The Pentagon’s top arms buyer said at the Farnborough Air Show that the RQ-4 Global Hawk reconnaissance drone program is suffering from troubling cost growth, as prime contractor Northrop Grumman [NOC] defended the effort saying that such concerns have been “exaggerated” in the press.
“We do have concerns about cost growth and performance in the Global Hawk program,” Ashton Carter, the undersecretary of defense for acquisition, technology and logistics, told reporters at the Farnborough Air Show outside London. “Our concern is real, and we need to get to the bottom of whatever issues there may be. We…cannot have the cost grow year by year.”
Earlier in the day, Ed Walby, Northrop Grumman’s director of business development for the program, said Pentagon officials’ remarks about the Global Hawk’s increasing costs and slower than expected development timeline were being blown out of proportion.
“I would say that the problems expressed in the press were exaggerated,” Walby said during a press briefing at the air show.
He also defended some of the system’s higher than expected cost on the grounds that the Air Force is flying the drones at a higher operational tempo than initially planned, leading to higher costs for spare parts; that the service continues to add new requirements; and that the company’s full production capacity is not being maximized with the Defense Department’s current four-unit buy per year.
“The Global Hawk suffers from having a lot of masters and a lot of evolving requirements, and trying to capture all of those to satisfy all the customers becomes very difficult,” he said.
Air Force acquisition executive David Van Buren has said that he is “not happy” with the pace of the program, both on the government and the contractor side (Defense Daily, June 21). As a result, a “should-cost” review is underway, as directed by an acquisition decision memorandum from Carter’s office. The service-led study is intended “to look at air vehicle cost, and to look at each and every one of these sensor packages,” according to Van Buren, and will be completed by September.
Carter said last month that Global Hawk is “on a path to being unaffordable” and will be studied in detail to determine what is causing the suspected inefficiencies (Defense Daily, June 28).
Walby said that when test and evaluation of the Block 30 aircraft is completed next year, full-rate production levels would lower the unit price. In addition, the NATO AGS surveillance program could increase production rates further.
He said that Northrop Grumman has the capacity to build 12 aircraft per year.
Still, “Northrop Grumman is looking for ways to reduce costs,” he added.
Asked whether the Air Force will be able to begin retiring U-2 spy planes by 2012 as envisioned in its Global Hawk replacement plan, Walby said the drones would be ready on time.
“In 2012, the Global Hawk program meets all of the contractual requirements and numbers requirements to replace the U-2,” he said.