Unmanned aircraft systems generally consist of (1) multiple aircraft, which can be expendable or recoverable and can carry lethal or non-lethal payloads; (2) a flight control station; (3) information and retrieval or processing stations; and (4) in some cases, wheeled land vehicles that carry launch and recovery platforms. DOD categorizes these systems based on key characteristics including weight and operating altitude. While there were many small, less expensive unmanned aircraft in DOD’s portfolio, our review focused on the larger, more costly programs. At that time, these programs accounted for more than 80 percent of DOD’s total investment in unmanned aircraft from fiscal year 2008 through fiscal year 2013. DOD’s 2011 budget request indicates that the department plans to invest nearly $25 billion from 2010 through 2015 in development and procurement of the unmanned aircraft systems we reviewed. Table 1 details many of the key characteristics and funding requirements of those systems. See appendix I for additional program data. Despite the proven success of unmanned aircraft on the battlefield and the growing demand for the aircraft, these acquisitions continued to incur cost and schedule growth. The cumulative development cost for the 10 programs we reviewed increased by over $3 billion, or 37 percent, from initial estimates. While 3 of the 10 programs had little or no development cost growth and one had a cost reduction, six experienced substantial growth ranging from 60 to 264 percent. This cost growth was in large part the result of changes in program requirements and system designs after initiating development. Many of the programs began system development with unclear or poorly defined requirements, immature technologies, and unstable designs—problems we have frequently found in other major acquisition programs. For example, in 2001, the Air Force began the Global Hawk program based on knowledge gained from a demonstration program, and planned to incrementally integrate more advanced technologies over time. Within a year, however, the Air Force fundamentally restructured and accelerated the program to pursue a larger, unproven airframe with a multimission capability that relied on immature technologies. The final design of the new airframe required more substantial changes than expected. These changes ultimately drove development costs up nearly threefold. Procurement costs also increased for 6 of the 7 systems that reported procurement cost data. Although in large part the cost increases were due to the planned procurement of additional aircraft, many programs had also experienced unit cost increases independent of quantity. As detailed in table 2, overall procurement unit costs increased by 12 percent on average, with three programs experiencing unit cost growth of 25 percent of more. The Reaper and Shadow had unit cost growth despite increased quantities. Reaper’s unit costs increased in part because requirements for missiles and a digital electronic engine control were added—resulting in design changes and increased production costs. Unit cost increases in the Shadow program were largely the result of upgrades to the airframe that were needed to accommodate the size, weight, and power requirements for integrating a congressionally mandated data link onto the aircraft. Furthermore, the Army is retrofitting fielded systems with capabilities that it had initially deferred, such as a heavy fuel engine. A number of programs had experienced problems in both testing and performance, requiring additional development that contributed to the cost growth noted above. Four programs had experienced delays of 1 to nearly 4 years in achieving initial operational capability. Some of these delays resulted from expediting limited capability to the warfighter, while others were the result of system development and testing problems. For example, early demonstration and production Global Hawks were rushed into operational service. Program officials noted that as a result, the availability of test resources and time for testing were limited, which delayed the operational assessment of the original aircraft model by 3 years. Similarly, in February 2009, the Air Force reported that initial operational testing for the larger, more capable Global Hawk aircraft and the program’s production readiness review had schedule breaches. Air Force officials cite the high level of concurrency between development, production, and testing; poor contractor performance; developmental and technical problems; system failures; and bad weather as key reasons for the most recent schedule breach. Consistent with DOD’s framework for acquiring unmanned systems, some of the tactical and theater-level unmanned aircraft acquisition programs we reviewed had identified areas of commonality to leverage resources and gain efficiencies. For example, the Army and Marine Corps achieved full commonality in the Shadow program. In assessing options for replacing an aging tactical unmanned aircraft system, the Marine Corps determined that the Army’s Shadow system could meet its requirements for reconnaissance, surveillance, and target acquisition capabilities without any service-unique modifications. An official from DOD’s Office of Unmanned Warfare emphasized that the Marine Corps believed that Shadow represented a “100 percent” solution. The Marine Corps also found that it could use the Army’s ground control station to pilot the Shadow aircraft as well as other Marine Corps unmanned aircraft. A memorandum of agreement was established in July 2007 to articulate how the Marine Corps and the Army would coordinate to acquire Shadow systems. By forgoing any service-unique modifications in order to achieve a high level of commonality, the Marine Corps avoided the costs of developing the Shadow. Additionally, the Marine Corps and Army are likely to realize some benefits in supporting and maintaining the systems because the components are interchangeable. The Army’s Shadow program office agreed that commonality has allowed the two services to realize economies of scale while meeting each service’s needs. According to an official at the Navy, the Marine Corps has been able to realize savings or cost avoidance in other areas such as administration, contracting, and testing, although quantitative data on these savings were not available. In some cases, the services had collaborated to identify common configuration, performance, and support requirements, but ultimately were not maximizing efficiencies. For example, the Army and Navy had different data link requirements for their respective variants of Fire Scout, primarily because of the Army’s requirement for its variant to operate within the Future Combat Systems network. According to the Fire Scout contractor, the Army’s system could have been equipped with the same data link as the Navy Fire Scout, as well as the Army’s Shadow and Sky Warrior systems, and placed into service sooner. Though the services had not agreed on a common data link, the Army and Navy had settled on common Fire Scout requirements for the air vehicle, engine, radar, navigation, and some core avionics subsystems requirements. The services had also agreed to use one contract to procure the airframe. However, in an information letter sent to members of Congress on January 11, 2010, the Army noted that it had terminated the Fire Scout portion of its FCS contract—following a decision by the Office of the Secretary of Defense (OSD) to cancel the FCS program—because analysis indicated that an improved Shadow system could meet future Army requirements, and the Fire Scout was no longer needed. Cancellation of the Army Fire Scout could lead to increased unit cost for the Navy variant. Although the Navy BAMS and Air Force Global Hawk programs had identified commonalities between their airframes, the two programs had established different payload, subsystem, and ground station requirements. The Navy anticipated spending more than $3 billion to modify the Global Hawk airframe and ground stations, and to integrate Navy-specific payloads, including the radar. In addition, we found that the Navy had an opportunity to achieve greater efficiency in BAMS production. While production of the first two BAMS aircraft was planned to occur at the same California facility that produces Global Hawk, the remaining aircraft were expected to be produced at a facility in Florida. We pointed out that this approach might create duplication in production by staffing and equipping two facilities to conduct essentially the same work. At the time of our review the Navy had not assessed the costs or benefits of establishing a second production facility, and according to contractor officials, the official business case analysis would not be conducted for several years. Therefore, it was unclear whether any benefits of a second production facility would outweigh costs, such as additional tooling and personnel. In contrast to the examples of the Shadow, Fire Scout, and BAMS / Global Hawk programs above, the Army and Air Force missed opportunities to achieve commonality and efficiencies between their Sky Warrior and Predator programs. In 2001, the Army began defining requirements for a replacement to the aging Hunter unmanned aircraft system, and decided to pursue the development of Sky Warrior. Both the Air Force and the Joint Staff responsible for reviewing Sky Warrior’s requirements and acquisition documentation raised concerns about duplicating existing capability— specifically, capability provided by Predator. Nevertheless, the Army program received approval to forgo an analysis of alternatives that could have determined whether or not existing capabilities met its requirements. The Army noted that such an analysis was not needed and not worth the cost and effort. Instead, it conducted a source selection competition and began the Sky Warrior development program in 2005, citing battlefield commanders’ urgent need for the capability. The development contract was awarded to the same contractor working with the Air Force to develop and produce Predators and Reapers. Since the Sky Warrior is a variant of the Predator, the two aircraft are assembled in the same production facility. Despite the establishment of a memorandum of understanding in 2006, direction from the Deputy Secretary of Defense in 2007 to combine their programs, and a subsequent memorandum of agreement, the Army and Air Force maintained separate programs and at the time of our review, had achieved little commonality. While several of the unmanned aircraft programs we examined had achieved commonality at the airframe level, service-centric acquisition processes and ineffective collaboration resulted in service-unique subsystems, payloads, and ground control stations. Despite DOD’s efforts to encourage a joint approach to identifying and prioritizing warfighting needs and to emphasize the need for commonality among the programs, we noted that the individual services continued to drive requirements and make independent resource allocation decisions. In many cases, the services had established requirements so specific that they demanded service-unique solutions, thereby precluding opportunities for commonality.