San Diego Union-Tribune April 2, 2006
Global Hawk's soaring costs blasted
GAO assails Pentagon for high-risk strategy
By Bruce V. Bigelow
When San Diego aerospace engineer Alfredo Ramirez sketched his first design for the Global Hawk more than a decade ago, he wanted to create a robotic spy plane that could fly above harm's way at altitudes above 60,000 feet.
Since then, Air Force officials have gushed about the unmanned jet's capabilities, including the performance of an early model that flew more than 100 missions over Iraq, Afghanistan and the Horn of Africa.
But the Global Hawk has not been able to evade flak from the Government Accountability Office over its spiraling cost.
Last month, the GAO criticized Pentagon leaders for adopting a high-risk strategy for the program, which accelerated development of a bigger and more advanced version of the Global Hawk UAV, or unmanned aerial vehicle. The GAO concluded that changes ordered in 2002 have resulted in substantially higher costs and delays.
The GAO now says that procurement costs have soared to nearly $6.66 billion – or $130.5 million – for each Global Hawk aircraft. That includes the costs for all aircraft, ground stations, support equipment and spares.
In its 41-page report, the GAO contrasted the Global Hawk's development with that of the Predator, a rival unmanned aircraft developed in San Diego by General Atomics Aeronautical Systems. The GAO complimented GA Aeronautical Systems for adopting a process that was more evolutionary, and it found the total procurement cost for the second-generation Predator B is now $1.21 billion – or $19.2 million – per UAV.
For Northrop Grumman, which took over the Global Hawk program with its 1999 buyout of San Diego's Ryan Aeronautical, such criticism has become a sensitive topic.
The company, the Air Force and the Office of the Secretary of Defense contend they took the right approach in developing an essential new surveillance technology.
By flying at 65,000 feet, the Global Hawk serves a role that has been met for more than 50 years by the legendary U-2 spy plane.
But U-2 missions usually must end in 10 or 11 hours because of pilot fatigue. The Global Hawk can remain aloft for nearly two days, using its electronic sensors to collect high-resolution images of areas the size of the state of Illinois. The UAV also can relay its data by satellite to military leaders in the Pentagon and to ground units in the area.
Yet the GAO has criticized the Global Hawk since 2004, when the overall estimated cost of the program soared to $6.3 billion, a 16.6 percent increase over the $5.4 billion set in 2001.
The Pentagon has disputed the GAO's findings, concluding in a 2004 response that the GAO did not take into account the changes necessary to counter the threats that followed the terrorist attacks of Sept. 11, 2001.
In a statement last week, Northrop Grumman again disputed the GAO's findings, saying: “At a time of war, the need for time-sensitive intelligence information is critical. This essential requirement drove the need to begin production on the program, while continuing to develop, test and insert new technology into Global Hawk.”
The company also noted that early models of the Global Hawk developed for flight tests were instead pressed into service to support “the global war on terrorism, completing more than 5,400 combat flight hours to date.”
Northrop Grumman says its own estimate of the cost for a first-generation model Global Hawk is $21 million for each jet aircraft, and the electronic sensors cost an additional $11 million. The mission control system used to control the aircraft cost another $11 million.
That brings the total cost to roughly $43 million, although the ground control system is used with more than one UAV. The company estimates its cost of a second-generation Global Hawk RQ4-B at $56.5 million, which includes a bigger jet aircraft at $29 million and a more advanced sensor package at $16.5 million.
So how does the GAO get $130.5 million per Global Hawk?
The difference is that the GAO counts everything, including testing and other expenditures, said Ed Walby, a director of business development at Northrop Grumman's unmanned systems business in Rancho Bernardo.
“It is literally the entire program's cost, divided by the number of aircraft,” Walby said. The costs provided by Northrop Grumman, on the other hand, represent the incremental cost of buying one more Global Hawk.
Both numbers are valid, said John Pike, director of GlobalSecurity.org, a Web-based institute focused on defense, aerospace and national security issues.
“You want to look at both of them,” Pike said. But it is important to understand what each number represents. “You have to look at the total program cost, though, because that is what the taxpayer is actually paying.”
Costs for a program like the Global Hawk can depend on the different sensors and electronics options that are used, said Steve Zaloga of Teal Group Corp., a defense industry consultant in Fairfax, Va.
“It's a Chinese menu type of situation, and there are a whole bunch of options,” Zaloga said.
Nevertheless, Zaloga said accurate numbers are important because costs inevitably become a key issue in the political battles that surround military procurement programs.
Zaloga said he prefers to use the unit cost set by the Air Force in its advance procurement budget, which is now $71.92 million for each fully equipped Global Hawk.
The implications for Global Hawk are significant because the market for unmanned aircraft has become bigger and more competitive.
In the decade before the Sept. 11 terrorist attacks, the Pentagon invested $3.6 billion in unmanned aircraft systems, according to last month's GAO report. It plans to spend nearly $24 billion by 2011.
“It's a market that almost didn't exist five years ago, and it's now very competitive,” Pike said.
For example, the defense analyst suggested that GA Aeronautical Systems may pose a new challenge by moving into Northrop Grumman's airspace.
He pointed to dramatic improvements GA Aeronautical Systems has made to its second-generation Predator B that have increased the airplane's range, endurance and capacity.
The first-generation Predator A is a propeller-driven airplane and flies at an altitude of 25,000 feet. The Predator B is bigger, with a jet-powered turboprop that can reach 50,000 feet and carry 16 “Hellfire” anti-tank missiles.
“If I was driving the Global Hawk and saw what they did with the Predator B,” Pike said, “I think I'd be really worried what the Predator C is going to look like.”
© Copyright 2006, Union-Tribune Publishing Co.
