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

Letter

Background

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.

Some ISR Development Programs Have Experienced Problems That Have Led to Cost Growth, Delays, and Additional Investments in Legacy Systems

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.

Cost, Schedule, and Performance Status of Airborne ISR Programs

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.

Impact of Delays on Legacy Systems

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.

Aerial Common Sensor

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.

Opportunities Exist for Greater Collaboration across the Services’ ISR Programs

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.

Army and Navy’s Collaboration on Fire Scout Has Achieved Efficiencies

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.

Collaboration on Broad Area Maritime Surveillance Could Yield Similar Efficiencies

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.

Collaboration Slow to Occur on Warrior and Predator

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.

DOD Efforts to Improve Collaboration

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.

Conclusions

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.

Recommendations for Executive Action

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.

Agency Comments and Our Evaluation

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.

Appendix I: Objectives, Scope, and Methodology

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.

Appendix II: System Descriptions

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.

Airborne Reconnaissance Low

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.

Airborne Signals Intelligence Payload

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.

Broad Area Maritime Surveillance Aircraft System

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.

E-10A

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.

Fire Scout (Army)

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.

Fire Scout (Navy)

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.

Joint Surveillance, Target, Attack, Radar System

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.

Global Hawk

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.

Guardrail Common Sensor

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.

Multi-mission Maritime Aircraft

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.

Multi-Platform Radar Technology Insertion Program

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.

Predator

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.

Reaper

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.

Rivet Joint

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.

Space Radar

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.

U-2

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.

Warrior

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.

Appendix III: ISR Studies Under Way or Recently Completed

Program Decision Memorandum III, dated December 2005 directed that several studies be undertaken. Those studies included the following.

Joint ISR Replacement Study

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.

U-2 Retirement Study

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.

Airborne ISR Requirements

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.

Optimization of ISR Capabilities

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.

Task Force on Integrating Sensor- Collected Intelligence

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.

Appendix IV: Comments from the Department of Defense