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entitled 'Unmanned Aerial Vehicles: Changes in Global Hawk's 
Acquisition Strategy Are Needed to Reduce Program Risks' which was 
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Report to the Chairman, Subcommittee on Tactical Air and Land Forces, 
Committee on Armed Services, House of Representatives: 

November 2004: 

UNMANNED AERIAL VEHICLES: 

Changes in Global Hawk's Acquisition Strategy Are Needed to Reduce 
Program Risks: 

GAO-05-6: 

GAO Highlights: 

Highlights of GAO-05-6, a report to the Chairman, Subcommittee on 
Tactical Air and Land Forces, Committee on Armed Services, House of 
Representatives: 

Why GAO Did This Study: 

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.

What GAO Found: 

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 (see figure below).
* 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.

Global Hawk’s Annual Funding Requirements: 

[See PDF for image]

[End of figure]

What GAO Recommends: 

GAO recommends the Air Force revisit the decision to concurrently 
develop and produce the newer Global Hawk and create a new business 
case that defines warfighter needs and available resources. GAO also 
recommends that production be delayed (other than those units needed 
for testing) until the new business case is approved. DOD disagrees 
that these actions are needed because it believes risks are being 
managed effectively and GAO’s approach would require more time and 
money to implement the program.

www.gao.gov/cgi-bin/getrpt?GAO-05-6.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Michael J. Sullivan at 
(202) 512-4163 or sullivanm@gao.gov.

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

Restructured Global Hawk Program Attempts to Do More in Less Time: 

Global Hawk Program's Current Management Approach Sets Stage for 
Additional Risks: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: Comments from the Department of Defense: 

Appendix III: Knowledge Gaps at Critical Knowledge Points: 

Related GAO Products: 

Tables: 

Table 1: Key Characteristics of Global Hawk RQ-4A and RQ-4B Models: 

Table 2: Global Hawk Program's Cost, Quantity, and Unit Costs: 

Table 3: How Global Hawk Product Knowledge Compares with Three Critical 
Points in the Knowledge-Based Approach: 

Figures: 

Figure 1: Global Hawk RQ-4A: 

Figure 2: Global Hawk's Annual Funding Requirements: 

Figure 3: Restructured 2004 Plan Is Highly Concurrent Compared with 
Original Global Hawk Plan: 

Figure 4: Global Hawk Program Is Not Fully Aligned with DOD's 
Acquisition Policy and Knowledge-Based Approach: 

Letter November 5, 2004: 

The Honorable Curt Weldon: 
Chairman: 
Subcommittee on Tactical Air and Land Forces: 
Committee on Armed Services: 
House of Representatives: 

The Air Force's Global Hawk is a high-flying unmanned aerial vehicle 
that can capture detailed images of targets as well as wide swaths of 
terrain and transmit those images on a near real-time basis to 
battlefield commanders and intelligence centers. With an ability to see 
through clouds, sandstorms, and other inclement weather conditions day 
or night and to fly for more than a day, Global Hawk can significantly 
improve the Department of Defense's (DOD) ability to gather 
intelligence, surveillance, and reconnaissance[Footnote 1] information 
about potential adversaries without risking an onboard pilot. An early 
model performed well in the ongoing global war on terrorism, and the 
Secretary of Defense identified Global Hawk as having the potential to 
transform military operations. The Air Force began the acquisition 
program in 2001. With total program cost estimated at $6.3 billion, 
Global Hawk is currently DOD's most expensive unmanned aerial vehicle. 
The Navy is considering Global Hawk for a maritime surveillance 
mission, and other federal agencies, several foreign countries, and the 
North Atlantic Treaty Organization have all expressed an interest in 
this aircraft system.

In 2002, DOD restructured the program, accelerating development and 
production, and, more importantly, changing the design significantly to 
a new, larger, heavier, and more capable air vehicle to handle both 
imagery and signals intelligence missions.[Footnote 2] Given Global 
Hawk's overall importance to DOD, you asked us to review the program. 
This report discusses (1) the restructuring's effect on the Air Force's 
ability to deliver new capabilities to the warfighter in terms of 
funding, acquisition strategy, cost, and other related issues and (2) 
whether the current business case and management approach is knowledge-
based and can help forestall future risks.

To determine the effects of restructuring on the Global Hawk program's 
cost, schedule, and performance goals, we reviewed the original 
acquisition strategy, two major restructurings, and the current 
acquisition strategy. We assessed changes to funding, annual budget 
requests, the number of vehicles to be procured, vehicle capabilities, 
and program cycles for developing, testing, and procuring Global Hawk. 
To evaluate the program's likelihood of meeting its objectives, we 
compared the current acquisition strategy with criteria established in 
DOD's acquisition policy[Footnote 3] and with best practices and 
experiences of leading commercial firms and successful government 
acquisitions. This methodology, which we call a knowledge-based 
approach, enabled us to evaluate whether the program achieved product 
knowledge at the right times in terms of technology, design, and 
production maturity. We identified gaps in product knowledge, reasons 
for those gaps, and risks associated with inadequate knowledge. We 
performed our review from February 2004 to September 2004 in accordance 
with generally accepted government auditing standards. More details 
about our methodology are in appendix I.

Results in Brief: 

The Global Hawk program has changed dramatically since the March 2001 
decision to start both system development and low-rate production. The 
program has been restructured twice to add the requirement for a 
totally new and larger Global Hawk design to be developed and produced 
in less time. Program funding, which previously had been stretched 
relatively evenly across 20 years, is now compressed into roughly half 
the time, tripling Global Hawk's budgetary requirements in some years. 
In fiscal year 2006, for example, the program now plans to request 
about $750 million from Congress, three times what was planned 
originally. The restructurings expanded the development period by 5 
years and compressed production by 9 years, creating significant 
concurrency between development and production from fiscal year 2004 to 
2010. Because of this concurrency, the Air Force plans to invest in 
almost half of the total fleet of the new larger Global Hawks before a 
production model is flight-tested and completed to show that the air 
vehicle design works as required. Likewise, full-rate production will 
begin before the airborne signals intelligence and multiplatform radar 
(the two required capabilities justifying the new, larger model) 
complete development and are flight-tested to prove the integrated 
system will work as intended. The primary reason for building the RQ-4B 
model was to integrate and carry the advanced sensors to provide added 
capability to the warfighter. The program's total cost estimates have 
increased by nearly $900 million, driven by a threefold increase in 
development costs to pay for the development of a new and larger air 
vehicle. As a result, the program acquisition unit cost increased 44 
percent since the program started. Finally, in the past 2 years, the 
program has deferred some key capabilities and experienced delays that 
can impact getting capabilities to the warfighter.

The Air Force's restructured strategy does not fully follow the 
evolutionary, knowledge-based approach espoused by best practices and 
DOD's revised acquisition guidance. A knowledge-based approach 
encourages managers to attain the necessary product knowledge at key 
points to support investment decisions, ensuring, for example, that 
technologies are mature before starting an acquisition program and that 
the design is stable before beginning manufacturing. This approach 
includes incremental or evolutionary development, which sets up a more 
manageable environment for attaining and applying knowledge and is 
intended to increase the chances of delivering a quality weapon system 
to the warfighter quickly and cost effectively. While the original 
acquisition strategy more closely adhered to this approach, the 
restructured strategy has caused gaps in knowledge about technology, 
design, and manufacturing at major investment decision points. These 
actions changed the underpinnings of the program's original business 
case and increased the likelihood of future cost increases and schedule 
delays in delivering the capabilities expected by the warfighter. Air 
Force and contractor officials have established a wide range of 
management controls to help mitigate risks. While some of these 
controls may increase visibility into risks, the history of successful 
product development programs has shown that risk mitigation plans do 
not work optimally unless they are based on knowledge appropriate for 
decisions that must be made at critical junctures.

We are recommending that the Secretary of Defense direct the Air Force 
to revisit the decision to concurrently develop and produce the new 
Global Hawk design. The Secretary should direct the Air Force to 
conduct and present a new business case that defines the warfighter 
needs that can be accommodated given current available resources of 
technology, engineering capability, time, and money. To keep risks from 
increasing beyond current levels in this program, we also recommend the 
Secretary delay further procurement of the new Global Hawk, other than 
units needed for testing, until a new business case is completed that 
reduces risk and justifies further investments on a knowledge-based 
acquisition strategy. DOD disagreed with both recommendations, stating 
that risks are being effectively managed and that our approach would 
take more time and more money to implement. We continue to believe that 
our recommendations would improve congressional and DOD oversight, 
reduce program risks, and save time and money over the life of the 
program through a more rigorous and comprehensive application of 
knowledge-based practices.

Background: 

The Global Hawk unmanned aerial vehicle system is designed to support 
warfighting and peacekeeping missions by providing decision makers with 
up-to-date information about potential adversaries' locations, 
resources, and personnel. Operators on the ground can change Global 
Hawk's navigation and direct the onboard sensors to survey a geographic 
area the size of Illinois within a 24-hour cycle. As a high-altitude, 
long-endurance aircraft, Global Hawk was originally designed to reach 
an altitude of 65,000 feet and fly for up to 35 hours.

Global Hawk began in 1994 as an acquisition concept technology 
demonstration program, managed first by the Defense Advanced Research 
Projects Agency and, since 1998, by the Air Force. Seven demonstrator 
aircraft were eventually produced; three have since been destroyed in 
mishaps. The demonstrator models logged several thousand-flight hours 
and effectively supported combat operations in Afghanistan and Iraq. 
The system passed a military usefulness assessment, completed several 
demonstrations and other tests, and DOD judged it a success. However, 
testing identified that significant improvements in reliability, sensor 
performance, and communications were needed before producing 
operationally effective and suitable systems.

In March 2001, DOD approved the Global Hawk for a combined start of 
system development and low-rate initial production of six air vehicles 
based on the successful demonstrations and operational deployments of 
demonstrator aircraft. The Air Force planned to slowly develop more 
advanced capabilities and acquire 63 air vehicles. This model, now 
called the RQ-4A, is shown in figure 1.

Figure 1: Global Hawk RQ-4A: 

[See PDF for image]

[End of figure]

In March 2002, DOD restructured the acquisition strategy to include a 
second Global Hawk model, the RQ-4B. The new strategy includes 51 air 
vehicles, 10 ground stations, multiple intelligence sensors, support 
equipment, and facilities at a cost of $6.3 billion. Of the 51 air 
vehicles to be purchased, 7 are RQ-4As and 44 are RQ-4Bs. Separately, 
the Navy is procuring 2 RQ-4As and a ground station for about $300 
million (including development costs) to evaluate the vehicles' 
potential for the Broad Area Maritime Surveillance Program. In December 
2002, DOD restructured the program again. Instead of buying all RQ-4Bs 
with multiple intelligence capability, the RQ-4Bs will now have a mix 
of multimission and single-mission capabilities. The two restructurings 
also increased low-rate initial production quantities to 19 (recently 
increased to 20) air vehicles: 7 RQ-4As and 12 (now 13) RQ-4Bs.

Differences between the Two Global Hawk Models: 

The RQ-4A and the RQ-4B differ significantly. The new RQ-4B model is 
intended to have 50 percent greater payload capacity, a longer fuselage 
and longer wing span and will be heavier than the A model. DOD 
considered these changes necessary to carry new advanced sensor 
payloads and to provide multi-intelligence capabilities on a single RQ-
4B. Even though the RQ-4B is bigger and heavier, it will use the same 
engine as the RQ-4A. Table 1 shows the key differences in the two 
models.

Table 1: Key Characteristics of Global Hawk RQ-4A and RQ-4B Models: 

Key characteristics: Payload capacity; 
RQ-4A: 2,000 pounds; 
RQ-4B: 3,000 pounds.

Key characteristics: Take-off weight; 
RQ-4A: 26,750 pounds; 
RQ-4B: 32,250 pounds.

Key characteristics: Wingspan; 
RQ-4A: 116.2 feet; 
RQ-4B: 130.9 feet.

Key characteristics: Fuselage length; 
RQ-4A: 44.4 feet; 
RQ-4B: 47.6 feet.

Key characteristics: Endurance; 
RQ-4A: 31 hours; 
RQ-4B: 33 hours.

Key characteristics: Time at 60,000 feet; 
RQ-4A: 14 hours; 
RQ-4B: 4 hours.

Key characteristics: Average speed at 60,000 feet; 
RQ-4A: 340 knots; 
RQ-4B: 310 knots.

Key characteristics: Approximate range; 
RQ-4A: 10,000 nautical miles; 
RQ-4B: 10,000 nautical miles. 

Sources: Northrop Grumman (data); GAO (analysis).

[End of table]

In addition to the differences shown in table 1, the RQ-4B includes new 
requirements for advanced sensors payloads,[Footnote 4] enhancements to 
communications and ground stations, a new multiplatform common data 
link, and an open systems architecture. The new design will use more 
advanced technologies (such as lithium batteries and electric brakes), 
will require a larger power-generating capability, and will incorporate 
new landing gears that fold into the wing. Also, the design changes 
require new manufacturing processes and investments in new production 
tooling--the factory equipment and manufacturing items used to build 
large quantities of major weapon systems, such as Global Hawk.

Restructured Global Hawk Program Attempts to Do More in Less Time: 

Global Hawk's restructuring has impacted the acquisition program in a 
number of significant ways: the time span for funding has been 
compressed into roughly half the time and the overall funding amount 
has increased; concurrent development and production is causing the Air 
Force to invest in almost half the total fleet of the new and improved 
Global Hawk vehicle before a production model has proven that it will 
work as intended; and development costs have tripled because of the 
need to develop a new and improved vehicle. In addition, the program 
has deferred some capabilities and incurred delays that could affect 
the Air Force's ability to deliver Global Hawk to the warfighter.

Annual Funding Needs Are Higher under Restructured Program: 

The restructured program requires greater up-front investment, a faster 
ramp-up in funding, and a larger total budget. The development period 
was extended from 7 years to 12 years, and development funding 
increased significantly to develop the RQ-4B and to integrate advanced 
sensor and communication technologies. Procurement is now concentrated 
into 11 years instead of the 20 years of relatively level procurement 
set out in the original plan. The restructuring triples Global Hawk's 
budgetary requirements in some years. Figure 2 illustrates the 
restructuring's compression of the program and impact on annual funding 
requirements.

Figure 2: Global Hawk's Annual Funding Requirements: 

[See PDF for image]

[End of figure]

Compared with the original plan, the restructured plan has much higher 
annual funding requirements, placing more budgeted funds at risk of not 
being fully funded when competing for the defense dollar. In their 
respective peak years of budget requirements, the original plan would 
have required $353 million (fiscal year 2010), while the restructured 
plan expects to request $781 million (fiscal year 2007). The upcoming 
fiscal year 2006 requirement is currently about $750 million, three 
times higher than the original plan for that same fiscal year. 
Cumulatively, the restructured plan requires $6.3 billion to be 
completed in fiscal year 2012, whereas the original plan would only 
have needed $3.4 billion by that year.

Restructured Program Increased Concurrency between Development 
and Production: 

Significant concurrency now exists between development and production 
that covers the period from fiscal years 2004 to 2010. The Air Force 
now plans to invest in almost half of the total RQ-4B fleet before a 
production model is flight-tested and operational evaluations are 
completed to show that the air vehicle design works as required. Full-
rate production will begin before the airborne signals intelligence and 
multiplatform radar complete development and are flight-tested to prove 
the integrated system will work as intended. The primary reason for 
building the RQ-4B model was to integrate and carry the advanced 
sensors to provide added capability to the warfighter. Additionally, 
schedule delays have already occurred in the restructured plan that 
will continue to add pressure in the program.

Collectively, the actions to restructure the program have materially 
changed the underpinnings in the original business case decision 
developed to justify the start of system development and low-rate 
production. The business case should provide sufficient evidence that 
resources are available to meet warfighter needs. This case would 
include technology and design demonstrations that added confidence that 
the integrated product can be developed within time and money 
constraints. The original plan was to first acquire basic RQ-4A systems 
very similar to the demonstrators and then slowly and incrementally 
develop and acquire systems with more advanced sensor capabilities 
while using the same air vehicle. This strategy incorporated an 
evolutionary approach in that a basic capability was to be produced in 
a first block of aircraft and a second, more advanced block was to be 
acquired once the new technologies were mature. Each block had separate 
decision points and testing plans and significant risk was removed from 
the program because the demonstrators had been built, tested, and 
extensively flown (and later used successfully in actual combat 
operations in Afghanistan and Iraq). While testing showed it needed 
some improvements, the RQ-4A was significantly more mature and proven 
than the RQ-4B model to begin production.

Figure 3 illustrates the significantly greater concurrency of 
development and production activities resulting from the program's 
restructuring compared with the original plan. Historically, programs 
with high degrees of concurrency are at greater risk of cost, schedule, 
and performance problems than programs with less overlap of development 
and production. The original acquisition strategy planned to complete 
most development testing prior to beginning production, thereby taking 
advantage of product knowledge. The restructured program added the new 
RQ-4B model, substantially increased low-rate production quantities, 
and established highly concurrent development and production cycles to 
acquire and test several different RQ-4B configurations over the life 
of the program. The Air Force plans to invest in 20 RQ-4Bs before 
completion of initial operational test and evaluation. The reason for 
designing a larger and heavier Global Hawk was to satisfy warfighter 
needs for the new advanced sensors. However, integration and 
operational testing of the advanced sensors on the fully configured air 
vehicle are not scheduled to be completed and reported on until fiscal 
year 2009 for the advanced signal intelligence sensor and fiscal year 
2011 for the multiplatform radar. By this time, the entire RQ-4B fleet 
will already be produced or on order.

Figure 3: Restructured 2004 Plan Is Highly Concurrent Compared with 
Original Global Hawk Plan: 

[See PDF for image]

Note: In this figure, development includes both technology and system 
development.

[End of figure]

Restructured Program Added Requirements and Increased Costs: 

Global Hawk's development cost estimates have increased almost 
threefold, from $906.2 million in March 2001 to about $2.6 billion in 
March 2004, mostly due to the requirement for the new RQ-4B's inclusion 
in the program. Total program costs have continued to increase, 
including an increase of $466 million since March 2003. The program 
acquisition unit cost increased 44 percent since program start, from 
$85.6 million to $123.2 million. Increasing costs for Global Hawk 
raises affordability issues and questions about employing the vehicle 
in medium-and high-threat environments because of its high replacement 
costs and limited numbers. Total procurement cost estimates decreased 
from program start due to the cut in quantities from 63 to 51 and 
inflation savings resulting from compressing the program and cutting 9 
years of future procurement activities. Table 2 shows how costs have 
changed since March 2001 in millions of then-year dollars.

Table 2: Global Hawk Program's Cost, Quantity, and Unit Costs: 

Total cost[A]: Development; 
March 2001 (original plan): $906.2; 
March 2002 (1st restructuring): $2,311.0; 
March 2003 (2nd restructuring): $2,395.6; 
March 2004 (status this year): $2,587.9.

Total cost[A]: Procurement; 
March 2001 (original plan): $4,459.8; 
March 2002 (1st restructuring): $4,388.9; 
March 2003 (2nd restructuring): $3,278.5; 
March 2004 (status this year): $3,552.2.

Total cost[A]: Military construction; 
March 2001 (original plan): $28.0; 
March 2002 (1st restructuring): $146.7; 
March 2003 (2nd restructuring): $140.8; 
March 2004 (status this year): $140.8.

Total program; 
March 2001 (original plan): $5,394.0; 
March 2002 (1st restructuring): $6,846.6; 
March 2003 (2nd restructuring): $5,814.9; 
March 2004 (status this year): $6,280.9.

Quantity: Air vehicles; 
March 2001 (original plan): 63; 
March 2002 (1st restructuring): 51; 
March 2003 (2nd restructuring): 51; 
March 2004 (status this year): 51.

Quantity: Ground stations; 
March 2001 (original plan): 14; 
March 2002 (1st restructuring): 10; 
March 2003 (2nd restructuring): 10; 
March 2004 (status this year): 10.

Unit costs[A,B]: Total program; 
March 2001 (original plan): $85.6; 
March 2002 (1st restructuring): $134.2; 
March 2003 (2nd restructuring): $114.0; 
March 2004 (status this year): $123.2.

Unit costs[A,B]: Procurement only; 
March 2001 (original plan): $70.8; 
March 2002 (1st restructuring): $86.0; 
March 2003 (2nd restructuring): $64.2; 
March 2004 (status this year): $69.6. 

Sources: Air Force (data); GAO (analysis).

[A] All costs are expressed in millions of then-year dollars, which 
include inflation and represent the Air Force's budget plans.

[B] Total program unit cost is calculated by dividing the total cost of 
development, procurement, and system-specific military construction 
for the acquisition program by the quantity of air vehicles to be 
produced. Procurement unit cost is the total amount for procurement 
divided by the number of air vehicles to be procured. It does not 
include costs for development and military construction.

[End of table]

The following factors caused the Global Hawk program's cost estimates 
to change between 2001 and 2004: 

* March 2001 cost estimate: Based on the original acquisition strategy 
to slowly and incrementally develop and acquire improved versions of 
the demonstrator model. The RQ-4B model was not yet part of the 
acquisition strategy.

* March 2002 cost estimate: Reflects changes for the first 
restructuring of the program, which introduced the RQ-4B. Development 
costs increased significantly because of plans to quickly build 
advanced capabilities into the RQ-4B. While the quantity of air 
vehicles--the RQ-4A and RQ-4B models--and ground stations decreased 
because of revised user requirements, total procurement costs increased 
because of the higher cost for the RQ-4Bs and the plan at that time to 
equip all the larger platforms with multi-intelligence mission 
capabilities.

* March 2003 cost estimate: Reflects a second restructuring for 
affordability reasons. In December 2002, DOD officials decided to 
switch from all multimission capabilities to a mix of multimission 
and single-mission RQ-4Bs. This switch lowered procurement costs by 
decreasing the required number of sensors.

* March 2004 cost estimate: Between March 2003 and March 2004, 
total program cost increased by $466 million, and officials added 
another 18 months to the development program to accomplish requirements 
deferred from prior years and to accommodate new requirements. 
Development costs increased to cover the extended schedule and 
additional requirements. Procurement costs increased primarily because 
of higher costs for structural components and for labor to build the 
RQ-4B.

Restructured Program Has Created Other New Challenges: 

Space, weight, and power constraints of the RQ-4B limit what 
capabilities can be included now or added in the future. Some 
capabilities have already been eliminated or deferred to later years. 
For example, the warfighter wanted a defensive subsystem for Global 
Hawk, but development has been delayed and may be dropped because of 
weight limitations in the air vehicle, already at or near capacity with 
some of the new advanced sensor payloads. Also, the RQ-4B configured 
with the airborne signals intelligence payload is projected to have no 
capacity for future growth because this payload weighs more than 
allocated in the design of the air vehicle. Other development tasks 
have similarly been delayed or pushed out beyond the budget years, 
including efforts related to demonstrating that Global Hawk can operate 
in areas with extreme temperatures.

The Air Force's overall acquisition approach to add new technologies 
whenever they are deemed ready was designed to allow flexibility in 
responding to changes in priorities and new requirements. However, 
Global Hawk's vehicle limitations and changing requirements have 
increased development challenges. For example, despite the space, 
weight, and power limitations of the RQ-4B, Air Force officials stated 
that Global Hawk users and other DOD officials continue to identify 
potential future technologies and capabilities for possible 
incorporation into Global Hawk. Absent major downsizing of the advanced 
sensors or other payloads, the Air Force will need to consider 
dedicating the RQ-4B to an increasing number of single and specific--
rather than multi-intelligence--missions, if the goal is to utilize new 
and unproven emerging technologies not currently part of the Global 
Hawk plan.

Delays in Key Events Since Restructuring Can Impact Delivery of New 
Capability: 

The new schedule for some key events and activities has slipped because 
of programmatic, budget, or external issues. Air Force and contractor 
officials say that a significant contributor to schedule delays was the 
episodic deployment of Global Hawk's earlier model in Afghanistan and 
Iraq. The Global Hawk system--including considerable numbers of Air 
Force and contractor personnel, ground stations, and supporting 
equipment--has been used to support combat operations and is subject to 
future deployment orders.

Some examples of program events that have been delayed and others whose 
future schedules have slipped include: 

* government acceptance of the second RQ-4A production aircraft due to 
quality and performance problems identified during tests;

* delivery of the equipment and support needed to begin initial 
operations at the Global Hawk's home base, Beale Air Force Base in 
California;

* the operational assessment of the RQ-4A;

* completion of the first phase of combined developmental and 
operational testing of Global Hawk;

* acquisition of production tooling, establishing manufacturing 
processes, and delivering parts needed for production;

* delivery schedules projected for RQ-4B air vehicles; and: 

* the expected start of initial operational test and evaluation to 
support the full-rate production decision.

Delays and deficiencies in scheduled development testing could 
compromise upcoming decisions in the program. According to test 
officials in the Office of the Secretary of Defense, the first of five 
phases of Global Hawk's combined development and operational testing is 
not as robust as originally planned and is taking significantly longer 
than expected. As of July 2004, only about 10 percent of the required 
flight test points had been completed and nearly 70 percent of the 
remaining test points were either on hold or not fully defined. The 
approved test plan required this testing to be completed by September 
2004, but testing officials do not expect it to be completed until 
March 2005. Test delays are occurring due to late delivery of key 
subsystems, lack of resources, deployments in support of the global war 
on terrorism, other program priorities, and unexpected testing 
problems. Test officials told us that the lack of quality test data is 
hampering their ability to provide meaningful oversight.

The results from this first phase of development testing were to be 
used in the operational assessment of the first two production RQ-4A 
aircraft starting in September 2004 to assess the Global Hawk's mission 
readiness and suitability. Because of phase one delays, the start of 
the assessment has slipped until at least March 2005. Test officials 
believe further delays are likely because of other higher priorities, 
including the start-up activities at Beale Air Force Base. At this 
time, a firm date for the testing has not been scheduled and the 
unapproved test plan still lacks the necessary details to ensure 
effective testing. Test officials believe the operational assessment is 
in jeopardy of being cancelled or cut back in order to start the 
dedicated initial operational test and evaluation on time. The 
officials say that eliminating the operational assessment, or reducing 
its scope, would add risk to the program. Entering the next phase 
involves testing the new, larger RQ-4B aircraft and advanced sensor 
payloads, and, without having the assurances the production aircraft 
are mission-ready, additional tests will likely be required.

Global Hawk Program's Current Management Approach Sets Stage for 
Additional Risks: 

In attempting to get advanced capabilities to the warfighter sooner, 
the Air Force's restructured acquisition strategy for the Global Hawk 
program does not fully follow best practices and DOD acquisition 
guidance for an evolutionary, knowledge-based acquisition process. DOD 
recently rewrote its acquisition policy specifically to encourage 
acquisitions to develop and deliver increased capability to the 
warfighter incrementally (or on an evolutionary basis), only when 
appropriate knowledge concerning technology, design, and manufacturing 
has been attained. Compared with the original strategy, the new Global 
Hawk acquisition strategy has yielded less product knowledge in each of 
these areas, thereby raising the likelihood of future negative impacts 
on cost, schedule, and performance. Air Force and contractor officials 
acknowledge that--with its highly compressed and concurrent schedule--
the program is risky and presents major management challenges. The Air 
Force has established management controls and processes intended to 
mitigate risks; however, without a disciplined process to capture and 
base investment decisions on key technology, design, and manufacturing 
knowledge, the controls are less robust and the risks remain high.

Restructured Acquisition Strategy Does Not Fully Capture Product 
Knowledge at Key Decision Points: 

By approving the start of system development and low-rate production at 
the same time, Global Hawk's restructured acquisition strategy skipped 
the critical decision points that require the capture of key product 
knowledge used to inform decisions to move forward in an acquisition 
program. Skipping the necessary steps to capture technology, design, 
and manufacturing knowledge has added risk to the program. The Air 
Force would have captured more knowledge under the original March 2001 
strategy, which more closely followed the knowledge-based approach. 
At that time, the plan was to acquire basic air vehicles and ground 
systems very similar to the demonstrators that had already been built, 
extensively flown, and (later) used in combat. The Air Force then 
planned to upgrade sensor and performance capabilities for the next 
production lot as the technologies matured while retaining the same 
airframe. Since the decision to start the program, additional 
information and experience have closed some of the gaps, but a 
substantial lack of knowledge continues to add risk to the RQ-4B 
acquisition.

GAO has a body of work focused on best practices in product development 
and weapon systems acquisition.[Footnote 5] We have found that when 
program managers capture key product knowledge at three critical 
knowledge points during a major acquisition, the probability of meeting 
expected performance within cost and schedule objectives increases. 
Each of the points builds on previously attained knowledge. The 
acquired knowledge is used to identify and reduce any risks before 
moving a weapon system to the next stage of development. This approach 
to developing new products--commercial and defense--has been shown over 
time to continually produce successful outcomes in terms of cost, 
schedule, and performance.

In recent years, DOD revised its acquisition policy to embrace an 
evolutionary and knowledge-based approach, which we believe provides a 
sound framework for the acquisition of major weapon systems. This 
policy covers most of DOD's major acquisition programs. As noted in our 
November 2003 report,[Footnote 6] this revised policy is a step in the 
right direction. The acquisition policy states that program managers 
shall provide knowledge about the key aspects of the system at key 
decision points in the acquisition process[Footnote 7] and an 
evolutionary or incremental development approach should be used to 
establish a more manageable environment for attaining and applying 
knowledge. The customer may not get the ultimate capability right away, 
but the initial product is available sooner and at a lower cost. The 
policy adopts the essence of the following points from the knowledge-
based approach: 

* Knowledge point 1: Should occur when the acquisition program is 
scheduled to start, when the customer's requirements are clearly 
defined, and resources--proven technology, engineering capability, 
time, and money--exist to satisfy them. This match should support the 
business case for starting system development and demonstration. 
Technology should be mature before starting a program, and, therefore, 
the technology development phase of an acquisition should be separate 
from the system development phase.

* Knowledge point 2: Should occur at the design readiness review, 
about halfway through the system development phase, when the product's 
design is determined to be capable of meeting product requirements--the 
design is stable and ready to begin initial manufacturing of 
prototypes.

* Knowledge point 3: Should occur when managers commit to starting 
production, when information is available to determine that a reliable 
product can be produced repeatedly within established cost, schedule, 
and manufacturing quality targets.

Figure 4 shows a generalized depiction of DOD's acquisition policy, 
where DOD's key milestones are anchored along a typical program's 
acquisition path and where the three knowledge points from the 
knowledge-based approach fit along this path. Also shown in figure 4 is 
how the Global Hawk program overlaps technology and system development 
and begins production before the necessary knowledge is achieved.

Figure 4: Global Hawk Program Is Not Fully Aligned with DOD's 
Acquisition Policy and Knowledge-Based Approach: 

[See PDF for image]

[End of figure]

Global Hawk's new strategy approved initial production of the improved 
RQ-4B well in advance of completing technology maturation and approved 
developing and integrating the vehicle's design with the various sensor 
payloads desired by the warfighter. Furthermore, low-rate production 
was approved without ensuring the quality and reliability of 
manufacturing processes. This approach added significant risk in that 
sensor technologies and final design may not meet the space, weight, 
and power limitations of the RQ-4B, which is in low-rate production, 
and may not satisfy the warfighter's requirements. By not closing 
knowledge gaps in the integrated product design (air vehicle, sensor 
payloads, and data links) needed to meet requirements, there is 
increased risk that sensor development schedules may need to be 
extended to achieve form, fit, and function for an integrated Global 
Hawk system. Otherwise, the program office may have to go back to the 
warfighter and further negotiate requirements. Table 3 compares the 
product knowledge available to support key decision points under the 
original plan in March 2001 with the knowledge obtained at the start of 
RQ-4B production in July 2004. A black dot indicates product knowledge 
meets best practice standards from knowledge-based approach.

Table 3: How Global Hawk Product Knowledge Compares with Three Critical 
Points in the Knowledge-Based Approach: 

Global Hawk program status: 
Date: March 2001; 
Status: At combined system development and limited production decision 
for RQ-4A; 
Date: July 2004; 
Status: At start of RQ-4B production for basic RQ-4B air vehicle design 
with limited signals intelligence.

Three critical points of knowledge-based approach and best practice 
standards: 
 
Knowledge point 1: Technologies needed to meet essential product 
requirements have been demonstrated to work in their intended 
environment, and the producer has completed a preliminary design of the 
product.

Technologies matured to high readiness levels; 
Date: March 2001: Yes; 
Date: July 2004; No.

Preliminary design established; 
Date: March 2001: Yes; 
Date: July 2004; Yes.

Knowledge point 2: Design is stable and has been demonstrated through 
prototype testing. Ninety percent of engineering drawings releasable to 
manufacturing organizations.

90 percent of engineering drawings released; 
Date: March 2001: Yes; 
Date: July 2004: [A].

Prototype demonstration that design should meet requirements; 
Date: March 2001: Yes; 
Date: July 2004: [B].

Reliability targets and growth curve established; 
Date: March 2001: No; 
Date: July 2004; No.

Knowledge point 3: Product is ready to be manufactured within cost, 
schedule, and quality targets. All key manufacturing processes have 
come under statistical process control and product reliability has been 
demonstrated.

Fully integrated system representative prototype demonstrated to work 
in operational environment; 
Date: March 2001: Yes; 
Date: July 2004; No.

Critical processes capable and in statistical control; 
Date: March 2001: No; 
Date: July 2004; No.

Reliability demonstrated; 
Date: March 2001: No; 
Date: July 2004; No. 

Sources: Air Force (data); GAO (analysis).

Note: A black dot (*) indicates product knowledge meets best practice 
standards from knowledge-based approach.

[A] 75 percent of drawings released at design readiness review in April 
2004.

[B] System representative prototype will not be built. Since the basic 
design evolved from RQ-4A, the Air Force and contractor are conducting 
modeling efforts and component tests, such as wind tunnel testing of 
the new wing, to validate that the RQ-4B air vehicle design should meet 
requirements.

[End of table]

The table shows that the level of product knowledge approached best 
practice standards when the decision was made in March 2001 to start 
system development and low-rate production of the RQ-4A. The program's 
restructurings in 2002, however, created substantial gaps in 
technology, design, and manufacturing knowledge that have not yet been 
closed by the start of RQ-4B production. Lack of product knowledge 
increases risks of poor cost, schedule, and performance outcomes. 
Appendix III includes a more detailed discussion of knowledge gaps at 
each knowledge point. Following are brief examples of knowledge gaps as 
they relate to each of the three critical knowledge points.

Technology maturity: Using best practices, at the start of system 
development, a program's critical technologies should be in the form, 
fit, and function needed for the intended product and should be 
demonstrated in a realistic environment. The RQ-4B development program 
is struggling to meet these criteria for several of its most critical 
technologies. Nearly 2 years after development began, the technologies 
required for the RQ-4B to perform its operational mission including 
enhanced imaging sensors, signals intelligence, multiplatform radar, 
and open system architecture are immature, basically at a functional 
rather than form or fit configuration. For example, the airborne 
signals intelligence payload and multiplatform radar technology 
insertion program are still in development under separate Air Force 
programs. These subsystems are key to providing the advanced 
intelligence, surveillance, and reconnaissance capabilities for which 
the RQ-4B is being developed. At the time of our review, neither of 
these technologies had been demonstrated in an operational environment 
using a system prototype. Air Force officials expect them to be mature 
by the time they begin buying sensors to incorporate them into the 
Global Hawk production line in fiscal years 2008 and 2009. However, by 
this time most of the air vehicles will have already been bought. Also, 
operational testing to evaluate performance in a realistic operating 
environment is not scheduled until late fiscal year 2008 for the 
signals intelligence sensor and late 2010 for the radar. Nevertheless, 
the Air Force continues to build the RQ-4B platform lacking solid 
assurance that these critical subsystems will work as planned.

Design maturity: The program had completed 75 percent of RQ-4B model 
drawings by the design readiness review in comparison with the 90 
percent completion standard for best practices. While the Air Force 
anticipated the design and experience on the RQ-4A would add assurances 
and speed efforts to mature the new RQ-4B design, the two vehicles 
ultimately had only about 10 percent commonality. While drawings 
completed were approaching best practice standards, the Air Force did 
not build a prototype of the RQ-4B design to demonstrate a stable 
design. Demonstration of the design is a key factor in ensuring a 
stable design. The Air Force had not established a reliability growth 
goal or plan and had not identified critical manufacturing processes, 
both essential to the next phase of production and needed to ensure 
quality and cost targets can be met.

Production maturity: Officials have started to identify the critical 
manufacturing processes for the RQ-4B but do not intend to collect and 
use statistical process control data to ensure the manufacturing could 
deliver quality products. The new RQ-4B requires new manufacturing 
processes because of major differences from the RQ-4A. In addition, 
Officials from the program office, the prime contractor, and the 
Defense Contract Management Agency continue to identify problems and 
concerns about the performance and quality of work by several key 
subcontractors, including those producing the wing, the advanced sensor 
suite, and the vertical tail and aft fuselage parts. This latter 
subcontractor is new to large-scale manufacturing using advanced 
composite materials and has experienced significant start-up and 
quality problems. According to best practices, the subcontractor's 
critical processes must be demonstrated to ensure good quality and 
limit rework. The prime contractor and DOD sent special teams of 
advisors to help develop the firm's manufacturing processes and to 
train employees. Creating another gap in production maturity, a fully 
integrated system representative prototype was not tested before 
starting production and will not have been demonstrated before full-
rate production, scheduled in 2007. By then, 45 percent of the RQ-4B 
planned quantities will be under contract.

Joint Efforts Will Help Manage Risk in the Global Hawk Program: 

Air Force and contractor officials agree that the restructured program 
significantly increased program and technical risks. They acknowledge 
that the use of the approach to insert technology periodically affects 
all aspects of the program, making it more challenging to manage 
functional areas, including logistics support, contracting, program 
integration, and testing. To better manage the risks and challenges 
created by this acquisition approach and environment, the Global Hawk 
management team provided the following as examples of actions they are 
taking: 

* better teaming practices between the government and contractor to 
manage the program at all levels;

* better controls for the release of funds on both development and 
production contracts;

* allocation of higher amounts of management reserve funding during 
contract performance;

* use of a "buy to budget" concept that limits activity in the program 
to a ceiling amount of funds planned for the total program; and: 

* use of a risk management database to focus the attention of 
management on the most critical risks facing the program.

These are all management practices that can be used to manage any 
product development program and will likely identify and help manage 
risks in the Global Hawk program. Nevertheless, using a knowledge-based 
approach that captures critical knowledge at key junctures in a program 
has been shown time and again in both commercial and defense 
acquisition programs to consistently produce successful outcomes--
cost, schedule, quality, and performance.

Conclusions: 

In March 2001, DOD approved the start of development and production for 
Global Hawk on the basis of a business case that matched requirements 
with resources--technologies, engineering capabilities, time, and 
funding. The first increment of Global Hawk was based on mature 
technologies and a design proven to meet the warfighter's need through 
actual combat use of the technology demonstrator. The plan included a 
reasonable funding profile and embraced a knowledge-based acquisition 
strategy that completed development before entering production. The 
plan included future improvements to the baseline capability as 
technologies and funding became available. By December 2002, the Air 
Force had dramatically changed the Global Hawk's acquisition plan and 
the knowledge-based foundation for the earlier decision to proceed into 
development and production. This change created large gaps between 
Global Hawk's requirements and the resources available to meet them. 
The new plan required a new, larger, and heavier air vehicle with only 
10 percent commonality with the previous proven design; increased 
development time; and accelerated production time, creating significant 
concurrency between development and production. To accommodate the 
changes, the plan calls for twice the annual funding amounts in peak 
years over the old plan. Overall, the new plan has increased risks 
significantly. Subsequent reviews by DOD have acknowledged the changes 
in the program have increased uncertainty. The new design has not been 
demonstrated to work using a prototype model; technologies to support 
the advanced sensor payloads that drove the need for a new Global Hawk 
design are still immature; and the Air Force will be requesting about 
$750 million in funding next year for the program. Yet, the Air Force 
has awarded a contract to start the production of the new, larger 
Global Hawk B model with the hope that simulations and analysis will be 
sufficient to allow decision makers to manage risk. The history of DOD 
managed programs suggests otherwise.

Recommendations for Executive Action: 

To decrease risks of poor outcomes and to increase the chances of 
delivering required warfighter capabilities with the funds available, 
we are making recommendations to the Secretary of Defense to take the 
following two actions: 

* 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, and: 

* 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.

Agency Comments and Our Evaluation: 

DOD provided us with written comments on a draft of this report. The 
comments appear in appendix II. DOD stated that it did not concur with 
our two recommendations. Separately, DOD provided one technical comment 
that we incorporated in this report to more accurately characterize the 
issue of affordability and use of Global Hawks in threat conditions.

Regarding our first recommendation on completing a new business case to 
justify and guide concurrent development and production of the RQ-4B 
model, DOD stated its belief that the Global Hawk's acquisition 
strategy balances acquisition risks with the department's demands to 
rapidly field new capabilities to the warfighter, thereby obviating the 
need for a new business case. Furthermore, by following what officials 
call an evolutionary development process, DOD said it is providing 
transformational warfighting capabilities to ongoing military 
operations without disrupting Global Hawk's current development and 
production activities. DOD said it is effectively managing risk with 
the help of regular oversight meetings and by requiring monthly and 
quarterly activity reports.

We continue to believe that a new business case is needed to support 
further investments and to improve oversight by Congress and DOD 
decision makers. The program today is much different than the one 
supported by the original business case. The Air Force started with an 
advanced concept technology demonstration program that proved the 
capability of a smaller and lighter Global Hawk air vehicle. Use of 
this vehicle on numerous occasions in actual combat situations has 
saved lives, according to Air Force and contractor officials. However, 
this is not the vehicle that the Air Force now plans to produce. 
Instead, the Air Force dramatically changed the acquisition strategy 
for the Global Hawk program and is not gaining some key knowledge 
before production. The Air Force plans to concurrently design and 
produce a new Global Hawk air vehicle that is significantly larger and 
heavier than the earlier version used in combat. The larger air vehicle 
is intended to accommodate new, heavier, and larger sensors that will 
not be available until the 2008 to 2009 time frame. In implementing the 
restructured strategy, the Air Force is not fully following a 
knowledge-based approach for developing the RQ-4B Global Hawk as called 
for by best practices and DOD's new defense acquisition guidance. The 
new guidance clearly states that knowledge reduces risks, and we agree.

While the Air Force believes it can manage the risk of a concurrent 
development and production program by holding regular meetings with 
acquisition executives and by issuing management reports, DOD's own 
experience has shown this to be risky and a factor that led DOD to 
change its acquisition policy to a knowledge-based approach. History 
has shown concurrency usually delays the delivery of a needed 
capability and results in higher costs. From March 2003 to March 2004, 
estimated program costs have increased by $466 million, and the sensors 
and the new air vehicle are still being developed. Stepping back from 
this rush to produce the new air vehicle and establishing a new 
business case designed to capture key product knowledge before costly 
investments in production would better inform DOD decision makers and 
Congress about what is feasible with available technology and dollar 
resources to meet warfighter needs and to better assess the extent and/
or severity of program acquisition risks.

Regarding our second recommendation to delay further procurement of the 
RQ-4B (other than units needed for testing) until a new knowledge-based 
and risk-reducing business case is prepared, DOD stated that its 
current acquisition strategy effectively manages risk and fosters the 
rapid delivery of needed capabilities to the warfighter. DOD said we 
overstated risks from RQ-4B development, design changes, and insertion 
of advanced sensor capabilities. DOD further stated that our 
recommendation would result in a production break with serious cost and 
schedule complications and that GAO's sequential knowledge-based 
approach does not consider real-world events, such as the September 11, 
2001, terrorist attack in the United States or issues related to North 
Korea and Iraq.

We believe the risks in the Global Hawk program are real and continue 
to support delaying the near-term procurement of air vehicles not 
needed for testing. We think this is a prudent way for the program to 
gain knowledge before significantly increased resource investments and 
to reduce risks until a new air vehicle integrated with the advanced 
signals intelligence payload and the multiplatform radar can be 
demonstrated through testing to meet warfighter requirements. Our 
report notes that operational testing of the air vehicle's performance 
and suitability will not take place until almost half the fleet is 
already purchased and that integration and testing of the advanced 
sensors will not occur until late in the program after the full-rate 
production decision is made and most systems are bought. DOD's comments 
appear to decouple the air vehicle from the advanced sensors by stating 
that, if a sensor diverges from its current plan, alternate future 
payloads could fill the RQ-4B's greater payload capacity. However, the 
need for designing a new larger air vehicle was predicated on its 
ability to carry these specific sensors to meet the warfighter's 
requirements. Therefore, we believe that knowledge based on a 
demonstration of the integrated capability is key to supporting 
production and delivery of the product within estimated cost and 
schedule. Additionally, the new Global Hawk program strategy requires 
significantly greater amounts of funding earlier, putting that 
investment at risk should changes occur as development and testing is 
completed.

Regarding a potential break in production, our analysis indicates that 
a break is neither impending nor certain if our recommendation were 
adopted. We are not recommending that DOD stop production or reduce the 
total quantity but rather a near-term delay in procuring the portion of 
annual buys for air vehicles not needed for testing. Funds currently on 
contract and approved appropriations for fiscal year 2005 would 
continue production on the Air Force's planned schedule through mid-
fiscal year 2007 at least. Only then would a production break or 
slowdown happen, and only if the Air Force has not yet prepared a 
business case to justify its investments beyond that point based on 
demonstrated product knowledge of the new air vehicle. If the current 
acquisition strategy and financial plan are feasible and appropriate, 
the Air Force would be able to prepare and justify a comprehensive 
business plan for the RQ-4B well in advance of a potential break.

DOD indicated that our knowledge-based acquisition approach was 
untimely and not adaptive to fast-changing world events. When we 
developed the knowledge-based approach, our high priority was to focus 
on better ways to deliver capability to the warfighter more quickly 
through incremental, or evolutionary, development. Our approach is 
based on a careful study of historical DOD acquisition programs and the 
best efforts in the private sector. Our prior work shows that 
proceeding without requisite knowledge ultimately costs programs more 
money and takes longer to complete than those adopting a more rigorous 
and comprehensive strategy basing investment decisions on key product 
knowledge--technology, design, and production maturity levels. DOD 
agreed with our findings and changed its acquisition guidance to 
reflect a knowledge-based approach. We note in this report that the 
original Global Hawks were produced through a successful demonstration 
program that effectively and quickly provided the warfighter with 
transformational intelligence, surveillance, and reconnaissance 
capabilities. Defense Contract Management Agency reports, contract cost 
reports, corporate briefings, design drawing changes, new tooling and 
new production processes, and the evident need for Air Force and prime 
contractor task teams to be extensively deployed to subcontractor 
facilities, all indicate that the RQ-4B program entails higher degrees 
of risk, greater management challenges, and significant changes from 
production of the RQ-4A and earlier demonstrators.

We believe that our recommendation to delay further procurement of the 
RQ-4B until a new knowledge-based and risk-reducing business case is 
prepared prudently balances real-world internal investment risks with 
military demands from real-world external events. The Air Force could 
have continued to deliver the capability of the Global Hawk that was 
the direct outgrowth of the demonstration program while allowing the 
sensor and radar technology time to mature before investing in a new 
larger and more risky Global Hawk program. This would have allowed 
continued delivery of the enhanced RQ-4A capability to the warfighter 
while minimizing the impacts of design changes that come out of normal 
development and testing and that grow more costly as a product enters 
the production environment. The heavy cost of design changes after 
production is underway could impact DOD's ability to respond to other 
warfighter needs in the post-9/11 world.

As arranged with your office, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 30 days 
from its issue date. At that time, we will send copies to interested 
congressional committees, the Secretary of Defense, the Secretary of 
the Air Force, the Secretary of the Navy, and the Director, Office of 
Management and Budget. In addition, the report will be available on the 
GAO Web site at [Hyperlink, http://www.gao.gov].

If you or your staff has any questions concerning this report, please 
contact me at (202) 512-4163 or Michael J. Hazard at (937) 258-7917. 
Other staff making key contributions to this report were Lily J. Chin, 
Bruce D. Fairbairn, Steven M. Hunter, Matthew B. Lea, Charlie Shivers, 
and Adam Vodraska.

Signed by: 

Michael J. Sullivan: 
Director (Acting): 
Acquisition and Sourcing Management: 

[End of section]

Appendixes: 

Appendix I: Scope and Methodology: 

To determine the effects of Global Hawk's restructuring on cost, 
schedule, and performance goals, we compared the original acquisition 
strategy, two major revisions, and the current acquisition strategy as 
implemented. We identified changes in cost, quantity, fleet 
composition, and sensor capability mixes as well as overall 
consequences of restructuring on total funding requirements, annual 
budget requests, and program cycles for developing, testing, and 
producing the Global Hawk. We reviewed management plans, cost reports, 
contract files, progress briefings, and risk data to identify program 
execution efforts and results to date. We identified cost changes, 
schedule delays, and performance issues.

To evaluate whether the current acquisition approach can help forestall 
risks, we applied GAO's methodology for assessing risks in major weapon 
systems. This methodology is derived from the best practices and 
experiences of leading commercial firms and successful defense 
acquisition programs. We reviewed program office and prime contractor 
organizations, processes, and management actions. We extracted and 
evaluated program and technical risks maintained in a risk database 
used by the program office and contractor to identify major risks and 
the steps taken to mitigate risks. We compared the program office's 
plans and results to date against best practice standards in achieving 
product knowledge in terms of technology, design, and production 
maturity information and in applying knowledge to support major program 
decisions. We identified gaps in product knowledge, reasons 
contributing to those gaps, and the elevated risks expected as a 
consequence of inadequate product knowledge. We further analyzed 
original and current acquisition approaches to demonstrate the high 
concurrency of development, production, and testing and the elevated 
risks imposed as a result.

In performing our work, we obtained information and interviewed 
officials from the Global Hawk System Program Office, Wright-Patterson 
Air Force Base, Ohio; 452nd Flight Test Squadron, Air Force Flight Test 
Center, and Detachment 5, Air Force Operational Test and Evaluation 
Center, Edwards Air Force Base, CA; Defense Contract Management Agency, 
San Diego and Palmdale, CA; Northrop Grumman Integrated Systems, Rancho 
Bernardo and Palmdale, CA; and offices of the Director, Operational 
Test and Evaluation, and Unmanned Aerial Vehicle Planning Office, which 
are part of the Office of the Secretary of Defense in Washington, D.C.

We conducted our work from February to September 2004 in accordance 
with generally accepted government auditing standards.

[End of section]

Appendix II: Comments from the Department of Defense: 

[OFFICE OF THE UNDER SECRETARY OF DEFENSE:
ACQUISITION, TECHNOLOGY AND LOGISTICS:

3000 DEFENSE PENTAGON: 
WASHINGTON, DC 20301-3000:

OCT 19 2004:

Mr. Michael J. Sullivan:
Director, Acquisition and Sourcing Management: 
U.S. Government Accountability Office:
441 G Street, N.W.: 
Washington, D.C. 20548:

Dear Mr. Sullivan:

This is the Department of Defense (DoD) response to the GAO draft 
report, "UNMANNED AERIAL VEHICLES: Changes in Global Hawk's Acquisition 
Strategy Are Needed to Reduce Program Risks," dated September 17, 2004 
(GAO Code 120296/GAO-05-6).

The DoD non-concurs with the draft report's recommendations. The 
Department is using the spiral development process to produce Global 
Hawk. This process allows risks to be understood and effectively 
managed. The GAO's more sequential development, test, analyze, and 
procurement process would delay, by several years, capabilities proven 
through our spiral development process, and increase overall program 
cost. The rationale for the DoD's position is attached.

The Department appreciates the opportunity to comment on the draft 
report. Technical comments were provided separately. For further 
questions concerning this report, please contact Dyke Weatherington, 
Deputy, UAV Planning Task Force, 703-695-6188.

Sincerely,

Signed by: 

Glenn F. Lamartin: 
Director:

Defense Systems:

Enclosure: As stated:

GAO Draft Report - Dated September 17, 2004 GAO CODE 120296/GAO-05-6:

"UNMANNED AERIAL VEHICLES: CHANGES IN GLOBAL HAWK'S ACQUISITION 
STARTEGY ARE NEEDED TO REDUCE PROGRAM RISKS"

DEPARTMENT OF DEFENSE COMMENTS TO THE GAO RECOMMENDATIONS:

RECOMMENDATION 1: The GAO recommended that the Secretary of Defense 
direct the Air Force to revisit the decision to begin concurrent 
development and production of the Global Hawk "B" design. The GAO 
recommends that the direction should be for the Air Force to create and 
present a new business case that defines the warfighter's need and can 
be accommodated given current available resources of technology, 
engineering capability, time, and money (p. 18/GAO Draft Report).

DoD RESPONSE: Non-concur. The Global Hawk's evolutionary acquisition 
strategy balances acquisition risk with military need. The Department's 
intent is to rapidly field war-winning capability through the use of 
risk management as opposed to risk avoidance. As such, the business 
case that links the acquisition strategy to the warfighter's need is 
appropriate for this program.

By using the spiral development process, the Global Hawk program will 
achieve Initial Operating Capability approximately five years after 
program initiation, fielding even greater capability than initially 
planned. In addition, this process has enabled the Department to 
provide transformational war-winning capability (using Advanced 
Concept Technology Demonstration (ACTD) aircraft and ground stations) 
to on-going military operations without significant disruptions to on-
going development and production activities. The GAO's more sequential 
development, test, analyze, and procurement process would delay, by 
several years, capabilities already proven through our spiral 
development process, and increase overall program cost.

The Department effectively manages Global Hawk program risk through 
regular oversight meetings with the Milestone Decision Authority (three 
in the last four years, with another planned for 2005), annual Selected 
Acquisition Reports, quarterly Defense Acquisition Executive Summary 
reports, and Monthly Activity Reports to the Service Acquisition 
Executive.

RECOMMENDATION 2: The GAO recommended that the Secretary of Defense 
delay further procurement of the Global Hawk "B", other than units 
needed for testing, until a new business case that reduces risk by 
using a knowledge-based acquisition strategy to justify further 
investment, is completed (p. 18/GAO Draft Report).

DoD RESPONSE: Non-Concur. The Department is effectively mitigating risk 
as it migrates from the single-intelligence RQ-4A configuration to the 
larger, multiple-intelligence RQ-4B configuration. The GAO asserts that 
without following its sequential knowledge-based approach (technology 
maturity, design maturity, production maturity), the Global Hawk 
program proceeds without the necessary knowledge to effectively manage 
risk. Global Hawk's spiral development acquisition strategy in fact 
fosters efficiency, flexibility, creativity, and innovation, and is 
designed to include the necessary controls the Department considers 
essential to manage program risk, achieve effective program results, 
and continue delivering transformational war-winning capability to on-
going military operations.

The report incorrectly characterizes RQ-4B development risk. The RQ-4B 
is a larger configuration of the successful RQ-4A airframe. This is an 
evolutionary design change, and not a new airframe as the GAO asserts. 
The Department's seven ACTD and four production RQ-4A aircraft provide 
significantly improved "knowledge-based decision points" for the RQ-4B 
configurations. Over 4,960 RQ-4A flight hours, extensive RQ-4B wind 
tunnel data, and other testing results reflect a level of airframe 
knowledge more representative of a configuration update than a new 
airframe development. The Department verified the RQ-4A design model 
through flight-testing and then used it for RQ-4B design validation. 
While the redesign work represents a significant amount of effort, the 
aircraft updates are not technically challenging. The RQ-4B uses a 
larger wing (with the same airfoil), larger V-tail, slightly longer 
fuselage, and the same RQ-4A engine - the prime contractor successfully 
performed all of these design tasks for the RQ-4A, and, again, they are 
not technically challenging.

The report incorrectly relates the number of changed engineering 
drawings to the level of redesign complexity. The number of updated 
drawings is as much influenced by configuration management 
administrative requirements as by actual redesign effort. Risks 
associated with the RQ-4B's design and manufacturing preparations have 
been mitigated. The prime contractor's confidence in building the RQ-4B 
was demonstrated when they accepted a firm fixed price production 
contract for the first RQ-4B lot.

The report also inaccurately assumes that the RQ-4B aircraft, and the 
Advanced Signals Intelligence Program (ASIP) and Multi-Platform Radar 
Technology Insertion Program (MP-RTIP) sensors, must all succeed on 
schedule or the program will fail. The Department takes exception to 
this high-risk characterization. Should a sensor program diverge from 
its current plan, the more likely course of action would reflect 
effective oversight and action. The RQ-4B's payload capacity is a 
valuable resource for planned and alternate future payloads. If 
necessary, payload configurations can be adjusted to balance risk, 
resources, and military need.

While not addressed in detail, the report's evaluation of the two 
advanced sensor programs - MP-RTIP and ASIP - appears out of step with 
our understanding of the technical and programmatic risks. The 
Department agrees that related and major acquisition programs pose 
significant acquisition management challenges. We have accepted that 
challenge as the price of fielding technologically superior weapon 
systems. Fielding the RQ-4B with the MP-RTIP and ASIP capabilities on a 
realistic schedule will require continued, coordinated and 
comprehensive management oversight by the Department.

The MP-RTIP program fully addresses the risks associated with a major 
sensor development effort. The report overstates risk related to this 
new radar capability. In particular, the Department's December 2002 
program approval ensures significant ground and flight test activity 
occurs before production decisions are made. The close management and 
technical working arrangement of the Global Hawk and MP-RTIP 
contractors ensures that critical platform and radar interface 
definitions are established at the earliest date possible to produce 
the maximum synergy. Additionally, as a risk reduction move, MP-RTIP 
will first be integrated and flown in a Global Hawk configuration on 
the Proteus in FY07, a high altitude manned aircraft. This activity is 
specifically designed to reduce risk for integration onto the Global 
Hawk.

The ASIP acquisition is managed by an office dedicated to developing 
and deploying multiple sensor and electronic payloads in a variety of 
aircraft. The ASIP sensor evolved from a previous successful signals 
intelligence payload and is an evolutionary acquisition of that 
technology. The ASIP and Global Hawk programs benefit from being 
organized into the same Capability Wing within AFMC and housed in the 
same building. This close association results in better harmonization 
of program requirements and development than reported. ASIP will first 
be integrated and flown on the high altitude U-2 manned aircraft in the 
summer FY07. This affords the Global Hawk program another significant 
risk reduction step for this system.

The report recommendation results in a production break without 
addressing impacts of that action. In fact, the Department has 
determined a production break would have a significant negative impact 
in cost and capability. The contractor's rough estimate of the 
quantifiable impact is about $400 million (then year dollars). Not 
included in this rough estimate is the likely catastrophic financial 
impact to small business vendors and subcontractors, and costs to 
mothball and restart production facilities. The United States could 
lose its leadership role in strategic unmanned aerial vehicles as 
multiple interested foreign partners would likely look to themselves, 
or elsewhere, for a more reliable source. Finally, delaying or stopping 
production of the RQ-4B creates a gap for the warfighter by delaying 
the fielding of critical IMINT and SIGINT capability to the warfighter. 
The negative impact of this capability loss is also not addressed in 
the report.

Finally, the report's sequential, knowledge-based approach does not 
consider real world, external environmental inputs such as 9/11, North 
Korea, and Iraq. The Department selected the Global Hawk program as a 
transformational weapon system based on a determination that real world 
events required a rapid and significant increase in ISR capability. 
Subsequent military actions validated our forward-thinking decision and 
the need to rapidly field ISR capability.

[End of section]

Appendix III: Knowledge Gaps at Critical Knowledge Points: 

Technology Maturity Gap--Knowledge Point 1: 

Achieving a high level of technology maturity at the start of system 
development is a particularly important best practice. This means that 
the critical technologies needed to meet essential product requirements 
are in the form, fit, and function needed for the intended product and 
have been demonstrated to work in their intended environment. The RQ-4B 
development program is struggling to meet these criteria for several of 
its most critical technologies. More than 2 years after development 
began, the technologies required for the RQ-4B to perform its 
operational mission including enhanced imaging sensors, signals 
intelligence, multiplatform radar, and open system architecture are 
immature, basically at a functional rather than form or fit 
configuration. Nevertheless, the Air Force continues to build the RQ-4B 
platform, lacking solid assurance that these critical subsystems will 
work as planned.

In particular, the airborne signals intelligence payload and 
multiplatform radar technology insertion program are still in 
development under separate Air Force programs and will be purchased by 
the Global Hawk program as government furnished equipment. These 
subsystems are key to providing the advanced intelligence, 
surveillance, and reconnaissance capabilities for which the RQ-4B is 
being developed. At the time of our review, neither of these 
technologies had been demonstrated in an operational environment using 
a system prototype. Air Force officials characterized their current 
stages of development as laboratory settings demonstrating basic 
performance, technical feasibility, and functionality but not form or 
fit (size, weight, materials, etc.). Technology maturity of the sensors 
is critical because the basic design of the RQ-4B has been completed 
and allocates limited space, weight, and power for the new capability. 
If the new sensors cannot be developed within these constraints, some 
performance trade-offs--such as reduced frequency coverage--are 
likely. The airborne signals intelligence payload currently exceeds the 
weight allocated for its integration into the RQ-4B, while the 
multiplatform radar uses most of the vehicle's available power-
generation capability.

Officials expect them to be mature by the time they begin buying 
sensors to incorporate them into the Global Hawk production line in 
fiscal years 2008 and 2009. However, by this time most of the air 
vehicles will have already been bought; additional time and money might 
be needed to fix or retrofit any remaining differences. Also, 
operational testing to evaluate performance in a realistic operating 
environment is not scheduled until late fiscal year 2008 for the 
signals intelligence sensor and late 2010 for the radar. Any changes or 
delays in these programs would likely impact Global Hawk cost, 
schedule, and/or performance.

Design Maturity Gap--Knowledge Point 2: 

Seventy-five percent of engineering drawings were released at the 
Global Hawk design readiness review that triggered the start of RQ-4B 
manufacturing and assembly. This figure is 15 percent less than the 
best practices' standard of 90 percent. The Air Force and contractor 
had anticipated being able to use much of the design work and 
production experience on the RQ-4A to prove the design and decrease the 
time and extent of engineering work on the RQ-4B. However, officials 
found out that the two models had much less in common than anticipated. 
About 90 percent of the airframe had to be redesigned--only 10 percent 
was common to both models. Therefore, relying on the experience of the 
RQ-4A increased the risk of poor program outcomes because the RQ-4B is 
substantially heavier; incorporates a new wing, fuselage, and vertical 
tail; has a 50 percent greater payload capacity to carry advanced 
sensors still in development; and requires new production tooling, new 
materials, and changed manufacturing processes.

The Air Force also did not build an RQ-4B prototype--a best practice to 
demonstrate design stability--before awarding a contract to start 
production. An analysis of the development contract performance, as of 
May 2004, shows that development and integration efforts needed to 
finalize the design and prepare the RQ-4B for production is behind 
schedule and over cost. The planned work efforts were just over one-
half completed, but two-thirds of the budget allocated for these 
efforts was expended. Defense Contract Management Agency analysts cited 
cost growth in labor and materials and problems in finalizing and 
releasing design drawings as causes for the problems.

Neither the original nor the current plan established comprehensive 
reliability targets and growth curves. Reliability growth is the result 
of an iterative design, build, test, analyze, and fix process. 
Improvements in reliability of a product's design can be measured by 
tracking reliability metrics and comparing the product's actual 
reliability with the growth plan and, ultimately, to the overall goal. 
Although both models are in production, the Air Force did not establish 
reliability growth programs to measure how reliability is improving and 
to uncover design problems so fixes could be incorporated before the 
design was frozen and before committing to production.

Production Maturity Gap--Knowledge Point 3: 

Officials have started to identify the critical manufacturing processes 
for the RQ-4B but do not intend to collect and use statistical process 
control data to ensure that the manufacturing could deliver quality 
products within best practices quality standards and that the end 
product meets the design and specifications. The officials' assessments 
of the program continue to identify significant concerns about the 
quality, performance, and timeliness of the work of several 
subcontractors. For example, the subcontractor building the vertical 
tail and main parts of the fuselage is new to large-scale manufacture 
using advanced composite materials. The firm experienced significant 
start-up problems and the prime contractor and DOD sent special teams 
of advisors to help develop the firm's manufacturing processes and to 
train employees. The subcontractor's critical processes must be 
demonstrated to ensure good quality and limit rework. Officials have 
identified similar concerns with the subcontractors building the wing 
and imaging sensor.

The Air Force started producing the A and B models without first 
demonstrating that the systems would meet reliability goals. 
Reliability is a function of the specific elements of a product's 
design and making changes after production begins is costly and 
inefficient. Best practices for system development require reliability 
to be demonstrated by the start of production. The RQ-4A is a 
production version of the demonstrators with few changes. Testing of 
the demonstrators identified a need to evaluate reliability under a 
stressful operating tempo. Air Force officials told us that reliability 
improvements on the RQ-4A were constrained, as were demonstrations of 
reliability. The RQ-4B design has incorporated improvements in such 
areas as flight control actuators, mission computers, avionics, and 
structures that officials expect will fix some of the identified 
problems and improve reliability, but these have not been demonstrated.

Finally, the Air Force did not acquire and test a fully integrated 
system representative prototype before committing to production. The 
contract for the first three units was awarded and work began in late 
fiscal year 2004. Budget plans call for procuring 13 RQ-4Bs in low-rate 
production through the fiscal year 2006. The Air Force has also 
programmed advance procurement funds in fiscal year 2006 for 7 more, 
meaning that the government will have made investments in 20 RQ-4Bs--45 
percent of the entire RQ-4B fleet--before the basic air vehicle is 
flight tested and before evaluations are made leading to the full-rate 
production decision, scheduled in fiscal year 2007. The Air Force also 
plans to enter full-rate production without complete testing to 
demonstrate that a fully integrated system--with advanced sensors and 
data links--will work as intended, is reliable, and can be produced 
within cost, schedule, and quality targets. Initial operational test 
and evaluation will only test the RQ-4B air vehicle with its basic 
imagery intelligence payloads. Complete operational testing and 
incorporation of the advanced signals intelligence payload and the 
multiplatform radar capabilities--the reasons for acquiring the larger 
model in the first place--will not occur until later in the program, 
after the full-rate decision is made.

In the absence of specific product knowledge required by best practices 
and DOD acquisition guidance, the Air Force and its contractor are 
depending on the operational experience of the demonstrators, lab 
modeling and simulation efforts, and production of the RQ-4A to help 
"close the gaps" and provide some assurance on the RQ-4B design 
maturity, its reliability, and its producibility within cost, schedule, 
and quality targets. Although the demonstrator program had notable 
successes, testing identified significant improvements were needed 
before producing operationally effective and suitable air vehicles. 
Areas needing improvement included reliability under a stressful 
operating tempo, performance of sensors, mission planning, and 
communications bandwidth burden. We also note that the RQ-4A is a 
production version of the demonstrators with few changes and that 
government acceptance of the second production RQ-4A was delayed due to 
deficiencies, including flight problems. Moreover, as previously 
discussed, the RQ-4B is significantly different than the RQ-4A and 
requires investing in new tooling and changed manufacturing processes. 
These factors contribute to increased risks of poor cost, schedule, and 
performance outcomes due to incomplete product knowledge.

[End of section]

Related GAO Products: 

Defense Acquisitions: Assessments of Major Weapon Programs. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-248] 
Washington, D.C.: March 31, 2004.

Force Structure: Improved Strategic Planning Can Enhance DOD's Unmanned 
Aerial Vehicles Efforts. 
[Hyperlink, http://www.gao.gov/cgi-bin/ getrpt?GAO-04-342] 
Washington, D.C.: March 17, 2004.

Defense Acquisitions: DOD's Revised Policy Emphasizes Best Practices, 
but More Controls Are Needed. 
[Hyperlink, http:// www.gao.gov/cgi-bin/getrpt?GAO-04-53] 
Washington, D.C.: November 10, 2003.

Defense Acquisitions: Matching Resources with Requirements Is Key to 
the Unmanned Combat Air Vehicle Program's Success. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-598] 
Washington, D.C.: June 30, 2003.

Best Practices: Setting Requirements Differently Could Reduce Weapon 
Systems' Total Ownership Costs. 
[Hyperlink, http://www.gao.gov/ cgi-bin/getrpt?GAO-03-57] 
Washington, D.C.: February 11, 2003.

Best Practices: Capturing Design and Manufacturing Knowledge Early 
Improves Acquisition Outcomes. 
[Hyperlink, http://www.gao.gov/ cgi-bin/getrpt?GAO-02-701] 
Washington, D.C.: July 15, 2002.

Defense Acquisitions: DOD Faces Challenges in Implementing Best 
Practices. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-02-469T] 
Washington, D.C.: February 27, 2002.

Best Practices: Better Matching of Needs and Resources Will Lead to 
Better Weapons System Outcomes. 
[Hyperlink, http://www.gao.gov/cgi- bin/getrpt?GAO-01-288] 
Washington, D.C.: March 8, 2001: 

Best Practices: A More Constructive Test Approach Is Key to Better 
Weapon System Outcomes. 
[Hyperlink, http://www.gao.gov/cgi-bin/ getrpt?GAO/NSIAD-00-199] 
Washington D.C.: July 31, 2000.

Defense Acquisition: Employing Best Practices Can Shape Better Weapon 
System Decisions. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T- NSIAD-00-137] 
Washington, D.C.: April 26, 2000.

Unmanned Aerial Vehicles: Progress of the Global Hawk Advanced Concept 
Technology Demonstration. 
[Hyperlink, http://www.gao.gov/cgi-bin/ getrpt?GAO/NSIAD-00-78] 
Washington, D.C.: April 25, 2000.

Unmanned Aerial Vehicles: DOD's Demonstration Approach Has Improved 
Project Outcomes. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/ NSIAD-99-33] 
Washington, D.C.: August 16, 1999.

Best Practices: DOD Training Can Do More to Help Weapon System Program 
Implement Best Practices. 
[Hyperlink, http://www.gao.gov/cgi-bin/ getrpt?GAO/NSIAD-99-206] 
Washington, D.C.: August 16,1999.

Best Practices: Better Management of Technology Development Can Improve 
Weapon System Outcomes. 
[Hyperlink, http://www.gao.gov/cgi-bin/ getrpt?GAO/NSIAD-99-162] 
Washington, D.C.: July 30, 1999.

Defense Acquisitions: Best Commercial Practices Can Improve Program 
Outcomes. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-NSIAD- 99-116] 
Washington, D.C.: March 17, 1999.

Defense Acquisition: Improved Program Outcomes Are Possible. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/T-NSIAD-98-123] 
Washington, D.C.: March 18, 1998.

Best Practices: DOD Can Help Suppliers Contribute More to Weapon System 
Programs. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/NSIAD-98- 87] 
Washington, D.C. March 17, 1998.

Best Practices: Successful Application to Weapon Acquisition Requires 
Changes in DOD's Environment. 
[Hyperlink, http://www.gao.gov/cgi-bin/ getrpt?GAO/NSIAD-98-56] 
Washington, D.C.: February 24, 1998.

Major Acquisitions: Significant Changes Underway in DOD's Earned Value 
Management Process. 
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/ NSIAD-97-108] 
Washington, D.C.: May 5, 1997.

Best Practices: Commercial Quality Assurance Practices Offer 
Improvements for DOD. 
[Hyperlink, http://www.gao.gov/cgi-bin/ getrpt?GAO/NSIAD-96-162] 
Washington, D.C.: August 26,1996. 


(120296): 

FOOTNOTES

[1] Intelligence is defined by DOD as the product resulting from the 
collection, processing, integration, analysis, evaluation and 
interpretation of available information concerning foreign countries or 
areas. DOD also defines the term as information and knowledge about an 
adversary obtained through observation, investigation, analysis, or 
understanding. Surveillance is defined by DOD as the systematic 
observation of places, persons, or things through visual and other 
means. DOD defines reconnaissance as a mission undertaken to obtain, by 
visual observation or other detection methods, information about 
activities and resources of an enemy or potential enemy or to secure 
data characteristics of a particular area.

[2] Imagery intelligence is defined by DOD as being derived from the 
exploitation of collection by visual photography, infrared sensors, 
lasers, electro-optics, and radar sensors (such as synthetic aperture 
radar sensors) wherein images of objects are reproduced optically or 
electronically on film, electronic, display devices, or other media. 
DOD defines signals intelligence as involving intelligence derived from 
communications, electronic, and foreign instrumentation signals.

[3] DOD Directive 5000.1 "The Defense Acquisition System" and DOD 
Instruction 5000.2 "The Operation of the Defense Acquisition System," 
both dated May 12, 2003.

[4] In addition to enhancements to existing imagery sensors, the RQ-4B 
will eventually incorporate the Airborne Signals Intelligence Payload 
and the MultiPlatform Radar Technology Insertion Program.

[5] GAO, Defense Acquisitions: Assessments of Major Weapon Programs, 
GAO-04-248 (Washington, D.C.: Mar. 31, 2004). This report includes an 
assessment of the Global Hawk program against the knowledge-based 
approach. Other recent reports discussing best practices include GAO, 
Best Practices: Capturing Design and Manufacturing Knowledge Early 
Improves Acquisition Outcomes, GAO-02-701 (Washington, D.C.: July 15, 
2002) and Defense Acquisitions: DOD Faces Challenges in Implementing 
Best Practices, GAO-02-469T (Washington, D.C.: Feb. 27, 2002).

[6] GAO, Defense Acquisitions: DOD's Revised Policy Emphasizes Best 
Practices, but More Controls Are Needed, GAO-04-53 (Washington, D.C.: 
Nov. 10, 2003).

[7] For example, the policy states that unless some other factor is 
overriding in its impact, the maturity of the technology shall 
determine the path to be followed by the program in entering the system 
development phase of the acquisition cycle.

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