Navy
requirements and to share a common operating system, sensors, and
weapons. Compared with the revised Air Force plans, the joint approach
provided a more knowledge-based strategy with decreased risks of poor
outcomes. The joint strategy delayed the start of system development,
providing more time to mature the technologies, incorporate new
requirements, and conduct demonstrations with prototype aircraft.
In December 2004, the Office of the Secretary of Defense (OSD) reduced
programmed funding by $1.1 billion and directed that funding and
leadership be transitioned to the Air Force, with Navy participation,
and that the joint program be restructured. The funding and leadership
perturbations added about 19 months to the schedule for completing
technology demonstration and deciding whether to start new system
developments. The plan then was to develop and demonstrate five
aircraft to inform system development decisions in fiscal year 2012.
Now it appears the J-UCAS program will change one more time as the 2006
Quadrennial Defense Review directed its restructuring into a Navy
program to develop an unmanned longer-range carrier-based aircraft
capable of being air-refueled to provide greater standoff capability,
to expand payload and launch options, and to increase naval reach and
persistence. The Quadrennial Defense Review also directed speeding up
efforts to develop a new land-based, penetrating long-range capability
to be fielded by 2018. The Air Force is expected to use the
accomplishments and technologies from the restructured J-UCAS program
to inform the upcoming analysis of alternatives for the next generation
long range strike program. The Air Force has a goal that approximately
45 percent of its future long-range strike force will be unmanned.
Although the J-UCAS and follow-on efforts appear somewhat unstable as
they go through these changes, we see benefits to this. Addition of
requirements and changes in user needs can be determined prior to full
program initiation. If done after an acquisition begins systems
integration, these perturbations would be much more costly.
Lessons Learned:
The Navy's restructured J-UCAS program, the Air Force's new long-range
strike effort, and other future programs have opportunities to learn
lessons from the Global Hawk and Predator programs. As originally
envisioned, the J-UCAS demonstration effort provided for an extended
period of time to define warfighter requirements, mature and
demonstrate technologies, inform the design with systems engineering,
and conduct a thorough operational assessment to prove concepts and
military utility. These kinds of actions would establish a foundation
for a comprehensive business case and effective acquisition strategy.
Key lessons that can be applied to J-UCAS and its offspring include:
* maintaining disciplined leadership support and direction similar to
that experienced early in Global Hawk from the Under Secretary of
Defense for Acquisition, Technology, and Logistics and with the
Predator's Task Force Arnold;
* establishing a clear business case that constrains individual program
requirements to match available resources based on proven technologies
and engineering knowledge before committing to system development and
demonstration;
* establishing an incremental acquisition strategy that separates
technology development from product development and minimizes
concurrency between testing and production;
* establishing and enforcing controls that require knowledge and
demonstrations to ensure that appropriate knowledge is captured and
used at critical decision junctures before moving programs forward and
investing more money; and:
* managing according to realistic funding requirements that fully
resource product development and production based on a cost estimate
that has been informed by proven technologies and a preliminary design.
Additionally, lessons of the Global Hawk and Predator transitions from
ACTDs into production and operation are important. The advanced concept
technology demonstration can be a valuable tool to prove concepts and
military utility before committing time and funds to a major system
acquisition. However, designing in product reliability and
producibility and making informed trade offs among alternative support
approaches are key aspects of development. If these operational aspects
of system development are not addressed early before production, they
can have major negative impacts on life cycle costs.
Finally, as the J-UCAS evolves one more time--and efforts return to the
individual services--some key challenges will exist to maintain the
advantages that were offered by a joint effort. The services need to be
aware of those advantages and not arbitrarily reject them for parochial
reasons. For example, exploiting past plans for common operating
systems, components, and payloads is important to affordability. Common
systems offer potential for cost savings as well as improved
interoperability. In particular, the common operating system pursued by
DARPA is a cutting edge tool to integrate and provide for
interoperability of air vehicles, allowing groups of unmanned aircraft
to fly in a coordinated manner and function autonomously (without human
input).
Conclusions:
Global Hawk's high-risk acquisition strategy resulted in increased
costs and delays. The restructured Global Hawk program is very
different from the original program that was approved in 2001 for a
combined start of development and limited production. The restructured
program replaced the original strategy to slowly and incrementally
develop and acquire enhanced versions of the proven demonstrator, with
a highly concurrent and accelerated strategy to develop and acquire a
substantially new aircraft with much advanced capabilities still in
technology development. Despite these major changes, officials
essentially overlaid the new plans on the old and did not prepare a
comprehensive business case to support the larger aircraft and justify
specific quantities of the advanced signals intelligence and advanced
radar capabilities. Predator B's strategy is less risky, and as a
result, the program has had moderate cost growth and has delivered
assets in a timely manner.
There are trends that run consistently through the Global Hawk and
Predator programs, similar to trends in other major defense acquisition
programs that we have reviewed. That is, when DOD provides strong
leadership at an appropriate organizational level, it enables
innovative, evolutionary, and disciplined processes to work. Once
leadership is removed or diminished, programs have tended to lose
control of requirements and add technical and funding risks. We have
also found that after successful demonstrations to quickly field
systems with existing technologies, problems were encountered after the
programs transitioned into the system development phase of the
acquisition process. The services pushed programs into production
without maturing processes and also began to add new requirements that
stretched beyond technology and design resources. Inadequate
technology, design, and production knowledge increased risk and led to
cost, schedule, and performance problems.
J-UCAS has had a bumpy road with several changes in leadership and
strategic direction. However, J-UCAS and its offspring as directed by
the Quadrennial Defense Review will be at a good juncture to establish
a sound foundation for developing the business case and an effective
acquisition strategy for follow-on investments by better defining
warfighter needs and matching them with available resources. Refining
requirements based on proven technologies and a feasible design based
on systems engineering are best accomplished in the concept and
technology development phase that precedes the start of a system
acquisition program. During this early phase, the environment is
conducive to changes in requirements that can be accomplished more cost-
effectively than after systems integration begins and large
organizations of engineers, suppliers, and manufacturers are formed to
prepare for the start of system production.
Recommendations for Executive Action:
We are making following recommendations to reduce program risk and
increase the likelihood of more successful program outcomes by
delivering capabilities to the warfighter when needed and within
available resources. Specifically,
The Secretary of Defense should direct the Global Hawk program office
to:
* limit production of the Global Hawk B aircraft to the number needed
for flight testing until the developer has demonstrated that signals
intelligence and radar imagery subsystems can be integrated and perform
as expected in the aircraft, and:
* update business case elements to reflect the restructured program to
include an analysis of alternatives, a justification for investments in
the specific quantities needed for each type of Global Hawk Bs being
procured (signals intelligence and advanced radar imagery), and a
revised cost estimate.
The Secretary of Defense should direct the Navy and Air Force
organizations responsible for the development efforts stemming from the
former J-UCAS program to not move into a weapon system acquisition
program before:
* determining requirements and balancing them to match proven
technologies, a feasible design based on systems engineering by the
developer, and available financial resources;
* developing an evolutionary and knowledge-based acquisition strategy
that implements the intent of DOD acquisition policy; and:
* establishing strong leadership empowered to carry out the strategy
that will work in conjunction with the other services to ensure the
design and development continue to incorporate commonality as initiated
under the DARPA-managed joint program.
Agency Comments and Our Evaluation:
DOD provided us with written comments on a draft of this report. The
comments appear in appendix II. DOD concurred with our three
recommendations on the J-UCAS, but did not concur with our two
recommendations on the Global Hawk. Separately, DOD provided technical
comments, which we incorporated where appropriate.
Regarding our recommendation to limit Global Hawk procurement, DOD
stated that the program is managing risk and would test the signals
intelligence sensor and advanced radar on other systems and transition
them to Global Hawk when mature. DOD stated that our recommendation
would stop the production line and incur significant cost and schedule
delays.
We continue to believe that limiting further Global Hawk B procurement
to units needed for testing until the aircraft and its advanced
technologies are integrated and operationally evaluated will lead to
better program outcomes. The Global Hawk program is experiencing
significant cost, schedule, and performance problems, and reducing
procurement should lessen future program risks and allow more time to
mature and test the new aircraft design and technologies before
committing funds for most of the fleet. No Global Hawk B aircraft has
completed production yet and first flight is not expected until
November 2006. Initial operational test and evaluation of the basic
aircraft design with only imagery intelligence capabilities has slipped
into fiscal year 2009. According to the Air Force's current budget
plans, more than one-half of the total Global Hawk B fleet will have
been purchased before starting initial operational test and evaluation.
Schedules for follow-on operational tests of the aircraft integrated
with the advanced signals intelligence and radar technologies--the
capabilities that drove the decision to acquire the larger aircraft--
have also slipped. While we support Air Force efforts to first test
these new capabilities on surrogate systems, our concern is again that,
by the time the Air Force tests fully integrated Global Hawk systems in
an operational environment, most of the aircraft will already be built
or on order. If problems are revealed during testing of the aircraft
and its technologies, they could require costly redesign and
remanufacture of items already produced and further delay getting these
capabilities to combatant commanders.
There are several other compelling reasons to limit procurement plans:
Projected delivery dates for the Global Hawk B continue to slip.
Estimated delivery schedules in the fiscal year 2007 budget show that
deliveries have slipped an average of almost 10 months since Global
Hawk B production started in July 2004 and by an average exceeding 6
months in the last year alone. If any further slippage occurs,
production may be a year or more behind what the Air Force's strategy
and financial plan was built upon. With these delays, the Air Force
should be able to reduce near-term buys and rebalance subsequent
procurements without materially affecting the flow of production.
Procurement through fiscal year 2006 will complete its approved low-
rate initial production quantity of 19 aircraft. By law, a major weapon
system cannot proceed beyond the low-rate quantity until initial
operational test and evaluation has been satisfactorily completed as
reported by the Director, Operational Test and Evaluation. Again,
initial operational test and evaluation has been delayed until fiscal
year 2009. In his annual report, the Director stated that low-rate
production quantities should not be increased on the Global Hawk until
after an adequate initial operational test and evaluation of the Global
Hawk B aircraft and ground segments.
Operational assessment of the smaller Global Hawk A is not yet
complete. Testing and flight operations have experienced engine shut-
downs, communication failures, and imagery data processing
deficiencies. These problems directly affect the Global Hawk B because
it uses the same engine and similar communication and data processing
systems.
Regarding our recommendation to update the Global Hawk's business case,
DOD stated that the department's current Nunn-McCurdy certification
evaluation and program rebaselining is thorough and provides department
leaders with the information they need to make informed decisions.
Because the Nunn-McCurdy certification and rebaselining effort is
ongoing, we cannot comment on whether these documents will make up a
comprehensive business case. However, given the magnitude of the
program's continuing changes and challenges discussed in this report,
we are concerned that these efforts will fall short. A business case
should be rigorously updated to reflect significant restructurings, to
justify specific investments in new and emerging technologies, and to
match revised requirements to available resources.
Our apprehension is not unfounded. In November 2004, we similarly
recommended that DOD delay further procurement of the Global Hawk B
until a new business case--one that reduced risk and applied a
knowledge-based approach--was completed. DOD chose not to concur with
this recommendation, arguing that the department was effectively
mitigating risk. Despite DOD's assurances, events that triggered the
Nunn-McCurdy review in April 2005 not only indicate that the risk
mitigation measures were ineffective but underscore the wisdom of
making a new business case. In addition to cost increases, schedule
delays, and performance problems that have altered many of the
program's conditions and plans as they were originally envisioned,
officials said they are rethinking Global Hawk test plans and low-rate
quantities, which could affect the elements on which a business case is
made. Our past work on major weapon systems acquisitions has clearly
shown the value of preparing and maintaining a comprehensive business
case to justify and guide investments, and the need to revisit the
business case if circumstances substantially change, as they have on
Global Hawk.
Scope and Methodology:
To determine the extent to which Global Hawk and Predator acquisition
strategies and business cases were effective in meeting warfighter
requirements we reviewed budget and planning documents. We also
utilized GAO's Methodology for Assessing Risks on Major Weapon System
Acquisition Programs to assess their acquisition strategies and
business cases with respect to best practices criteria. The methodology
is described from the best practices and experiences of leading
commercial firms and successful defense acquisition programs. We
interviewed DOD and contractor officials and obtained programmatic data
and reports for the Global Hawk and Predator. We incorporated our
recent Global Hawk and Predator Quick Look efforts and past GAO reports
and testimony. We reviewed management plans, cost reports, progress
briefings, and risk data to identify execution efforts and results to
date.
The primary comparisons made in the report are for the most part
focused on the combined Global Hawk program and the Predator B program.
Information on the Predator A program mainly provides a historical
perspective and lessons learned from that older and more mature system.
We received DOD comments questioning whether the Global Hawk and
Predator B programs can reasonably be compared given the differences in
time frames; Global Hawk's system start was in March 2001, 3 years
earlier than Predator B's start in February 2004.
While we agree that there may sometimes be a period of time before
problems in a newer program become evident, we believe the two programs
can be compared to provide valuable lessons for future acquisitions.
First, concerns about acquisition strategy, concurrency, and funding
profiles are not particularly dependent on time frames. Second, the DOD
policy preference for incremental acquisitions used as criteria in
comparing programs was in effect when both programs started. Third, the
Global Hawk B, which comprises most of the Global Hawk program, did not
begin production until after the start of Predator B. In a comparable
time frame since then, the Predator B program has provided some interim
combat capability and has production models flying and undergoing
tests, while the first Global Hawk B is expected to make its first
flight later this year.
To identify what lessons can be learned and applied on the J-UCAS
program, or its offspring, we interviewed DOD and contractor officials
and obtained programmatic data and reports on J-UCAS. We used our
comparisons of the Global Hawk and Predator, as well as past audit work
on unmanned and manned systems, to identify factors conducive to
successful programs and development of effective business cases and
implementation strategies. We monitored the changes in J-UCAS
leadership, priorities, and support within the department and Congress,
including the most recent decisions by the Quadrennial Defense Review.
We utilized also information obtained in past Quick Look and budget
review efforts concerning J-UCAS.
In performing our work, we obtained information and interviewed
officials from the Global Hawk, Predator, and Joint Unmanned Combat Air
Systems Program Offices, all at Wright Patterson Air Force Base, Ohio;
Air Combat Command, Langley Air Force Base, Virginia; Northrop Grumman
Integrated Systems, Rancho Bernardo and Palmdale, California; General
Atomics Aeronautical Systems, San Diego and Palmdale, California; and
DOD Task Force for Unmanned Systems, Office of the Secretary of
Defense, Washington, D.C.
We performed our review from August 2005 to February 2006 in accordance
with generally accepted government auditing standards.
We are sending copies of this report to the Secretary of Defense, the
Secretary of the Air Force, and the Secretary of the Navy, and
interested congressional committees. We will also make copies available
to others upon request. In addition, the report will be available at no
charge on the GAO Web site at http://www.gao.gov.
If you have any questions regarding this report, please call me at
(202) 512-4841. Contact points for our offices of Congressional
Relations and Public Affairs are listed on the last page of this
report. The following staff made key contributions to this report:
Michael Hazard, Assistant Director, Bruce Fairbairn, Rae Ann Sapp,
Charlie Shivers, Adam Vodraska, and Karen Sloan.
Signed by:
Michael J. Sullivan:
Director, Acquisition and Sourcing Management Issues:
[End of section]
Appendix I: Unmanned Aircraft Systems Included in This Review:
The Air Force's Global Hawk system is a high-altitude, long-endurance
unmanned aircraft with integrated sensors and ground stations providing
intelligence, surveillance, and reconnaissance capabilities. After a
successful technology demonstration, the system entered development and
limited production in March 2001. Considered a transformational system,
the program was restructured twice in 2002 to acquire 7 air vehicles
similar to the original demonstrators (the Global Hawk A) and 44 of a
new, larger, and more capable model (the Global Hawk B). Seven Global
Hawk As have been delivered to the Air Force. Global Hawk Bs are in
production with first flight and first delivery expected in fiscal year
2007. Demonstrators have seen combat operations in Iraq and Afghanistan
and the first Global Hawk As recently arrived in-theater.
The Predator began as a technology demonstration in 1994 and
transitioned to an Air Force program in 1997. Predators have supported
combat operations since 1995. Originally designed to provide tactical
reconnaissance, the Predator A was modified in 2001 to employ Hellfire
missiles, giving it a limited ground strike capability. In response to
the Global War on Terror initiatives, the Air Force proposed a larger
model carrying more weapons and flying higher and faster. The Predator
B was approved as a new system development and demonstration program in
February 2004. Funding plans at the time of our review were to procure
a total of 232 Predators--181 A models and 63 B models--with additional
future buys expected. Through calendar year 2005, 137 aircraft have
been delivered, 8 Predator Bs and the rest Predator As.
The Joint Unmanned Combat Systems (J-UCAS) program is a joint Air Force
and Navy effort begun in October 2003 to develop and demonstrate the
technical feasibility and operational value of a networked system of
high-performance, weaponized unmanned aircraft. Planned missions
include suppression of enemy air defenses, precision strike, persistent
surveillance, and potentially others such as electronic attack as
resources and requirements dictate. The program consolidated two
formerly separate service efforts and was to develop and demonstrate
larger, more capable, and interoperable aircraft to inform decisions on
starting acquisition program(s) in fiscal year 2012. The Quadrennial
Defense Review calls for restructuring J-UCAS into a Navy effort to
develop an unmanned carrier-based aircraft, while the Air Force will
consider J-UCAS technologies and accomplishments in its efforts to
develop a new, land-based long-range strike capability.
Figure 2 compares the salient performance characteristics of these
unmanned aircraft systems.
Figure 2: Performance Characteristics of Unmanned Aircraft Systems
Reviewed by GAO:
[See PDF for image]
[End of figure]
[End of section]
Appendix II: Comments from the Department of Defense:
OFFICE OF THE UNDER SECRETARY OF DEFENSE:
3000 DEFENSE PENTAGON:
ACQUISITION TECHNOLOGY AND LOGISTICS:
WASHINGTON, DC 20301-3000:
Mr. Michael J. Sullivan:
Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, D.C. 20548:
Dear Mr. Sullivan:
This is the Department of Defense (DoD) response to the GAO draft
report, "UNMANNED AIRCRAFT SYSTEMS: New DOD Programs Can Learn from
Past Efforts to Craft Better and Less Risky Acquisition Strategies,"
dated February 10, 2006 (GAO Code 120462/GAO-06-447).
The DoD non-concurs with the draft report's first and second
recommendation for the Global Hawk program, but concurs with the third,
fourth, and fifth recommendation for the J-UCAS program. The rationale
for the DoD's position is enclosed.
The Department appreciates the opportunity to comment on the draft
report. For further questions concerning this report, please contact
Dyke Weatherington, Deputy, Unmanned Aircraft Systems Planning Task
Force, 703-695-6188.
Sincerely,
Signed by:
Mark D. Schaeffer:
Acting Director:
Defense Systems:
Enclosure: As stated:
GAO DRAFT REPORT - DATED FEBRUARY 10, 2006:
GAO CODE 120462/GAO-06-447:
"UNMANNED AIRCRAFT SYSTEMS: NEW DOD PROGRAMS CAN LEARN FROM PAST
EFFORTS TO CRAFT BETTER AND LESS RISKY ACQUISITION STRATEGIES"
DEPARTMENT OF DEFENSE COMMENTS TO THE RECOMMENDATIONS:
RECOMMENDATION 1: The GAO recommended that the Secretary of Defense
direct the Global Hawk program office to limit production of the Global
Hawk B aircraft to the number needed for flight testing until the
developer has demonstrated that signals intelligence and radar imagery
subsystems can be integrated and perform as expected in the aircraft.
(p. 21/GAO Draft Report):
DoD RESPONSE: Non-concur. The Department is managing risk in the Global
Hawk program while continuing the acquisition approach that delivers
increments of capability at the earliest opportunity. The first Global
Hawk Block 20 aircraft will deliver and field with electro-optical,
infrared, and synthetic aperture radar sensors similar to the Block 10
aircraft. When mature, signals intelligence capability will be fielded
on the Block 30 aircraft. To reduce risk and concurrency to the Global
Hawk program, signals intelligence capability will be integrated and
flight tested first on the U-2 aircraft. Only when the capability is
mature will it be transitioned to the Global Hawk. Similarly, the MP-
RTIP radar for the Block 40 aircraft will first be flight tested on a
surrogate platform to reduce risk and mature the capability. This
strategy manages risk in each successive block and provides flexibly
for integration of improved capability. The GAO recommendation would
stop the current established production line, incurring significant
cost and schedule delays. Combatant Commanders continue to request this
capability, and the acquisition strategy balances risk with the need to
support the warfrghter. As part of the Department's Nunn-McCurdy
process, the Department will consider all viable courses of action for
the Global Hawk program that comply with the intent of Title 10 USC
2433 while preserving the capability.
RECOMMENDATION 2: The GAO recommended that the Secretary of Defense
direct the Global Hawk program office to update business case elements
to reflect the restructured program to include an analysis of
alternatives, to justify investments in the specific quantities needed
for each type of Global Hawk B's being procured (signals intelligence
and advanced radar imagery), and a revised cost estimate. (page 21/GAO
Draft Report):
DoD RESPONSE: Non-concur. The Department's current Nunn-McCurdy
certification evaluation and program rebaselining is thorough, and
tailored for the Global Hawk acquisition program, so as to provide
Department leaders with the information to make informed decisions
which will fully comply with the requirements of Title 10 USC 2433. The
department's analysis will determine if:
* The Global Hawk acquisition program is essential to the national
security:
* There are alternatives to the Global Hawk acquisition program, which
will provide equal or greater military capability at less cost:
* New estimates of the program acquisition unit cost or procurement
unit cost are reasonable:
* The management structure for the Global Hawk acquisition program is
adequate to manage and control program acquisition unit cost or
procurement unit cost:
RECOMMENDATION 3: The GAO recommended that the Secretary of Defense
direct the Navy and the Air Force organizations responsible for the
development efforts stemming from the former J-UCAS program to not move
into a weapon system acquisition program before determining
requirements and balancing them to match proven technologies, a
feasible design based on systems engineering by the developer, and
available financial resources. (page 21/GAO Draft Report):
DoD RESPONSE: Concur. The Department will follow Joint Capabilities
Integration and Development System process to prepare requirements
documentation to support a potential acquisition program. The
capability gaps identified in the current Joint Strike Enabler Initial
Capabilities Document form the basis of the J-UCAS program's
requirements documents and are remain valid. As this process proceeds,
various analysis and demonstrations will be completed that will balance
requirements, resources, and technology maturity to develop a system
concept that is at the appropriate technology readiness level for a
Milestone B decision.
RECOMMENDATION 4: The GAO recommended that the Secretary of Defense
direct the Navy and the Air Force organizations responsible for the
development efforts stemming from the former J-UCAS program to not move
into a weapon system acquisition program before developing an
evolutionary and knowledge-based acquisition strategy that implements
the intent of Defense acquisition policy. (page 21/GAO Draft Report):
DoD RESPONSE: Concur. The Department will follow the DoD 5000 series
guidance to structure a potential acquisition program. Our approach has
been, and remains one that is a knowledge-based, incremental approach
that provides initial, incremental capability to meet the most
immediate, achievable warfighting requirements while development of
more complex capabilities continue. Our approach will also include
clear entry and exit criteria for critical milestones to ensure that
technologies are mature, and required incremental test objectives are
achieved.
RECOMMENDATION 5: The GAO recommended that the Secretary of Defense
direct the Navy and the Air Force organizations responsible for the
development efforts stemming from the former J-UCAS program to not move
into a weapon system acquisition program before establishing strong
leadership empowered to carry out the strategy and that will work in
conjunction with the other services to ensure the design and
development continue to incorporate commonality as initiated under the
DARPA managed joint program. (Page 22/GAO Draft Report):
DoD RESPONSE: Concur. The Department's approach toward a potential
acquisition program continues to emphasize empowered leadership, and to
encourage commonality and interoperability throughout the Joint Forces
to the maximum extent practical.
[End of section]
Related GAO Products:
Unmanned Aircraft Systems: Global Hawk Cost Increase Understated in
Nunn-McCurdy Report. GAO-06-222R. Washington, D.C.: December 15, 2005.
Unmanned Aircraft Systems: DOD Needs to More Effectively Promote
Interoperability and Improve Performance Assessments. GAO-06-49.
Washington, D.C.: December 13, 2005.
Best Practices: Better Support of Weapon System Program Managers Needed
to Improve Outcomes. GAO-06-110. Washington, D.C.: November 30, 2005.
DOD Acquisition Outcomes: A Case for Change. GAO-06-257T. Washington,
D.C.: November 15, 2005.
Defense Acquisitions: Assessments of Major Weapon Programs. GAO-05-301.
Washington, D.C.: March 31, 2005.
Unmanned Aerial Vehicles: Improved Strategic and Acquisition Planning
Can Help Address Emerging Challenges. GAO-05-395T. Washington, D.C.:
March 9, 2005.
Unmanned Aerial Vehicles: Changes in Global Hawk's Acquisition Strategy
Are Needed to Reduce Program Risks. GAO-05-6. November 5, 2004.
Defense Acquisitions: Assessments of Major Weapon Programs. GAO-04-248.
Washington, D.C.: March 31, 2004.
Unmanned Aerial Vehicles: Major Management Issues Facing DOD's
Development and Fielding Efforts. GAO-04-530T. Washington, D.C.: March
17, 2004.
Force Structure: Improved Strategic Planning Can Enhance DOD's Unmanned
Aerial Vehicles Efforts. GAO-04-342. Washington, D.C.: March 17, 2004.
Defense Acquisitions: DOD's Revised Policy Emphasizes Best Practices,
but More Controls Are Needed. GAO-04-53. Washington, D.C.: November 10,
2003.
Defense Acquisitions: Matching Resources with Requirements Is Key to
the Unmanned Combat Air Vehicle Program's Success. GAO-03-598.
Washington, D.C.: June 30, 2003.
Best Practices: Capturing Design and Manufacturing Knowledge Early
Improves Acquisition Outcomes. GAO-02-701. Washington, D.C.: July 15,
2002.
Defense Acquisitions: DOD Faces Challenges in Implementing Best
Practices. GAO-02-469T. Washington, D.C.: February 27, 2002.
Best Practices: Better Matching of Needs and Resources Will Lead to
Better Weapons System Outcomes. GAO-01-288. Washington, D.C.: March 8,
2001:
Defense Acquisition: Employing Best Practices Can Shape Better Weapon
System Decisions. GAO/T-NSIAD-00-137. Washington, D.C.: April 26, 2000.
Unmanned Aerial Vehicles: Progress of the Global Hawk Advanced Concept
Technology Demonstration. GAO/NSIAD-00-78. Washington, D.C. April 25,
2000.
Unmanned Aerial Vehicles: DOD's Demonstration Approach Has Improved
Project Outcomes. GAO/NSIAD-99-33. Washington, D.C.: August 16, 1999.
FOOTNOTES
[1] Until recently, DOD referred to these aircraft as "unmanned aerial
vehicles." The terms "unmanned aircraft" and "unmanned aircraft
systems" are consistent with the Federal Aviation Administration's
classification and emphasizes that the aircraft is one component of the
weapon system, which also includes payloads, ground stations, and
communications equipment.
[2] The committee also asked us to review the Army's Extended
Range/Multi-Purpose unmanned aircraft system, which we will report on
separately.
[3] Pub. L. No. 106-398, Appendix H.R. 5408, sec. 220 (2000).
[4] GAO, Unmanned Aerial Vehicles: Changes in Global Hawk's Acquisition
Strategy Are Needed to Reduce Program Risks, GAO-05-6 (Washington,
D.C.: Nov. 5, 2004).
[5] To provide for oversight of cost growth in DOD major defense
acquisition programs, Congress passed legislation in 1982, commonly
referred to as Nunn-McCurdy, that, as amended, requires DOD to notify
Congress when a program's unit cost growth exceeds (or breaches) the
latest approved acquisition program baseline by at least 15 percent.
This requirement is codified at 10 U.S.C. 2433.
[6] GAO, Unmanned Aircraft Systems: Global Hawk Unit Price Increases
Understated in Nunn-McCurdy Report, GAO-06-222R (Washington, D.C.:
December 15, 2005).
[7] If the cost growth has increased at least 25 percent over the
baseline, the Secretary of Defense must certify to Congress that (1)
the program is essential to national security, (2) no alternatives
exist which will provide equal or greater military capability at less
cost, (3) new program acquisition or procurement unit cost estimates
are reasonable, and (4) the management structure is adequate to control
unit cost.
[8] GAO, Defense Acquisitions: Matching Resources with Requirements Is
Key to the Unmanned Combat Air Vehicle Program's Success, GAO-03-598
(Washington D.C.: June 30, 2003).
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