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. 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. 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. 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. 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. 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.