DEFENSE 

ACQUISITIONS

Navy Strategy for 

Unmanned CarrierBased Aircraft System 

Defers Key Oversight 

Mechanisms

Report to Congressional Committees

September 2013

GAO-13-833

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-833, a report to 

congressional committees

September 2013

DEFENSE ACQUISITIONS

Navy Strategy for Unmanned Carrier-Based Aircraft

System Defers Key Oversight Mechanisms

Why GAO Did This Study

The Navy estimates that it will need 

$3.7 billion from fiscal year 2014 

through fiscal year 2020 to develop 

and field an initial UCLASS system. 

The National Defense Authorization 

Act for Fiscal Year 2012 mandated that 

GAO evaluate the UCLASS system 

acquisition strategy. This report (1) 

assesses the UCLASS acquisition 

strategy, (2) identifies key areas of risk 

facing the system, and (3) notes areas 

where the Navy’s strategy contains 

good practices. To do this work, GAO 

reviewed the Navy’s acquisition 

strategy and compared it to DOD’s 

acquisition policy, among other criteria; 

and reviewed Navy acquisition

documents and spoke with Navy and 

Office of the Secretary of Defense

officials. 

What GAO Recommends

Congress should consider directing the 

Navy to hold a Milestone B review for 

the UCLASS system after the system 

level preliminary design review is 

complete. If the Navy does not comply, 

Congress should consider limiting the 

amount of funding available for the 

UCLASS system until an acquisition 

program baseline is provided. GAO 

included these matters for 

consideration because the Navy does 

not plan to make changes as a result 

of GAO’s recommendation to hold a 

Milestone B review following the 

system level preliminary design 

review—which is currently scheduled 

in fiscal year 2015. The Navy did not 

concur with the recommendation, and 

believes that its approved strategy is 

compliant with acquisition regulations 

and laws. GAO continues to believe 

that its recommendation is valid as 

discussed in this report.

What GAO Found

In fiscal year 2014, the Navy plans to commit to investing an estimated $3.7 

billion to develop, build, and field from 6 to 24 aircraft as an initial increment of 

Unmanned Carrier-Launched Airborne Surveillance and Strike (UCLASS) 

capability. However, it is not planning to hold a Milestone B review—a key 

decision that formally initiates a system development program and triggers key 

oversight mechanisms—until after the initial UCLASS capability has been 

developed and fielded in fiscal year 2020. The Navy views UCLASS as a 

technology development program, although it encompasses activities 

commensurate with system development, including system integration and 

demonstration. Because the initial UCLASS system is to be developed, 

produced, and fielded before a Milestone B decision, Congress’s ability to 

oversee the program and hold it accountable for meeting cost, schedule, and 

performance goals will likely be limited. Specifically, the program will operate 

outside the basic oversight framework provided by mechanisms like a formal cost 

and schedule baseline, statutory unit cost tracking, and regular reports to 

Congress on cost, schedule, and performance progress. The Navy believes its 

approach effectively utilizes the flexibility in the Department of Defense’s (DOD)

acquisition policy to gain knowledge needed to ensure a successful UCLASS 

system development program starting in fiscal year 2020. Yet the Navy expects

to review preliminary designs, conduct a full and open competition, and award a 

contract for UCLASS development in fiscal year 2014, a point at which DOD 

policy and best practices indicate that a program would be expected to hold a 

Milestone B review to initiate a system development program. Apart from 

deferring Milestone B, the Navy’s plan would be consistent with the knowledgebased acquisition process reflected in DOD policy.

UCLASS faces several programmatic risks going forward. First, the UCLASS 

cost estimate of $3.7 billion exceeds the level of funding that the Navy expects to 

budget for the system through fiscal year 2020. Second, the Navy has scheduled 

8 months between the time it issues its request for air vehicle design proposals 

and the time it awards the air vehicle contract, a process that DOD officials note 

typically takes 12 months to complete. Third, the UCLASS system is heavily 

reliant on the successful development and delivery of other systems and 

software, which creates additional schedule risk. Fourth, the Navy will be 

challenged to effectively manage and act as the lead integrator for three separate 

but interrelated segments—air vehicle, carrier, and control system—and 22 other 

government systems, such as the aircraft landing system, the timing and 

alignment of which are crucial to achieving the desired UCLASS capability. While 

the Navy recognizes many of these risks and has mitigation plans in place, they 

could lead to cost increases and schedule delays if not effectively addressed.

The Navy’s UCLASS acquisition strategy includes some good acquisition 

practices that reflect aspects of a knowledge-based approach. For example, the 

Navy is leveraging significant knowledge gained from prior technology 

development efforts, incorporating an open systems design approach, working to 

match the system’s requirements with available resources, and reviewing 

preliminary designs for the air vehicle before conducting a competition to select a 

single contractor to develop and deliver the air vehicle segment. 

View GAO-13-833. For more information, 

contact Michael J. Sullivan at (202) 512-4841 

or sullivanm@gao.gov.
Page i GAO-13-833 Unmanned Carrier-Based Aircraft 

Letter 1

Background 2

The Navy’s UCLASS Acquisition Strategy Defers Key Oversight 

Mechanisms 6

UCLASS Faces Cost, Schedule, and Program Management Risks 9

UCLASS Acquisition Strategy Contains Aspects of a KnowledgeBased Approach 11

Conclusions 13

Matters for Congressional Consideration 13

Recommendation for Executive Action 14

Agency Comments and Our Evaluation 14

Appendix I Objectives, Scope, and Methodology 17

Appendix II Comments from the Department of Defense 19

Appendix III GAO Contact and Staff Acknowledgments 21

Figures

Figure 1: DOD’s Acquisition Process Aligns with a KnowledgeBased Approach 4

Figure 2: Navy Plans to Develop and Field Initial UCLASS System 

before Milestone B 7

Figure 3: Navy Plan Defers Establishment of UCLASS Acquisition 

Program Baseline 8

Contents
Page ii GAO-13-833 Unmanned Carrier-Based Aircraft 

Abbreviations

DOD Department of Defense

JPALS Joint Precision Approach and Landing System

J-UCAS Joint Unmanned Combat Air System

OSD Office of the Secretary of Defense

UCAS-D Unmanned Combat Aircraft System Demonstration

UCLASS Unmanned Carrier-Launched Airborne Surveillance 

and Strike

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Page 1 GAO-13-833 Unmanned Carrier-Based Aircraft 

441 G St. N.W.

Washington, DC 20548

September 26, 2013

Congressional Committees

The Navy expects to invest $3.7 billion from fiscal year 2014 through 

fiscal year 2020 to develop, test, and field an initial Unmanned CarrierLaunched Airborne Surveillance and Strike (UCLASS) system. The 

system is expected to provide intelligence, surveillance, reconnaissance, 

targeting, and strike capabilities to the Navy’s aircraft carrier fleet. The 

UCLASS system is made up of three primary segments: (1) unmanned air 

vehicle, (2) aircraft carrier modifications, and (3) control system.1

The National Defense Authorization Act for Fiscal Year 2012 mandated 

that GAO evaluate the UCLASS system’s acquisition strategy.2

To assess the Navy’s UCLASS acquisition strategy, identify risks facing the 

system, and identify good practices, we collected and reviewed the Navy’s 

UCLASS acquisition strategy, analysis of alternatives, capabilities 

development document, and other relevant Navy management documents. 

We compared the Navy’s strategy with best practice standards for using 

knowledge to support key program investment decisions

This 

report (1) assesses the Navy’s UCLASS acquisition strategy, (2) identifies 

key areas of risk facing the UCLASS system, and (3) notes areas where 

the Navy’s strategy contains good practices.

3

 1

The air vehicle segment is to develop a carrier-suitable, semi-autonomous, unmanned 

vehicle capable of sustained intelligence, surveillance, reconnaissance, and targeting 

operations and strike capability. The carrier segment is to provide upgrades to existing 

carrier infrastructure, integrate capability within existing program of record systems, add 

new mission essential equipment, and provide operating procedures to support unmanned 

aircraft system operations. The control segment is to interface and upgrade existing 

command and control systems, specifically the Intelligence, Surveillance, 

Reconnaissance, and Targeting system, and the Tasking, Processing, Exploitation, and 

Dissemination system. 

and Department 

2

Pub. L. No.112-81, § 213(b) (2011).

3

GAO developed these standards for using knowledge to support key program investment 

decisions, which are discussed later in the report. For more information, see GAO, 

Defense Acquisitions: Assessments of Selected Weapon Programs, GAO-13-294SP

(Washington, D.C.: Mar. 28, 2013). 
Page 2 GAO-13-833 Unmanned Carrier-Based Aircraft 

of Defense (DOD) acquisition policy.4

We conducted this performance audit from July 2013 to September 2013 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives.

We discussed the UCLASS 

acquisition strategy with officials from the UCLASS system program 

office, the Naval Air Systems Command, the Chief of Naval Operations,

and organizations within the Office of the Secretary of Defense (OSD) 

including the Director of OSD Cost Assessment and Program Evaluation, 

the Deputy Assistant Secretary of Defense for Systems Engineering, and 

the Under Secretary of Defense for Acquisition, Technology, and 

Logistics. See appendix I for additional information on our objectives, 

scope, and methodology.

The Navy’s UCLASS system will be the first unmanned aircraft system 

deployed on an aircraft carrier. Efforts to develop an unmanned combat 

air system for the Navy can be traced back to 2003 when DOD 

established a joint Navy and Air Force program called the Joint 

Unmanned Combat Air System (J-UCAS). This joint effort drew on 

knowledge that the Air Force had gained through early development of 

the Unmanned Combat Air Vehicle, an effort that began in the late 1990s. 

The J-UCAS program was canceled in late 2005. The following year, the 

Navy initiated the Unmanned Combat Air System Demonstration (UCASD) program—the immediate predecessor to UCLASS—with the intent to 

design, develop, integrate, test, and demonstrate the technical feasibility 

of operating unmanned air combat systems from an aircraft carrier. In 

2013, the Navy successfully launched and landed a UCAS-D on an 

aircraft carrier. In total the Navy invested more than $1.4 billion in the 

UCAS-D program. In 2011, as UCAS-D efforts were ongoing, the Navy 

received approval from DOD to begin planning for the UCLASS 

acquisition program.

 4

Department of Defense Instruction 5000.02, Operation of the Defense Acquisition 

System (Dec. 8, 2008) (hereinafter cited as DODI 5000.02 (Dec. 8, 2008)).

Background
Page 3 GAO-13-833 Unmanned Carrier-Based Aircraft 

In our past work examining weapon acquisition and best practices for 

product development, we found that leading commercial firms and 

successful DOD programs pursue an acquisition approach that is 

anchored in knowledge, whereby high levels of knowledge are 

demonstrated at critical junctures. Specifically, there are three critical 

junctures—knowledge points—in an acquisition program at which 

decision makers must have adequate knowledge to make large 

investment decisions.5 If the knowledge attained at each juncture does 

not confirm the business case on which the acquisition was originally 

justified, the program does not go forward. At the first knowledge point, a 

match must be made between the customers’ needs and the available 

resources—technical and engineering knowledge, time, and funding—

before a system development program is started. At the second 

knowledge point, about midway through development, the developer must 

demonstrate that the system’s design is stable and that it can meet 

performance requirements. At the third knowledge point, the developer 

must show that the system can be manufactured within cost, schedule, 

and quality targets and that it is reliable before beginning production. The 

first knowledge point is the most critical point of the three. At that point 

programs should present their business case for review and approval, 

which establishes an acquisition program baseline. This baseline 

describes the cost, quantity, schedule, and performance goals of a 

program and provides a framework for effective oversight and 

accountability. This first knowledge point typically coincides with a 

substantial financial commitment.6

 5

GAO, Best Practices: DOD Can Achieve Better Outcomes by Standardizing the Way 

Manufacturing Risks Are Managed, GAO-10-439 (Washington, D.C: Apr. 22, 2010); Best 

Practices: High Levels of Knowledge at Key Points Differentiate Commercial Shipbuilding 

from Navy Shipbuilding, GAO-09-322 (Washington, D.C.: May 13, 2009); Defense 

Acquisitions: A Knowledge-Based Funding Approach Could Improve Major Weapon 

System Program Outcomes, GAO-08-619 (Washington, D.C.: July 2, 2008); Best 

Practices: Capturing Design and Manufacturing Knowledge Early Improves Acquisition 

Outcomes, GAO-02-701 (Washington, D.C.: July 15, 2002); Best Practices: Better 

Matching of Needs and Resources Will Lead to Better Weapon System Outcomes, 

GAO-01-288 (Washington, D.C.: Mar. 8, 2001); and Best Practices: Better Management of 

Technology Development Can Improve Weapon System Outcomes, GAO/NSIAD-99-162

(Washington, D.C.: July 30, 1999).

6 For more information on GAO’s knowledge points see GAO, Defense Acquisitions: 

Assessments of Selected Weapon Programs, GAO-13-294SP (Washington, D.C: Mar. 28,

2013).
Page 4 GAO-13-833 Unmanned Carrier-Based Aircraft 

DOD’s acquisition policy and guidance encourage the use of a 

knowledge-based acquisition approach, in which major decision reviews 

are aligned with the start of key acquisition phases, including technology 

development, system development—referred to as engineering and 

manufacturing development—and production. Figure 1 aligns the 

knowledge points with key decision points in DOD’s acquisition process.

Figure 1: DOD’s Acquisition Process Aligns with a Knowledge-Based Approach

According to DOD acquisition policy, the purpose of the technology 

development phase is to reduce technology risk, determine and mature 

the appropriate set of technologies to be integrated into a full system, and 

to demonstrate critical technology elements on prototypes.7

 7

DODI 5000.02, Encl. 2, para. 5.a. (Dec. 8, 2008).

A system

level preliminary design review is to be held during the technology 

development phase to inform requirements trades; improve cost 

estimation; and identify remaining design, integration, and manufacturing 

risks. The results of the preliminary design review are to be reported to 

decision makers at Milestone B—the decision review in DOD’s process 

that corresponds with knowledge point 1 and initiates system 

development. The purpose of system development is to develop a system 

or an increment of capability, complete full system integration, develop an 

affordable and executable manufacturing process, and demonstrate 

system integration, interoperability, safety, and utility, among other things. 
Page 5 GAO-13-833 Unmanned Carrier-Based Aircraft 

System development provides a critical opportunity for objective oversight 

before beginning production.

At Milestone B, major defense acquisition programs are required by DOD 

policy to have approved requirements, an independent cost estimate, and 

an acquisition program baseline; begin tracking unit cost changes and 

report unit cost growth against Nunn-McCurdy statutory thresholds;8 and 

periodically report to Congress on the cost, schedule, and performance 

status of the program in Selected Acquisition Reports.9 At that time, major 

defense acquisition programs are also required by statute to present a 

business case analysis and certify on the basis of that analysis that the 

program is affordable, has reasonable lifecycle cost and schedule 

estimates, and that technologies have been demonstrated in a relevant 

environment, among other things.10 Taken together, these requirements 

form the basic oversight framework to ensure that Congress and DOD 

decision makers are adequately informed about the program’s cost, 

schedule, and performance progress. In addition, the information is 

valuable for identifying areas of program risk and its causes, and helps to 

ensure that decision makers consider the full financial commitment before 

initiating a new development program. Once initiated at Milestone B, 

major defense acquisition programs are required to measure program 

performance against the program’s baseline estimate. Changes to the 

baseline are only authorized under certain conditions, including a 

program restructure that is approved by the milestone decision authority, 

or a breach of the critical Nunn-McCurdy statutory threshold where DOD 

certifies continuation of the program to Congress.

 8

Enacted in 1982, the statutory provision known as Nunn-McCurdy requires DOD to notify 

Congress whenever a major defense acquisition program’s unit cost experiences cost 

growth that exceeds certain thresholds. This is commonly referred to as a Nunn-McCurdy 

breach. 10 U.S.C. § 2433.

9

DODI 5000.02, Encl. 2, paras. 5.d(7) and 6.a and Encl. 4, Table 2-1 (Dec. 8, 2008).

1010 U.S.C. § 2366b(a).
Page 6 GAO-13-833 Unmanned Carrier-Based Aircraft 

In fiscal year 2014, the Navy plans to commit to investing an estimated 

$3.7 billion to develop, produce, and field from 6 to 24 aircraft and modify 

1 to 4 aircraft carriers as an initial increment of UCLASS capability—

referred to as an early operational capability. The Navy plans to manage 

UCLASS as if it were a technology development program, although its 

strategy encompasses activities commensurate with a program in system 

development and early production. Accordingly, it is not planning to hold a 

Milestone B review to formally initiate a system development program—

which would trigger key oversight mechanisms—until after the initial 

capability is fielded in fiscal year 2020. This strategy means the program 

will not be subject to these oversight mechanisms including an acquisition 

program baseline; Nunn-McCurdy unit cost growth thresholds; and 

periodic reporting of the program’s cost, schedule, and performance 

progress. This strategy will likely limit Congress’s ability to oversee this 6-

year multibillion dollar program. Navy officials believe that their approach 

effectively utilizes the flexibility in DOD’s acquisition policy to ensure that 

UCLASS requirements and concept of operations are well understood 

and achievable before formally beginning a system development 

program. Yet they emphasize that by fiscal year 2020 they may have 

accumulated enough knowledge to allow them to bypass a formal 

development program and proceed directly to production at Milestone C. 

Figure 2 illustrates the Navy’s strategy.

The Navy’s UCLASS 

Acquisition Strategy 

Defers Key Oversight 

Mechanisms
Page 7 GAO-13-833 Unmanned Carrier-Based Aircraft 

Figure 2: Navy Plans to Develop and Field Initial UCLASS System before 

Milestone B

As indicated above, the Navy plans to award four firm fixed-price 

contracts in fiscal year 2013 to competing contractors to develop 

preliminary designs for the UCLASS air vehicle.11

 11Firm fixed-price contracts provide a firm price to the government. This contract type 

places the risk of increased costs of performance upon the contractor. 

The following year, the 

Navy plans to review those preliminary designs, conduct a full and open 

competition, and award a contract to develop and deliver the UCLASS air 

vehicles, effectively ending competition within the air vehicle segment. A 

review of the full system level preliminary design—including the air 

vehicle, carrier, and control segments—is scheduled for fiscal year 2015. 

DOD policy and best practices indicate that around this review point a 

program would typically be expected to hold a Milestone B review and 

transition from technology development to system development. Figure 3 

illustrates the later point in the process in which the Navy plans to 

establish the UCLASS acquisition program baseline and formally initiate a 

development program.
Page 8 GAO-13-833 Unmanned Carrier-Based Aircraft 

Figure 3: Navy Plan Defers Establishment of UCLASS Acquisition Program Baseline

Although the Navy does not plan to hold a Milestone B review until 2020, 

if at all, it is effectively committing to system development and early 

production in fiscal year 2015. According to the Navy’s strategy, system 

development and early production activities, including system integration 

and air vehicle fabrication, will begin in fiscal year 2015 around the time of 

the system-level preliminary design review. The Navy also expects to 

increase annual funding for the UCLASS system from $146.7 million to 

$522.5 million between fiscal years 2014 and 2015. Testing to 

demonstrate the system’s capabilities is scheduled to take place from 

fiscal year 2017—scheduled first flight—through fiscal year 2020, when 

an early operational capability is expected to be achieved. If the program 

proceeds according to the Navy’s plan, by 2020, it will have completed 

many of the activities typically authorized by a Milestone B decision. 

Moreover, since enough quantities of UCLASS are expected to be 

delivered for operational use on one or more aircraft carriers, the strategy 

could also be seen as having begun early production before a Milestone 

C decision is held.

In a March 2007 report we identified oversight challenges presented by 

an acquisition strategy that calls for proceeding into system development, 

demonstration, manufacturing, and fielding without the benefit of a 

Milestone B decision.12

 12GAO, Defense Acquisitions: Missile Defense Acquisition Strategy Generates Results but 

Delivers Less at a Higher Cost, 

A framework of laws make major defense 

GAO-07-387 (Washington, D.C.: Mar. 15, 2007).
Page 9 GAO-13-833 Unmanned Carrier-Based Aircraft 

acquisition programs accountable for their planned outcomes and cost, 

give decision makers a means to conduct oversight, and ensure some 

level of independent program review. The application of these acquisition 

laws is typically triggered by a program’s entry into system development. 

While the activities the UCLASS program plans to undertake exemplify 

that the program is entering into system development, these laws will not 

be triggered because the program is not holding a Milestone B review and 

formally initiating a development program. Therefore, the UCLASS 

program will not be accountable for establishing a program baseline or for 

reporting any cost growth to that baseline to DOD and Congress.

The UCLASS system faces several risks related to cost, schedule, and 

program management that, if not addressed, could lead to additional cost 

and significant schedule delays for the system. The Navy recognizes that 

many of these risks exist and has mitigation plans in place to address 

them.

• UCLASS cost estimates are uncertain and could exceed available 

funding: Preliminary cost estimates completed by the Navy indicate 

that the development and fielding of the initial UCLASS system 

through fiscal year 2020 could cost between $3.7 and $5.9 billion, all 

of which is expected to be development funding. However, the Navy 

has only projected funding of $3.2 billion for the system through fiscal 

year 2020. The variability in the cost estimates is due largely to cost 

estimating ground rules and assumptions. For example, Navy officials 

stated that the $3.7 billion cost estimate reflects an assumed savings 

of 15 to 20 percent that they believe is achievable since competing 

contractors’ preliminary designs will be relatively mature. Navy and 

DOD officials we spoke with emphasized that no true sense of cost 

will be known until after the air vehicle segment preliminary design 

reviews have been completed and a single contractor has been 

selected. If the preliminary designs are less mature than assumed, 

costs could increase significantly, further exceeding budgeted 

resources.

• Source selection schedule is compressed: After the four 

competing contractors have completed their preliminary air vehicle 

designs, the Navy plans to conduct a full and open competition before 

awarding the air vehicle segment contract. The Navy’s strategy allows 

for about 8 months between the time that it issues its request for air 

vehicle proposals and the time it awards the contract. According to 

UCLASS Faces Cost, 

Schedule, and 

Program Management 

Risks
Page 10 GAO-13-833 Unmanned Carrier-Based Aircraft 

OSD officials, this type of contract award process typically takes 

approximately 12 months.

• UCLASS is dependent on development and delivery of other 

systems: The Navy identifies the delivery of the Common Control 

System software as a risk and notes that if it is delayed, alternative 

control system software would be needed to achieve the established 

deployment timeline.13 Using alternative software would increase 

integration costs and extend the testing timeline, resulting in 

duplicated development, integration, and testing once the common 

control system software is delivered. The Navy expects this risk to be 

mitigated over time as individual segments of the control system 

software are built, delivered, integrated, and tested.

UCLASS is also critically dependent on the development and fielding 

of the Joint Precision Approach and Landing System (JPALS), which 

is a global positioning system-based aircraft landing system that 

guides the aircraft to make a safe landing on the aircraft carrier deck. 

However, in a March 2013 report, we found that the JPALS program 

has experienced significant schedule delays.14

• UCLASS system integration will be challenging: The Navy plans 

to act as the lead systems integrator for all three segments through 

the development and fielding of the initial UCLASS system. The Navy 

will have three separate but interrelated segments to manage, the 

timing and alignment of which are crucial to success of the overall 

Additional JPALS

delays would likely affect the Navy’s UCLASS schedule, in which case 

the Navy may need to identify an alternative landing system for 

UCLASS, thus increasing the cost and delaying delivery of the 

capability. The Navy recognizes this risk. The program office holds 

weekly integrated master schedule reviews with the JPALS program 

and plans to mitigate risk through JPALS testing, initial deployments, 

and continued communication with the JPALS program and other 

Navy offices.

 13The Common Control System is the UCLASS control segment software that implements 

a common framework, user interfaces, applications, and services that will be integrated 

and tested with unique applications and services required by the air vehicle. The Navy is 

developing the software and UCLASS is the first system that will integrate the software.

14GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, 

GAO-13-294SP (Washington, D.C.: Mar. 28, 2013).
Page 11 GAO-13-833 Unmanned Carrier-Based Aircraft 

system. The system is reliant on 22 existing government systems, 

such as JPALS. The Navy recognizes that there is risk associated 

with its role as the lead systems integrator, as it does not routinely act 

in this capacity. Therefore, the Navy plans to manage this risk through 

interaction with industry and regular system level reviews. According 

to program officials, this integration effort will require the number of 

full time equivalent staff in the program office to double from its 

current level of 150 staff to around 300 staff.

While the Navy has not yet established a business case or acquisition 

program baseline, the UCLASS strategy reflects aspects of a knowledgebased approach. Some of these aspects are discussed in more detail 

below:

• Leveraging significant knowledge gained from prior technology 

development efforts: The Navy is planning to maximize the use of 

technologies for carrier-based unmanned aircraft systems operations 

that have been developed under other efforts like the UCAS-D 

program, which recently demonstrated the feasibility of launching and 

landing an unmanned aircraft on an aircraft carrier. Navy officials note 

that they plan to leverage navigation and control technologies, among 

other things, from the demonstration program. By effectively 

leveraging these types of previous investments, along with other 

existing systems and technologies, the Navy could reduce cost and 

schedule for the UCLASS system and promote affordability.

• Incorporating an open systems design approach:15 We reported in 

July 2013 that the Navy is planning to use an open systems approach 

for the UCLASS system.16

 15An open systems approach, which incorporates modular design and open standards for 

key interfaces, can provide numerous cost, schedule, and performance benefits. It allows 

components to be added, removed, modified, replaced, or sustained by consumers or 

different manufacturers in addition to the manufacturer that developed the system. It also 

allows independent suppliers to build components that can plug into the existing system 

through the open connections.

The Navy has identified key system 

interfaces and, according to program officials, plans to require 

contractors to comply with particular open system standards, which it 

believes will reduce acquisition costs and simplify integration. The 

16GAO, Defense Acquisitions: DOD Efforts to Adopt Open Systems for Its Unmanned 

Aircraft Systems Have Progressed Slowly, GAO-13-651 (Washington, D.C.: July 31, 

2013).

UCLASS Acquisition 

Strategy Contains 

Aspects of a 

Knowledge-Based 

Approach
Page 12 GAO-13-833 Unmanned Carrier-Based Aircraft 

Navy also plans to incorporate an open systems architecture 

developed by OSD for the UCLASS system control segment. This 

architecture implements a common framework, user interfaces, 

software applications, and services, and is designed to be common 

across unmanned aircraft systems. DOD estimates that the open 

architecture will reduce costs and allow for rapid integration of 

payloads.

• Matching requirements to available resources: In 2012, the Joint 

Requirements Oversight Council issued a memorandum that required 

the Navy to reduce its UCLASS requirements because at that time 

they were deemed unaffordable. The Joint Requirements Oversight 

Council specifically noted that the Navy’s requirements should focus 

on achieving an affordable, adaptable platform that supports a wide 

range of missions within 3 to 6 years. As a result, the Navy scaled 

down the UCLASS requirements and updated its analysis of 

alternatives to include requirements that are more affordable and 

feasible. Our prior work has found that matching requirements with 

resources before beginning a system development program increases 

the likelihood that the program will meet cost and schedule 

objectives.17

• Holding competition for preliminary designs: In fiscal year 2013, 

the Navy plans to award four firm fixed-price contracts to competing 

contractors to develop and deliver preliminary air vehicle designs. The 

Navy then plans to review those preliminary designs, conduct a full 

and open competition, and award a single air vehicle segment 

contract. The Navy believes that this competition will drive efficiencies 

and ultimately result in cost savings across the system’s life cycle. 

This strategy reflects recent DOD initiatives that emphasize the 

importance of competition, which we have noted in the past, can help 

reduce program costs.18

 17GAO, Best Practices: Capturing Design and Manufacturing Knowledge Early Improves 

Acquisition Outcomes, GAO-02-701 (Washington, D.C.: July 15, 2002); and GAO, Best 

Practices: Better Matching of Needs and Resources Will Lead to Better Weapon System 

Outcomes, GAO- 01-288 (Washington, D.C.: Mar. 8, 2001).

18GAO, Defense Acquisitions: Assessments of Selected Weapon Programs, 

GAO-13-294SP (Washington, D.C.: Mar. 28, 2013).
Page 13 GAO-13-833 Unmanned Carrier-Based Aircraft 

The Navy plans to manage UCLASS as a technology development 

program, although its strategy encompasses activities commensurate 

with system development and early production. The Navy believes the 

strategy provides considerable latitude to manage UCLASS development 

and to demonstrate significant knowledge before the Milestone B 

decision. Indeed, we have often reported that programs tend to move 

forward with Milestone B and system development before they have 

demonstrated enough knowledge. But the Navy’s plan to develop, 

manufacture, and field operational UCLASS systems on up to four aircraft 

carriers before holding a Milestone B decision would defer the decision 

and mechanisms that would otherwise enable oversight of these very 

program activities until after they are over. Without a program baseline 

and regular reporting on progress, it will be difficult for Congress to hold 

the Navy accountable for achieving UCLASS cost, schedule, and 

performance goals. As we have noted, these kinds of risks are present in 

the program and warrant such oversight. Looking ahead to fiscal year 

2020, when the UCLASS system is already being delivered, Congress 

may have few options other than to continue authorizing funding for 

UCLASS manufacturing and fielding.

If the UCLASS program can be executed according to the Navy’s 

strategy, it would be consistent with the normal DOD acquisition process 

that applies to most weapon system programs, with the exception of the 

deferral of the Milestone B review. In fact, the timing of the Milestone B 

review notwithstanding, the actual program activities planned are 

consistent with a knowledge-based acquisition approach. For example, 

the Navy is leveraging knowledge gained from prior technology 

development programs, incorporating an open systems design, matching 

resources with requirements, and utilizing competition. Given the 

competitive preliminary design process planned and subsequent 

competitive contract award, it seems reasonable that a Milestone B 

decision could be held following the competition and before the beginning 

of system development, providing a solid oversight framework with little or 

no change to the strategy’s schedule.

To enhance program oversight and accountability given that the Navy 

does not plan to modify its acquisition strategy and hold a Milestone B 

decision review for the UCLASS system following the system level 

preliminary design review in fiscal year 2015, Congress should consider 

directing the Navy to hold a Milestone B review for the system after the 

system level preliminary design review is complete. 

Conclusions

Matters for 

Congressional 

Consideration
Page 14 GAO-13-833 Unmanned Carrier-Based Aircraft 

If the Navy does not comply, Congress should consider limiting the 

amount of funding available for the UCLASS system until the Navy 

provides the basic elements of an acquisition program baseline, such as 

development and production cost estimates, unit costs, quantities, 

schedules, annual funding profiles, and key performance parameters 

needed for such a large investment. The Navy should also be required to 

periodically report the program’s status against the baseline.

In order to provide for increased congressional oversight and program 

accountability, we recommend that the Secretary of Defense direct the 

Secretary of the Navy to hold a Milestone B decision review for the 

UCLASS system following the system level preliminary design review—

which is currently scheduled in fiscal year 2015.

The Navy provided us with written comments on a draft of this report. The 

Navy’s comments are reprinted in appendix II. The Navy also provided 

technical comments, which were incorporated as appropriate.

The Navy did not concur with our recommendation to hold a Milestone B 

decision review for the UCLASS system following its planned system 

level preliminary design review in 2015. The Navy stated that the Under 

Secretary of Defense for Acquisition, Technology, and Logistics approved 

its UCLASS acquisition strategy in 2013 and certified that the strategy 

was compliant with the Weapon Systems Acquisition Reform Act of 

2009,19

While the Navy’s UCLASS acquisition strategy may be compliant with 

laws and DOD policy, the development, production, and fielding of an 

the amendments made to that Act, and DOD policy. The Navy 

pointed out that DOD’s policy defines the technology development phase 

as an “iterative process designed to assess the viability of technologies 

while simultaneously refining user requirements.” The Navy went on to 

state that the UCLASS user requirements and Concept of Operations will 

be refined during the early operational capability fleet exercises currently 

scheduled to begin in fiscal year 2020 and that, at that time, the Navy 

plans to request approval to hold a Milestone B review to continue 

development of the UCLASS capability.

 19Pub. L. No. 111-23.

Recommendation for 

Executive Action

Agency Comments 

and Our Evaluation
Page 15 GAO-13-833 Unmanned Carrier-Based Aircraft 

operational system before holding a Milestone B review will limit

congressional oversight of a significant investment in weapon system 

development. An estimated development cost of $3.7 billion makes this 

UCLASS investment larger than the majority of DOD’s current major 

weapon system development programs. We agree that the technology 

development phase of an acquisition program is intended to assess the 

viability of technologies while refining requirements. However, the system 

development and early production activities included in the Navy’s 

UCLASS acquisition strategy go well beyond technology development 

and requirements refinement, and thus warrant oversight commensurate 

with a major weapon system development program. Thus, we continue to 

believe that our recommendation is valid and are making two matters for 

congressional consideration to ensure Congress has information 

available to oversee the UCLASS system and to hold the Navy 

accountable for achieving UCLASS cost, schedule, and performance 

goals.

We are sending copies of this report to the Secretary of Defense, the 

Secretary of the Navy, and interested congressional committees. In 

addition, the report is available at no charge on the GAO website at 

http://www.gao.gov.

If you have any questions about this report or need additional information, 

please contact me at (202) 512-4841 or sullivanm@gao.gov. Contact 

points for our Offices of Congressional Relations and Public Affairs may 

be found on the last page of this report. Key contributors to this report are 

listed in appendix III.

Michael J. Sullivan

Director

Acquisition and Sourcing Management
Page 16 GAO-13-833 Unmanned Carrier-Based Aircraft 

List of Committees

The Honorable Carl Levin

Chairman

The Honorable James M. Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Dick Durbin

Chairman

The Honorable Thad Cochran

Ranking Member

Subcommittee on Defense

Committee on Appropriations

United States Senate

The Honorable Howard P. “Buck” McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable C. W. Bill Young

Chairman

The Honorable Pete Visclosky

Ranking Member

Subcommittee on Defense

Committee on Appropriations

House of Representatives
Appendix I: Objectives, Scope, and 

Methodology

Page 17 GAO-13-833 Unmanned Carrier-Based Aircraft 

The National Defense Authorization Act for Fiscal Year 2012 mandated 

that GAO evaluate the Unmanned Carrier-Launched Airborne 

Surveillance and Strike (UCLASS) system acquisition strategy.1

In order to assess the Navy’s UCLASS acquisition strategy, we collected, 

reviewed, and compared the UCLASS acquisition strategy with best 

practice standards for using knowledge to support key program 

investment decisions.

This 

report (1) assesses the Navy’s UCLASS acquisition strategy, (2) identifies 

key areas of risk facing the UCLASS system, and (3) notes areas where 

the Navy’s strategy contains good practices.

2 These standards are based on GAO’s extensive 

body of work in this area. Additionally we compared the Navy’s strategy 

against DOD acquisition policy.3

In order to identify any key areas of risk facing the UCLASS system and 

note areas where the Navy’s strategy contains good practices, we 

collected and reviewed additional UCLASS documentation, such as the 

analysis of alternatives, capabilities development document, and other 

relevant Navy management documents. We discussed the Navy’s 

UCLASS acquisition strategy with officials from the UCLASS system 

program office, the Naval Air Systems Command, the Chief of Naval 

Operations, and organizations within the Office of the Secretary of 

Defense (OSD) including the Director of OSD Cost Assessment and 

Program Evaluation, the Deputy Assistant Secretary of Defense for 

Systems Engineering, and the Under Secretary of Defense for 

Acquisition, Technology, and Logistics.

 1

Pub. L. No.112-81, § 213(b) (2011).

2

GAO developed these standards for using knowledge to support key program investment 

decisions, which are discussed in the report. For more information, see GAO, Defense 

Acquisitions: Assessments of Selected Weapon Programs, GAO-13-294SP (Washington, 

D.C.: Mar. 28, 2013).

3

Department of Defense Instruction 5000.02, Operation of the Defense Acquisition 

System (Dec. 8, 2008).

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 18 GAO-13-833 Unmanned Carrier-Based Aircraft 

We conducted this performance audit from July 2013 to September 2013 

in accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

finding based on our audit objectives. We believe that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives.
Page 19 GAO-13-833 Unmanned Carrier-Based Aircraft 

Appendix II: Comments from the Department 

of Defense
Page 20 GAO-13-833 Unmanned Carrier-Based Aircraft 
Page 21 GAO-13-833 Unmanned Carrier-Based Aircraft 

Michael J. Sullivan, (202) 512-4841 or sullivanm@gao.gov.

In addition to the contact named above, key contributors to this report 

were Travis Masters, Assistant Director; Laura Greifner; Julie Hadley; 

Kristine Hassinger; Laura Jezewski; Matt Lea; John Pendleton; Dr. 

Timothy M. Persons; and Roxanna Sun.

Appendix III: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(121155)
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