December 4, 2021

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Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks

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<div>Global Hawk offers significant military capabilities to capture and quickly transmit high-quality images of targets and terrain, day or night, and in adverse weather--without risk to an onboard pilot. Global Hawk first flew in the late 1990s as a demonstrator and supported recent combat operations in Afghanistan and Iraq. In 2001, the Air Force began an acquisition program to develop and produce improved Global Hawks. In 2002, the Department of Defense (DOD) restructured and accelerated the program to include a new, larger and more capable air vehicle. GAO was asked to review the program and discuss (1) the restructuring's effect on the Air Force's ability to deliver new capabilities to the warfighter and (2) whether its current business case and management approach is knowledge-based and can help forestall future risks.The restructuring of the Global Hawk program impacts the acquisition program in multiple ways. More and accelerated funding: Funding, which previously spanned 20 years, now is compressed in about half the time. The restructured plan requires $6.3 billion through fiscal year 2012; the original plan would have needed $3.4 billion by that time. The budget request is now three times higher for some years. Immature technologies: Several critical technologies needed to provide the advanced capabilities are immature and will not be tested on the new air vehicle until late in the program, after which most of the air vehicles will already have been bought. New requirements, new costs: DOD's desire to add additional Global Hawk capabilities tripled development costs. The program acquisition unit cost increased 44 percent since program start, yet fewer vehicles are to be produced than originally planned. Challenges, trade-offs, and delays: The addition of new capabilities has led to space, weight, and power constraints for the advanced Global Hawk model. These limitations may result in deferring some capabilities. Some key events and activities--many related to testing issues--have been delayed. Global Hawk's highly concurrent development and production strategy is risky and runs counter in important ways to a knowledge-based approach and to DOD's acquisition guidance. The restructuring caused gaps in product knowledge, increasing the likelihood of unsuccessful cost, schedule, quality, and performance outcomes. Because the restructured program is dramatically different from the initial plan for the basic model, the business case now seems out of sync with the realities of the acquisition program.</div>
Department of Defense To decrease risks of poor outcomes and to increase the chances of delivering required warfighter capabilities with the funds available, the Secretary of Defense should direct the Air Force to revisit the decision to begin concurrent development and production of the Global Hawk B design and direct the Air Force to create and present a new business case that defines the warfighter’s needs that can be accommodated given current available resources of technology, engineering capability, time, and money.

Closed – Implemented

DOD did not initially concur with this recommendation, but subsequent events caused them to re-evaluate their position and ultimately implement a new business case and a revised acquisition baseline. In written comments, DOD had contended that the Global Hawk’s acquisition strategy balanced risks with demands to rapidly field new capabilities to the warfighter, obviating a need for a new business case. Since GAO’s report was issued, however, development and procurement costs increased and Congress was notified of a Nunn-McCurdy breach. On June 5, 2006, the Secretary of Defense issued a Nunn-McCurdy certification letter, required when the unit cost increases exceed 25 percent. The certification affirmed that the Global Hawk is essential to the national security, validated new cost estimates, and revised the management structure. Other issues GAO reported on, including the quality and performance of major subcontractors and lack of maturity of key technologies, were also confirmed. Top OSD management and congressional committees criticized the program’s cost and creeping requirements. On March 23, 2007, DOD formally approved the new acquisition program baseline for Global Hawk, creating a new business case in line with our recommendation. Accordingly, we are closing this recommendation as implemented.

Department of Defense To decrease risks of poor outcomes and to increase the chances of delivering required warfighter capabilities with the funds available, the Secretary of Defense should delay further procurement of the Global Hawk B, other than units needed for testing, until a new business case is completed that reduces risk and justifies further investments based on a knowledge-based acquisition strategy.

Closed – Implemented

DOD did not initially concur with this recommendation, but subsequent events caused them to re-evaluate their position and ultimately implement a new business case that reduced annual procurement quantities. Subsequent to the issuance of GAO’s report, both development and procurement costs increased and Congress was notified of a Nunn-McCurdy breach. On June 5, 2006, the Secretary of Defense issued a Nunn-McCurdy certification letter, reporting that unit cost increases exceeded 25 percent. The certification validated new cost estimates, reduced annual buy quantities, and revised the management structure. On March 23, 2007, DOD formally approved the new acquisition program baseline for Global Hawk, including cut backs in procurement quantities. We later issued a financial accomplishment report for $153.7 million based on these budgetary and management actions. Accordingly, we are closing this recommendation as implemented.

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