Defense Acquisitions: Greater Synergies Possible for DOD's Intelligence, Surveillance, and Reconnaissance Systems
Published: 2007-05-17T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense (DOD) is experiencing a growing demand for intelligence, surveillance, and reconnaissance (ISR) assets to provide vital information in support of military operations. Over the next 7 years, DOD plans to invest over $28 billion in existing and new airborne ISR acquisition systems. This represents a marked increase over prior ISR investments. Given the significant investments, GAO was asked to (1) evaluate various ISR platforms for potential synergies and assess their cost and schedule status and the impact of any increases or delays on legacy systems and (2) assess the effectiveness of ISR investment decisions. To assess cost and schedule status, we reviewed programmatic and budget documentation. To evaluate investment decisions, we collected information on system capability, mission, and concept of operation and analyzed the data for similarities.
section_title: What GAO Found
paragraphs: DOD plans to invest over $28 billion over the next 7 years to develop, procure, and modernize 20 major airborne intelligence, surveillance and reconnaissance systems. Nearly all of the systems in development have experienced cost growth or schedule delays. These problems have delayed the fielding of a warfighting capability and have resulted in program restructuring, cancellation, or unplanned investments in older legacy ISR systems. For example, problems in developing the Aerial Common Sensor affected three legacy programs, increasing their collective budgets by 185 percent, or nearly $900 million. In many cases, GAO found that the newer ISR programs lacked a solid business case or a knowledge-based acquisition strategy before entering the development process. A good business case requires the manager to match the system requirements with mature technologies and a system design that can be built. This requires sufficient knowledge about the system gained through basic system engineering concepts and practices. Although it fights jointly, DOD does not always procure new systems jointly. Instead, each service typically develops and procures systems independently. Opportunities exist for different services to collaborate on the development of similar weapon systems as a means for creating a more efficient and affordable way of providing new capabilities to the warfighter. GAO identified development programs where program managers and services are working together to gain these efficiencies and other programs that have less collaborative efforts and could lead to more costly stovepiped solutions. For example, the Navy and Army have collaborated successfully on the Fire Scout, but in contrast, the Air Force and Army have not been as collaborative on the Predator and Warrior systems, as they each currently plan unique solutions to their similar needs.

section_title: Letter
paragraphs: Over the next 7 years, the Department of Defense (DOD) plans to invest  Over the next 7 years, the Department of Defense (DOD) plans to invest  over $28 billion to develop, procure, and modify 20 major airborne  over $28 billion to develop, procure, and modify 20 major airborne  intelligence, surveillance, and reconnaissance (ISR) systems and maintain  intelligence, surveillance, and reconnaissance (ISR) systems and maintain  existing systems until the new ones are fielded. This planned investment  existing systems until the new ones are fielded. This planned investment  represents a significant increase over past ISR investments and comes in  represents a significant increase over past ISR investments and comes in  response to threats that have emerged over the past decade and the high  response to threats that have emerged over the past decade and the high  priority commanders have placed on gathering battlefield intelligence.  priority commanders have placed on gathering battlefield intelligence.
Given the significant planned investment in ISR and DOD’s recent focus on  Given the significant planned investment in ISR and DOD’s recent focus on  its acquisition strategy, you asked us to review DOD’s ISR acquisition  its acquisition strategy, you asked us to review DOD’s ISR acquisition  strategy. Specifically, we (1) evaluated various ISR platforms for potential  strategy. Specifically, we (1) evaluated various ISR platforms for potential  synergies and assessed their cost and schedule status and the impact of  synergies and assessed their cost and schedule status and the impact of  any increases or delays on legacy systems (2) assessed the effectiveness of  any increases or delays on legacy systems (2) assessed the effectiveness of  ISR investment decisions.  ISR investment decisions.
To assess the cost and schedule status of ISR systems, we reviewed  To assess the cost and schedule status of ISR systems, we reviewed  programmatic and budget documentation. To evaluate the effectiveness of  programmatic and budget documentation. To evaluate the effectiveness of  decisions for planned investments, we collected information on system  decisions for planned investments, we collected information on system  capability, mission, and concept of operation and analyzed the data for  capability, mission, and concept of operation and analyzed the data for  similarities. We also discussed the results of our analyses with officials at  similarities. We also discussed the results of our analyses with officials at  the program office; Army, Navy, and Air Force headquarters; the Under  the program office; Army, Navy, and Air Force headquarters; the Under  Secretary of Defense for Intelligence; and the Joint Chief of Staff for  Secretary of Defense for Intelligence; and the Joint Chief of Staff for  Intelligence. (For more on our scope and methodology, see app. I.) We  Intelligence. (For more on our scope and methodology, see app. I.) We  conducted our work between June 2006 and April 2007 in accordance with  conducted our work between June 2006 and April 2007 in accordance with  generally accepted government auditing standards.  generally accepted government auditing standards.
In addition to this report, GAO is conducting two related review efforts for  In addition to this report, GAO is conducting two related review efforts for  the committee. These efforts will review and report on (1) DOD’s process  the committee. These efforts will review and report on (1) DOD’s process  to set requirements for ISR systems and (2) DOD’s process for integrating  to set requirements for ISR systems and (2) DOD’s process for integrating  unmanned aerial systems (UAS) into ongoing combat operations in  unmanned aerial systems (UAS) into ongoing combat operations in  support of ISR requirements. Two separate reports on these issues will be  provided later in 2007.
subsections: section_title: Background
paragraphs: ISR directly supports the planning and conduct of current and future  military operations. ISR encompasses multiple activities related to the  planning and operation of sensors and assets that collect, process, and  disseminate data. Intelligence data can take many forms, including electro- optical (EO) and infrared (IR) images, full-motion video (FMV), images  from a synthetic aperture radar (SAR), electronics intelligence (ELINT),  communications intelligence (COMINT), and measures and signature  intelligence (MASINT). These data can come from a variety of sources,  including surveillance and reconnaissance systems that operate in space  or on manned or unmanned systems. Data can also come from systems  that are ground- or sea-based or from human intelligence teams. Table 1  summarizes the ISR programs that we reviewed, 13 of which are in  development. (A brief description of each of the 20 programs we reviewed  is provided in app. II.)
DOD plans significant investments in airborne ISR systems. For example,  between fiscal years 2007 and 2013, DOD plans to invest $28.8 billion in  the 20 systems we reviewed. (See table 2.)
Congress has also recognized the need in acquiring UAS. For example, it  added funding between fiscal years 2003 and 2005 to enable the Air Force  to accelerate procurement of the Reaper UAS. Over those 3 years,  Congress increased the Reaper budget over $70 million, directing the Air  Force to procure a total of 8 additional air vehicles. Similarly, the Navy  Fire Scout budget was increased by $17 million in fiscal year 2006 to  procure 2 additional air vehicles. In fiscal year 2003, the Global Hawk  budget was increased by $90 million, primarily to develop advanced  payloads for signals and imagery intelligence capabilities.
section_title: Some ISR Development Programs Have Experienced Problems That Have Led to Cost Growth, Delays, and Additional Investments in Legacy Systems
paragraphs: Nearly all of the 13 airborne ISR programs in development that we  reviewed have experienced some cost or schedule growth.  Cost and  schedule growth in these programs is largely the result of a poor business  case or acquisition strategy that failed to capture sufficient knowledge  about the product technologies and design before committing to the  development and demonstration of a new system. Significant delays in the  delivery of some new systems, breaking the investment strategy (for the  new and legacy systems to be replaced) established at the start of these  acquisition programs, have required DOD to make additional unplanned  investments in legacy systems in order to keep them relevant and  operational longer than planned. Delays in the Aerial Common Sensor  (ACS) aircraft have required DOD to make additional unplanned  investments in three Army and Navy legacy aircraft systems in order to  keep them relevant and operational longer than planned. These additional  investments, totaling about $900 million, represent opportunity costs that  could have been used for other needs within DOD.
subsections: section_title: Cost, Schedule, and Performance Status of Airborne ISR Programs
paragraphs: Of the 13 airborne ISR programs in development, 1 has experienced  significant cost growth and 9 have experienced schedule delays that range  from 2 months to 60 months. Table 3 summarizes ISR programs that have  encountered problems either in development or as they prepared to begin  the system development and demonstration phase of an acquisition  program.
Many of these programs began development without an executable  business case and did not have a good acquisition strategy to capture  critical system knowledge at the key decision milestones. Our work on  best commercial practices has shown that before a company invests in  product development, it should develop a sound business case—one that  validates user requirements and determines that the concept can be  successfully developed with existing resources—to minimize the risks  associated with such a commitment. For DOD, an executable business  case provides demonstrated evidence that (1) the warfighter need is valid  and that it can best be met with the chosen concept, and (2) the concept  can be developed and produced with proven technologies, existing design  knowledge, and available funding and time. To implement the business  case, programs must develop a realistic acquisition strategy, one that  includes critical program knowledge—such as technology maturity,  system design, and manufacturing and production processes—at key  points in the acquisition. DOD’s acquisition policy endorses a knowledge- based approach to acquisition and includes strategies to reduce  technology, integration, design, manufacturing, and production risks.
Global Hawk is an example of a program that failed to implement best  practices for developing a new weapon system and encountered  significant cost and schedule problems. It initially began with an  incremental acquisition strategy that approached best practice standards  for technology and design maturity. However, after development began the  Air Force abandoned this strategy and radically restructured the program  to develop and acquire a larger, more advanced aircraft that would have  multimission capabilities (both signals intelligence and imagery  intelligence sensors on the same aircraft). This new strategy called for  concurrent technology development, design, test, integration, and  production in a compressed schedule. As a result, the program has been  rebaselined four times, the development schedule has been extended by   3 years, and the program has experienced a substantial contract cost  overrun. Development costs alone have increased over 260 percent. In  addition, unit costs have increased to the point where statutory reporting  thresholds were triggered, requiring DOD to recertify the fundamental  program need to Congress.
section_title: Impact of Delays on Legacy Systems
paragraphs: The ACS and Global Hawk programs’ failures to develop an executable  acquisition strategy have resulted in significant delays in delivering  required capabilities to the warfighter at the time overall investment  decisions were made. These delays will have significant implications for  legacy systems. Specifically, the services must now make difficult  decisions about investing in legacy systems to keep them operational until  the new systems have been developed and fielded.
subsections: section_title: Aerial Common Sensor
paragraphs: The Army’s termination of the ACS system development and  demonstration contract could have significant cost, schedule, and  performance impacts on three legacy airborne systems in the ISR  portfolio—the Army’s Guardrail Common Sensor aircraft (GRCS) and  Airborne Reconnaissance Low aircraft (ARL) and the Navy’s EP-3 aircraft.  The Army and the Navy had planned a phased approach to field ACS and  retire the legacy systems from the inventory with a minimal investment in  maintaining legacy systems. In the fiscal year 2004 budget, the Army had  planned for small investments in GRCS and ARL because it expected to  begin replacing them with ACS in 2009. In that same budget, the Navy’s  request reflected its plan to modify the EP-3. By the time DOD submitted  its fiscal year 2008 budget, both services recognized the need to keep  legacy systems capable because the ACS development contract was  canceled. Therefore, the budget included funding to keep these legacy  systems operational for a longer period of time.
Since the termination of the ACS development contract, the program has  reverted to a technology development stage as the Army restructures the  program. ACS is scheduled to restart system development and  demonstration in 2009, 5 years later than the initial development decision.  Although the Army has not established a new date for initial operating  capacity, that date is also likely to slip by 5 years to fiscal year 2014. The  cost to keep GRCS and ARL mission equipment viable and the platforms  airworthy during this time is estimated to be $562 million between fiscal  years 2008 and 2013, an increase of $550 million over what had been  previously planned. Without these improvements, the systems will not  remain capable against modern threats, possibly resulting in a gap in ISR  capabilities on the battlefield. In addition, the platforms could not  continue to fly during this time frame without increased structural and  avionic modifications.
The Navy had planned to replace its EP-3 with ACS and begin fielding the  new system in fiscal year 2012. After the Army terminated the ACS  development contract, the Navy considered remaining part of the Army’s  development effort. However, according to Navy officials, the Chief of  Naval Operations directed the Navy to proceed with a separate  development effort, designated the EPX. The Navy now plans to proceed  with system development and demonstration in the fourth quarter of fiscal  year 2010. The Navy has not established a date to begin fielding the new  system, but that is not likely to take place before 2017. This will be a 5-year  slip in retiring the oldest EP-3 systems and will make modifications to  those systems necessary so that they can remain in the field until the Navy  achieves full operating capacity for its EPX. The Navy plans to invest   $823 million between fiscal years 2008 and 2013 to modify the EP-3, an  increase of 73 percent over the $475 million that was previously planned.
Table 4 summarizes the budgetary impact of the delay in developing and  fielding ACS on the legacy systems it was to replace.
The Air Force plans to replace the U-2 with the Global Hawk, but delays in  the Global Hawk program have contributed to the need to keep the U-2 in  the inventory longer than anticipated. In December 2005, the Air Force had  planned to begin retiring the U-2 in fiscal year 2007 and complete the  retirement by fiscal year 2012. Although the next configuration of the  Global Hawk (with limited signals intelligence capability) is scheduled for  delivery in fiscal year 2009, it will not have the same capability as the U-2.  The version of the Global Hawk that plans to include a more robust signals  intelligence capability is scheduled to begin deliveries in 2012. The Air  Force is now developing a plan to fully retire the U-2s a year later, in 2013,  and at a slower rate than in the 2005 plan. There are no funds in the budget  beyond fiscal year 2006, but Air Force officials stated they intend to fund  projects necessary to keep the U-2 capable. Figure 1 shows the rate at  which the Air Force had planned to retire the U-2 and the revised  retirement plan compared to Global Hawk fielding.
section_title: Opportunities Exist for Greater Collaboration across the Services’ ISR Programs
paragraphs: Among the ISR acquisition programs we reviewed, we found specific cases  where the military services have successfully collaborated and achieved  savings of time and resources. The Army estimated that for its Fire Scout  program, buying common components with the Navy Fire Scout program  would save $200 million in development costs alone and that there were  greater opportunities for savings. However, we also found cases where  more collaboration is needed to provide greater efficiencies and jointness  in developing more affordable new systems and to close gaps in  capabilities. These programs include the potential for greater  collaboration between the Navy Broad Area Maritime Surveillance  (BAMS) and the Air Force Global Hawk programs, and the Air Force  Predator and Army Warrior programs.
subsections: section_title: Army and Navy’s Collaboration on Fire Scout Has Achieved Efficiencies
paragraphs: In 2000, the Navy began development of the Fire Scout, a vertical takeoff  and landing UAS for use on surface ships. At the same time, the Army  began concept development for its Future Combat Systems (FCS)  program. The Army Fire Scout was selected for the Future Combat  Systems in 2003. Although these programs were not required to work  jointly or collaborate, Army Fire Scout program managers contacted their  counterparts in the Navy to determine whether efficiencies could be  achieved through collaboration.
Officials from the two programs met several times to share information on  their respective aircraft’s configuration, performance requirements,  testing, support, and other issues. Initially the requirements for the two  systems were quite different. For example, the Army’s UAS had four rotor  blades and a larger engine, while Navy’s system had three rotor blades and  a smaller engine. However, after discussions, the Navy officials  determined that the Army’s Fire Scout aircraft would meet their needs and  decided to switch to the Army’s configuration. Both services are buying  common components, such as the air vehicle and flight components,  under one contract.
An Army program management official estimated that the savings to the  Army in research and development alone would be about $200 million.   As both programs mature, the official believes additional synergies and  savings could be realized through contract price breaks on quantities and  shared test assets, such as air vehicles, support equipment, and test  components. Jointly acquiring common hardware under one contract will  also reduce procurement administrative lead time and permit common  design, tooling, and testing. Finally, future payload development, such as  communications, sensors, and data links, could be procured jointly.
section_title: Collaboration on Broad Area Maritime Surveillance Could Yield Similar Efficiencies
paragraphs: In 2000, the Navy identified a mission need for a broad area maritime and  littoral ISR capability and on the basis of a 2002 analysis of alternatives,  the Navy decided to pursue a manned platform, the Multi-mission  Maritime Aircraft (MMA), with an unmanned adjunct, BAMS. The Navy  subsequently performed an analysis of alternatives for the BAMS program,  which identified several potential alternatives; foremost among them was  the Global Hawk system. As a risk reduction effort, the Navy funded the  Global Hawk Maritime Demonstration program in 2003. Working through  the existing Air Force contract, the Navy procured two Global Hawk UAS  and associated ground controls and equipment. The demonstration  program was expected to leverage the existing Global Hawk system to  develop tactics, training, and techniques for maritime mission  applications.
The BAMS program is at a critical juncture. It released a request for  proposals in February 2007 and plans to proceed with system development  and demonstration in October 2007. If the Global Hawk (or another  existing system like the Air Force Reaper) is selected, there are  opportunities for the Navy to work with the Air Force and take advantage  of its knowledge on the existing platform. Through collaboration, the Navy  could leverage knowledge early in the acquisition process and avoid or  reduce costs for design, new tooling, and manufacturing, and streamline  contracting and acquisition processes.
section_title: Collaboration Slow to Occur on Warrior and Predator
paragraphs: Despite similarities in the Predator and Warrior programs, the Air Force  and Army have repeatedly resisted collaboration. The Air Force’s Predator  is a legacy program that has been operational since 1995. Its persistent  surveillance/full motion video capability continues to be a valued asset to  the warfighter. However, when the Army began in 2001 to define  requirements for the Warrior, a system similar to the Predator, it did not  fully explore potential synergies and efficiencies with the Air Force  program. The Army did not perform an analysis of alternatives to explore  other options to a new system; it cited the urgent need of battlefield  commanders for the capability. In lieu of an analysis of alternatives, the  Army conducted a full and open competition and awarded the contract to  the same contractor producing the Predator. Although the requirements  for the Warrior were subsequently validated, reviewing officials from the  Air Force and the Joint Staff raised concerns about duplication of an  existing capability.
Both Congress and the Office of the Secretary of Defense (OSD) have  raised concerns about duplication between the two systems. During  question and answer sessions at various Congressional hearings, members  of Congress sought an explanation of the need for both systems. In  addition, OSD commissioned an industrial capabilities study to assess  whether the contractor for the Predator and the Warrior had sufficient  capacity to produce both systems at the same time. While the study did not  find any major production constraints, it concluded that the two systems  were 80 percent common. In January 2006, the Army and Air Force agreed  to consider cooperating on the acquisition of the two systems. However,  progress to date in implementing the agreement has been limited due  partly to differences in operating concepts for the two services. Unlike the  Air Force, the Army does not use rated pilots; it relies on technicians and  automated takeoff and landing equipment. In addition, the Army uses  direct-line-of-sight communications, while the Air Force uses beyond-line- of-sight communications. Despite these inherent differences, there are still  many areas available for collaboration, including airframes, ground  stations, and equipment.
The Air Force and the Army are currently working to identify program  synergies in a three-phased approach:    First, the Air Force will acquire and test two of the more modern  Warrior airframes.
Second, the two services will compare their requirements for ground  control stations and automated takeoff and landing.
Finally, the Army and Air Force plan to compare concepts of operation  and training requirements for additional synergies.
To date, the Army has coordinated the proposed approach through the  Vice Chief of Staff level, but the agreement has not yet been approved by  the Department of Army. The Air Force is still working to resolve  comments and concerns at lower organizational levels. In the interim, the  Air Force has greatly increased the number of Predator aircraft it plans to  procure annually to meet the high demand from the warfighter for this  capability, increased in part by the war on terror. Instead of buying   7 Predator aircraft per year, as the Air Force had initially planned, it now  plans to buy 24 aircraft in both 2007 and 2008, as well as another   22 aircraft as stated in the fiscal year 2007 supplemental request. In total,  the Air Force plans to buy 160 Predators between fiscal years 2008 and  2013.
The Air Force is currently seeking authority to become the executive agent  for medium- and high-altitude UAS operating above 3,500 feet. As a part of  its efforts, in March 2007 the Air Force began a comprehensive study of all  existing and planned (airborne and space-based) ISR systems. As  executive agent, the Air Force believes it could improve the allocation of  UAS, avoid duplication of separate service acquisition efforts by  centralizing procurement, standardize downlinks, and control burgeoning  bandwidth requirements. However, the Air Force still intends to procure  two Warriors for testing, but details of a potential collaboration with the  Army remain uncertain.
Timing on the Army and Air Force’s collaboration is critical: The longer  the services wait to collaborate, the lower the return. The opportunity to  achieve synergies in design, manufacturing, and support will greatly  diminish as the Warrior matures and more and more Predators are added  to the inventory.
section_title: DOD Efforts to Improve Collaboration
paragraphs: The environment in which DOD operates has changed significantly since  2001. In recognition of this, the department’s 2006 Quadrennial Defense  Review described a vision that focuses on defining ISR needs based on the  type of intelligence or sensor rather than on the platform that carried the  sensor. Specifically, the department’s vision for ISR is to establish  persistent surveillance over the battlefield and define ISR sensor needs in  terms of the type of intelligence needed rather than the air, surface, or  space platform in which they operate. Accordingly, the department  initiated a number of studies aimed at reviewing ISR requirements and  developing solutions either through new development programs or  changes in current systems (see app. III for a brief description of these  studies). While most of the studies have been completed, as of March 2007,  DOD had released the results of only one—the Joint ISR study, which  validated the requirement and confirmed the continued need for the  Army’s ACS program. The results of the other studies have not been  released outside of DOD, but according to DOD officials, several were  briefed to senior leadership within OSD and the Joint Staff.
One study DOD is undertaking has some promise to better manage the  requirements for future ISR capabilities across DOD by applying a joint  capability portfolio management concept to acquisition planning. This  pilot program is a test case to enable DOD to develop and manage ISR  capabilities across the entire department—rather than by military service  or individual program—and by doing so, to improve the interoperability of  future capabilities, minimize capability redundancies and gaps, and  maximize capability effectiveness. However, the portfolios are largely  advisory and will, as a first step, provide input to decisions made through  the acquisition and budgeting process. At this point the capability portfolio  managers have not been given direct authority to manage fiscal resources  and make investment decisions. Without portfolios in which managers  have authority and control over resources, DOD is at risk of continuing to  develop and acquire systems in a stovepiped manner, and of not knowing  whether its systems are being developed within available resources.
In addition to the various studies previously initiated, two more studies  were recently commissioned in February and March of 2007. The Under  Secretary of Defense for Acquisition, Technology, and Logistics requested  that the Defense Science Board establish a task force to assess whether  current and planned ISR systems provide sufficient support for U.S.  military forces. The objectives of the study are to (1) determine what  improvements are needed for ISR systems, (2) examine the balance and  mix of sensors to identify gaps and redundancies, and (3) identify  vulnerabilities, potential problems, and consistency with DOD network  centered strategy. The Secretary also asked the task force to review the  findings of previous studies as part of the assessment. In addition, the  Chief of Staff of the Air Force recently began a comprehensive study of all  existing and planned airborne and space-based ISR systems to determine  their efficiencies and inefficiencies. The effort includes developing a plan  to increase interdependence of medium- and high-altitude UAS and  establish the Air Force as the executive agent for all UAS in those regimes.  A specific date for reporting the results of these two studies has not been  established.
section_title: Conclusions
paragraphs: Many ISR systems suffer from the same cost, schedule, and performance  problems as other DOD acquisition programs by failing to establish a good  business case or capture critical product knowledge at key decision points  before moving forward in the acquisition process. In some cases, the  outcomes have been costly as legacy systems, once planned for an earlier  retirement, must now stay in the inventory, requiring additional unplanned  investments to keep them relevant and operationally ready until a new  capability can be fielded. The funds spent to keep these systems viable  represent opportunity costs that could have been used for other DOD  priorities. GAO has made numerous recommendations in recent years to  improve the acquisition process and get more predictable outcomes in  major acquisition programs, and these would apply to the development of  ISR systems.
Ideally, because of the warfighter’s universal needs for ISR information,  determining requirements and planning for ISR acquisition programs  should be based on a joint process that occurs at the enterprise level in  DOD to ensure economies and efficiencies based on effective joint  solutions to the maximum extent possible. DOD has various studies in  process that appear to have this as a goal for ISR, but for now it is not  routinely happening. The portfolio management pilot program could  potentially improve how DOD determines requirements and sets up new  acquisition programs for ISR capabilities. However, the portfolios are  largely advisory, and the managers have no direct authority to make  investment decisions. Without authority and control over investments  there is the risk that nothing will change. At best for now, there are some  acquisition programs that through their own initiative have garnered  benefits from collaborative efforts. Others still choose a stovepiped  approach to provide a unique system for the specific military service’s  needs.
section_title: Recommendations for Executive Action
paragraphs: While DOD has numerous ISR studies, either recently completed or  ongoing, there have been no substantive actions recently implemented to  gain greater jointness in ISR acquisition programs. Therefore, we  recommend that DOD  1.  Develop and implement an integrated enterprise-level investment  strategy approach that is based on a joint assessment of  warfighting needs and a full set of potential and viable alternative  solutions, considering cross-service solutions including new  acquisitions and modifications to legacy systems within realistic  and affordable budget projections for DOD. This strategy should  draw on the results of ongoing studies, like the portfolio  management pilot program, but should include the necessary  authority and controls needed to ensure a single point of  accountability for resource decisions.  2.  Report to the defense committees by August 1, 2007, the results of  the ISR studies and identify the specific plans and actions needed  and intended to make joint acquisition decisions in ISR programs  and improve the way it plans, buys, organizes, manages, and  executes its ISR acquisition programs and operations.
section_title: Agency Comments and Our Evaluation
paragraphs: DOD provided us with written comments on a draft of this report. The  comments appear in appendix IV.
DOD agreed that it can report the interim status of ongoing ISR studies to  the committees by August 1, 2007, but suggested that delaying this  reporting until December 31, 2007, would allow the department to include  the results of two pertinent studies now ongoing. We believe a full  reporting in December 2007 would be useful if it includes DOD’s detailed  plans on how it will achieve an integrated enterprise-level investment  strategy for ISR including planned changes to policy and guidance,  organization, and points of authority and responsibility. However, we  believe an interim reporting to the committees on the results and planned  outcomes from completed studies should be provided to the committees  by August 2007.
DOD agreed with our recommendation to develop and implement an  integrated enterprise-level investment strategy for ISR and stated that it  thought this process was well under way in existing department processes.  However, it non-concurred with having a single point of authority and  control for ISR resource decisions and provided a number of arguments as  to why sufficient information was not included in the report to support  this specific part of the recommendation. We continue to believe that our  recommendation for an enterprise-level investment strategy with a single  point of accountability for resources decisions is necessary to maximize to  the full extent efficiency and effectiveness in acquiring major acquisition  systems. The Defense Science Board Summer Study on Transformation  reported in February 2006 came to similar conclusions: that the Secretary  of Defense should assemble a small direct-reporting cell to create and  maintain a metric-based, multiyear plan that specifies what is to be done,  when, with what resources, and with what capability output. It concluded  the Under Secretary of Defense for Acquisition, Technology, and Logistics  needs authority over architectures, resources, and personnel. Our other  review efforts of the acquisition and requirements processes continue to  show that DOD has not sufficiently improved the process to ensure cross- service redundancies are reduced or eliminated where possible. Therefore,  without this single point of authority, limited defense resources are still  not optimally used to develop and produce weapon systems. Our  comments below address the specific arguments presented in DOD’s  response to this report.
We believe that many of the ongoing initiatives to achieve a greater  integrated investment strategy approach for ISR are steps in the right  direction but are concerned that they will not go far enough to address the  problems that have occurred in DOD acquisitions for some time now. DOD  suggests that the Joint Capabilities Integration and Development System  (JCIDS) has been implemented to identify joint warfighting capabilities.  We agree that the JCIDS emphasizes a more joint approach to identifying  and prioritizing warfighting needs. However, as reported in our March 30,  2007 report, Best Practices: An Integrated Portfolio Management  Approach to Weapon System Investments Could Improve DOD’s  Acquisition Outcomes, this system is still not working as planned. Despite  the provisions of JCIDS, needs continue to be based on investment  decision-making processes that do not function together to ensure DOD  pursues needs that are not redundant. The Warrior decision is an example  where the service chose to ignore the recommendations of the Joint  Requirements Oversight Council and proceeded with a unique program.
DOD stated that its Portfolio Management Experiment supports this  enterprise-level strategy, but it is still a pilot program and actual changes  to the processes have not been identified to show how it will ensure more  responsible and joint decision making for major acquisition programs. As  pointed out in the report, while this seems like a good first step, portfolios  are largely advisory and managers have not been given direct authority to  manage fiscal resources and make investment decisions. Without this  authority, DOD continues to risk stovepiped solutions that may overlap  and not be affordable within available resources. Furthermore, it seems  within the last few years the real input from DOD leadership comes at the  end of the year, right before the budget is supposed to go to Congress. In  December each year a Program Budget document is issued by the Office of  the Secretary of Defense that has included radical changes to major  acquisition programs but without the transparency as to the detailed  analysis and integrated investment planning that should have taken place  to make these major investment decisions.
In its response, DOD also states that a number of successes have occurred  within the Unmanned Aerial Systems portfolio managed by the Office of  Under Secretary of Defense for Acquisition, Technology, and Logistics.  While there may be some successful UAS programs, there are also  examples of large, important programs that have significantly exceeded  cost estimates and delivery dates. We believe that having a UAS portfolio  is contrary to the direction of the Quadrennial Defense Review to get away  from “platform”-based decisions and move toward “sensor”-based  decisions. The Battlespace Awareness Functional Capabilities Board, as  part of the JCIDS process, seems to be a more representative grouping of  ISR programs than the UAS portfolio. We believe if properly organized  based more on “sensor” requirements, then it would not be necessary to  have both for ISR investment decision making.
DOD states that we did not consider the department’s ongoing efforts to  develop UAS and ISR Roadmaps that represent, according to them,  enterprise-level strategies. While we did not review these as part of this  review, GAO has ongoing work under a different engagement that is  looking at the ISR Roadmap. The initial conclusions from that review were  presented to the House Armed Services Subcommittee on Air and Land  Forces in testimony on April 19, 2007. GAO testified that the ISR  Roadmap was a noteworthy step in examining ISR capabilities but it does  not represent a comprehensive vision for the ISR enterprise or define  strategy to guide future investments. Furthermore, the ISR Roadmap is  managed by the Office of the Under Secretary of Defense for Intelligence,  while the UAS Roadmap is managed by the Office of the Under Secretary  of Defense for Acquisition, Technology, and Logistics. This difference  emphasizes the need for a single point for ISR investment decisions within  OSD.
Finally, DOD states that the report does not recognize ground component  requirements and operating concepts for multiple joint missions and that it  did not recognize the benefits of acquisition programs with unique  requirements or the benefits of competition. We believe the report, as it  relates to the decision to buy a unique platform for the Warrior, did  recognize the difference in how the two services planned to operate the  platforms. However, we do not believe that it necessarily excuses DOD to  buy two different platforms to satisfy the warfighter’s expressed ISR  requirement. Furthermore, we believe it has been the unique stovepiped  solutions of the military services that have over time created unnecessary  duplication and inefficient use of limited defense funding. As to  competition, GAO has consistently expressed its belief that with proper  controls and oversight competition is beneficial to price, reliability,  performance, and contractor responsiveness in buying major weapon  systems.
We are sending copies of this report to the Secretary of Defense and  interested congressional committees. We will also make copies available  at no charge on the GAO Web site 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 were  Michael Hazard, Assistant Director; Dayna Foster; Rae Ann Sapp; Michael  Aiken; and Karen Sloan.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This report examines the Department of Defense (DOD) development and  acquisition of airborne intelligence, surveillance, and reconnaissance (ISR)  systems. The primary focus of this work is to identify practices and  policies that lead to successful fielding of weapon systems to the  warfighter at the right time and for the right price. Specifically, our  objectives were to (1) evaluate various ISR platforms for potential  synergies and assess their cost and schedule status and the impact of any  increases or delays on legacy systems and (2) evaluate the effectiveness of  ISR investment decisions. Our work was conducted between June 2006  and April 2007 in accordance with generally accepted government auditing  standards.
We selected 20 major airborne ISR programs in technology or systems  development, already fielded but undergoing significant upgrade, or  operating in the field but due to be replaced by a system in development  and one space-based program in technology development. We considered  a program in development to be major if DOD designated it as a major  defense acquisition program or would be likely do so at Milestone B. We  considered systems already operating in the field as major if they played a  role in current operations.
For the systems we selected, we obtained information on current or  projected operational capabilities, acquisition plans, cost estimates,  schedules, and estimated budgets. We analyzed the data to determine  whether pairs of similar systems shared common operating concepts,  capabilities, physical configurations, or primary contractors. We reviewed  acquisition plans for programs in development to determine whether they  had established sound business cases or if not, where the business case  was weak. We reviewed cost and schedule estimates to determine whether  they had increased and, where possible, identified reasons for the  increases. For systems in development that experienced a schedule delay,  we determined whether the delay had an impact on the legacy system to  be replaced and, where possible, determined the cost or capability impact  of the delay. We assessed the reliability and validity of agency official- provided and third-party data by discussing the data with officials from  multiple agencies at varying levels of responsibility. We also discussed the  results of our reviews and analyses with program office officials; Army,  Navy, and Air Force acquisition and requirements officials; the Office of  the Under Secretary of Defense for Intelligence; and the Office of the Joint  Chief of Staff for Intelligence.
section_title: Appendix II: System Descriptions
paragraphs: The Army is planning to develop the Aerial Common Sensor (ACS) as an  airborne ISR and target acquisition system and is designing it to provide  timely intelligence data on threat forces to the land component  commander. The platform will be a piloted business jet and will carry a  suite of sensors to collect information on electronics and communications  signals, optical and infrared images, measures and signatures, and  synthetic aperture radar (SAR) images. Four onboard intelligence analysts  will operate the mission equipment, but with the appropriate connectivity,  the system can perform its mission with just the flight crew. The ACS will  replace the Guardrail Common Sensor and the Airborne Reconnaissance  Low airborne systems and will coexist with current systems until it is  phased in and current systems retire. The Army has not established a date  for initial operating capacity. ACS was to have replaced the Navy EP-3 as  well. However, the Navy recently decided to pursue its own development  program and expects to enter system development in 2010.
subsections: section_title: Airborne Reconnaissance Low
paragraphs: Airborne Reconnaissance Low (ARL) is composed of communications  intelligence and imagery intelligence sensors and onboard operators in a  piloted aircraft. The current inventory includes two configurations; one  with a complete communications sensor package capable of intercepting  and locating radio emissions and providing reports to appropriate  commanders and intelligence-processing centers on the ground. The more  capable version combines communications and electro-optical (EO)  sensors and SAR with moving target indicator onto one aircraft. The ARL  will eventually be replaced by ACS.
section_title: Airborne Signals Intelligence Payload
paragraphs: The Airborne Signals Intelligence Payload (ASIP) is a signals intelligence  (SIGINT) sensor being developed for use on multiple Air Force platforms.  It is a part of Air Force efforts to modernize its SIGINT processes by  developing an Air Force-wide capability for performing SIGINT. ASIP  sensors will be developed for use on the legacy U-2 and Rivet Joint  manned aircraft. It will also be used on legacy and developmental  unmanned aerial systems (UAS) to include the MQ-1 (Predator) and RQ-4B  Global Hawk. The details about its capabilities are classified.
section_title: Broad Area Maritime Surveillance Aircraft System
paragraphs: The Broad Area Maritime Surveillance (BAMS) UAS is scheduled to begin  systems development in October 2007. The BAMS system will be land- based and provide a high-altitude, persistent ISR capability to the fleet and  joint forces commander. BAMS will conduct continuous maritime and  littoral surveillance of targets. As part of the Navy’s maritime patrol and  reconnaissance force, it will operate independently or in conjunction with  the Multi-mission Maritime Aircraft (MMA) and EP-3/EPX signals  intelligence platform. Because the BAMS has not yet begun system  development, vehicle design and sensor payload decisions have not been  finalized, but will include active imaging radar, passive optical imaging,  and limited signals collection capability. Its projected initial operational  capability is 2013.
section_title: E-10A
paragraphs: The E-10A Program originally consisted of three primary elements: the  aircraft, the radar, and the battle management command and control  system. The aircraft proposed for the E-1OA was the Boeing 767 jet  aircraft. The radar was to be the Multi-Platform Radar Technology  Insertion Program, an advanced radar that provides capability for cruise  missile defense through air moving target indicator as well as enhanced  ground moving target indicator. The program was reduced from a  technology development program to a demonstration effort. The  demonstration effort was focused on assessing the newer radar, which will  also be used on the Global Hawk UAS. However, the Air Force recently  canceled the demonstration effort.
The EP-3E Airborne Reconnaissance Integrated Electronics System  (ARIES) II is the Navy’s only land-based SIGINT reconnaissance aircraft.   It is a legacy aircraft based on the Navy’s Orion P-3 airframe and provides  fleet and theater commanders worldwide with near-real-time tactical  SIGINT. It uses sensitive receivers and high-gain dish antennas to perform  its mission. The Navy had planned to replace this aircraft with the Army  ACS because the EP-3 airframe is aging and has a limited life span.  Drawdown of the EP-3E aircraft was scheduled to begin in the 2012 time  frame but may be extended. Delays in ACS development contributed to the  Navy’s recent decision to pursue its own replacement for the EP-3.
The EPX is the Navy’s replacement for its aging EP-3. In late summer 2006,  after a study on joint ISR requirements had been completed, the Navy and  Army concluded that there were significant requirements differences  between the two services. As a result, the Chief of Naval Operations  directed the Navy to recapitalize the EP-3 to provide multi-intelligence  capability. While requirements for the EPX have not been fully established,  it will be a multi-intelligence platform and will include communications  and electronics intelligence capability, optics, and radar. EPX is part of the  maritime patrol and MMA and BAMS.
section_title: Fire Scout (Army)
paragraphs: The Army Fire Scout is being developed as one of the UAS within the  Future Combat Systems. As part of this system of systems, the Fire Scout  is designed to support air-ground operations and reconnaissance,  surveillance, and target acquisition missions. It will employ SAR with  moving target indicator, EO sensors and a laser rangefinder/designator, a  tactical signals intelligence package, and the joint tactical radio system  communications suite. The Fire Scout is designed to take off and land in  unimproved areas to directly support brigade combat team operations. Its  initial operating capability is tied to the Future Combat Systems, which is  planned for December 2014.
section_title: Fire Scout (Navy)
paragraphs: The Navy Fire Scout, or the vertical takeoff and landing unmanned aerial  vehicle system, (VTUAV), entered systems development in February 2000.  The Fire Scout is designed to provide ISR as well as targeting data and  damage assessments to tactical users. It is capable of autonomous vertical  takeoff and landing on aircraft carriers as well as unprepared landing  zones. The Fire Scout includes EO/IR sensors, a laser designator system,  and a common automatic recovery system. The modular payload approach  also includes the tactical control system, tactical common datalink, and a  mine detection system. Its initial operating capability is planned for  October 2008.
section_title: Joint Surveillance, Target, Attack, Radar System
paragraphs: Joint Surveillance, Target, Attack, Radar System (STARS) is a joint Air  Force and Army wide area surveillance attack radar system designed to  detect, track, and classify and support the attack of moving and stationary  targets. Joint STARS is a legacy platform first used in the 1991 Gulf War.   It has been used extensively in support of Operations Enduring and Iraqi  Freedom. The Joint STARS fleet of aircraft is currently being modified  with new communication and navigation equipment, and the Air Force is  developing advanced mission capabilities and identifying low-cost  emerging technologies for future use. In addition, the Air Force intends to  replace Joint STARS engines to make the platform more reliable and  reduce operating and support costs. Finally, the Air Force had originally  intended to place Multi-Platform Radar Technology Insertion Program  (MP-RTIP) on Joint STARS but decided not to when it chose to go forward  with the E-10A, which was subsequently canceled.
section_title: Global Hawk
paragraphs: The Global Hawk is a high-altitude, long-endurance UAS designed to  provide near-real-time high-resolution ISR imagery. It employs a SAR,  ground moving target indicator, and EO/IR sensors. After a successful  technology demonstration, the Global Hawk entered development and  limited production in March 2001. Production of the initial seven (RQ-4A)  aircraft is complete. The larger, more capable version (RQ-4B) includes an  advanced signals intelligence payload and improved radar technologies.  Initial operational capability is planned for September 2007.
section_title: Guardrail Common Sensor
paragraphs: Guardrail Common Sensor (GRCS) is an airborne signals intelligence  collection location and exploitation system in the current inventory that  provides near-real-time signals intelligence and targeting information to  tactical commanders. The system integrates a communications  intelligence sensor and precision geolocation of signals. The platform is a  small, piloted aircraft with no onboard analysts. The Army plans on  eventually replacing GRCS with the ACS.
section_title: Multi-mission Maritime Aircraft
paragraphs: The Navy’s MMA is part of the broad area maritime family of systems. The  MMA was initially planned to interoperate with the BAMS UAS and the  ACS. The MMA is intended to replace the Navy’s P-3C Orion system. Its  primary role will be that of anti-submarine and anti-surface warfare, and it  will have some ISR capability. The Navy plans for the aircraft to achieve  initial operational capability in 2013.
section_title: Multi-Platform Radar Technology Insertion Program
paragraphs: The MP-RTIP is a family of scalable, advanced radars that are being  developed for the RQ-4B Global Hawk and the E-10A. The Air Force  funded the sensor development under the E-10A budget line as a separate  item. The radar is currently in system development and demonstration.  However, in February 2007, the Air Force removed funding for the E-10A  radar development program starting in fiscal year 2008. The Air Force still  intends to develop the radar for the Global Hawk and begin fielding the  sensor by 2011.
section_title: Predator
paragraphs: The Predator is a medium-altitude long-endurance UAS. The Predator  began as an advanced concept technology demonstration program and has  been operational since 1995. Originally designed as a persistent ISR  platform, it was modified in 2001 to carry two Hellfire missiles. The  Predator employs EO/IR sensors, laser designator, day/night cameras that  produce full motion video of the battlefield, and can be configured to carry  SAR. Used as an armed reconnaissance system, the Predator also has a  multi-spectral targeting system with Hellfire missile targeting capability.  The Air Force has begun an effort to develop and integrate signals  intelligence capability on the Predator. To accelerate this effort, the Air  Force increased this budget by a factor of almost 6 in fiscal year 2008.
section_title: Reaper
paragraphs: The Reaper (formerly Predator B) is a multirole medium- to high-altitude  endurance UAS. Its primary mission is a persistent hunter-killer for small  ground mobile or fixed targets. Its secondary mission is to gather ISR data.  It will use EO/IR sensors, laser rangefinder/designator, and SAR, and will  carry ordnance such as the Joint Direct Attack Munitions and Hellfire  missiles. The Reaper entered systems development in February 2004. Its  initial operating capability is planned for 2009. The Air Force has begun to  examine the feasibility of incorporating signals intelligence capability on  the Reaper.
section_title: Rivet Joint
paragraphs: Rivet Joint (RJ) is a reconnaissance aircraft in the current inventory that  supports theater- and national-level consumers with near-real-time on- scene intelligence collection, analysis, and dissemination capabilities. The  aircraft is an extensively modified C-135 with a suite of onboard sensors,  which allows the mission crew to detect, identify, and geolocate signals  throughout the electromagnetic spectrum. The mission crew can then  forward gathered information in a variety of formats to a wide range of  consumers via the system’s extensive communications suite. The interior  seats 34 people, including the cockpit crew, electronic warfare officers,  intelligence operators, and in-flight maintenance technicians. The first  versions of the system were deployed in 1964, but have undergone  extensive upgrades to both the platform and mission equipment. The Air  Force does not have any plans to replace the system.
section_title: Space Radar
paragraphs: Space Radar (SR) is an Air Force-led, joint DOD, and intelligence  community program to develop a satellite to find, identify, and monitor  moving or stationary targets under all weather conditions on a nearly  continuous basis across large swaths of the earth’s surface. As envisioned,  SR would generate volumes of radar imagery for transmission to ground-,  ship-, air-, and space-based systems. Initial capability is planned for 2017.
section_title: U-2
paragraphs: The U-2 provides continuous day-and-night, high-altitude, all-weather  surveillance and reconnaissance in direct support of U.S. and allied  ground forces. It is a single-engine and single-seat ISR aircraft. The U-2 is  capable of collecting multisensor, photo, EO/IR, and radar imagery as well  as collecting SIGINT data. It can downlink all data except wet film. The Air  Force proposed to begin retiring the U-2 in 2007. However, Congress  disagreed with the decision and prevented retirement in 2007. Congress  also directed the Air Force to first certify that the capability was no longer  required. In March 2007, the Air Force revised the schedule from removing  the U-2 from the inventory and proposes doing so at a slower rate than  before beginning in fiscal year 2008. The Air Force is not requesting  funding for the U-2 past 2007, but it is not clear whether the Air Force has  provided the certification that Congress requested.
section_title: Warrior
paragraphs: The extended range, multipurpose Warrior UAS began systems  development in April 2005. It will operate with manned aviation assets  such as the Apache helicopter and perform missions including  reconnaissance, surveillance, and target acquisition/attack. It is being  developed to satisfy the Army’s requirement for a UAS that is dedicated to  the direct operational control of its field commanders. The Warrior is  designed with an automatic takeoff and landing system, full motion video  capability, tactical signals intelligence payload, multirole tactical common  data link, EO sensors, SAR/ moving target indicator, Ethernet  communications capability, and redundant avionics. Its initial operational  capability is planned for 2010.
section_title: Appendix III: ISR Studies Under Way or Recently Completed
paragraphs: Program Decision Memorandum III, dated December 2005 directed that  several studies be undertaken. Those studies included the following.
subsections: section_title: Joint ISR Replacement Study
paragraphs: The Army and Navy, in coordination with the Air Force, Joint Staff, Under  Secretary of Defense for Policy, Under Secretary of Defense for  Intelligence (USD(I)), and Program Analysis and Evaluation (PA&E), were  directed to conduct a study of joint multi-intelligence airborne ISR needs,  focusing on trade-offs among manned and unmanned airborne platforms  and how those trade-offs translate into requirements for recapitalizing the  Army, Navy, and Air Force legacy systems. The participants were directed  to identify any resources in addition to the fiscal year 2006 President’s  budget program of record to sustain the Army and Navy aircraft until they  can be replaced. The study was completed in late summer of 2006 and  concluded that the requirements for the ACS were still valid.
section_title: U-2 Retirement Study
paragraphs: The Strategic Command, in coordination with the Air Force; Navy; Under  Secretary of Defense for Acquisition, Technology, and Logistics  (USD(AT&L)); USD(I); and PA&E were directed to review the Air Force’s  Global Hawk acquisition and U-2 retirement plan and determine if high- attitude, long-endurance, multi-intelligence ISR requirements will be  satisfied during the transition. The findings were briefed within the Office  of the Secretary of Defense (OSD) in early fall 2006.
section_title: Airborne ISR Requirements
paragraphs: USD(I), in conjunction with the Joint Staff, services, and PA&E was  directed to develop a methodology to migrate to a capability-centric focus,  instead of a platform-centric focus, for determining combatant  commander and joint task force airborne ISR requirements. Results were  briefed within OSD in early fall 2006.
section_title: Optimization of ISR Capabilities
paragraphs: On March 5, 2007, the Air Force Chief of Staff announced the start of a  comprehensive study of all existing and planned ISR systems—both  airborne and spaced-based—to consider the efficiencies and inefficiencies  in the theater and global warfighting templates. As part of this broad  effort, he advocated that the Air Force immediately become the executive  agent for medium- and high-altitude UAS. The expected benefits from the  study and executive agent concept include improving distribution of  intelligence assets across all theaters and components, avoiding  duplication of acquisition efforts, standardizing UAS operations and  downlinks, and controlling ballooning bandwidth requirements. The  results of the study will include a comprehensive plan to optimize ISR  capabilities, due in late April 2007.
section_title: Task Force on Integrating Sensor- Collected Intelligence
paragraphs: In February 2007, the Under Secretary of Defense for Acquisition,  Technology, and Logistics requested that the Defense Science Board  establish a task force to assess whether current and planned ISR systems  provide sufficient support for U.S. military forces. The primary objective  is to determine what improvements are needed in carrying out the tasks  associated with ISR systems. A second objective is to examine the mix and  balance of ISR sensors to identify gaps and redundancies. The task force  was also asked to examine current and planned systems for  vulnerabilities, new opportunities and potential problems, and consistency  with department strategy for networked operations. Finally, the  memorandum also asked the task force to review the results of a number  of studies, initiated by OSD and completed in the fall of 2006, following the  completion of the 2006 Quadrennial Defense Review. Several of these  studies are summarized in this appendix. The tasking memorandum did  not include time frames for completion of the study or for reporting the  results.
section_title: Appendix IV: Comments from the Department of Defense