Index


Unmanned Aerial Vehicles: DOD's Demonstration Approach Has Improved
Project Outcomes (Letter Report, 08/30/1999, GAO/NSIAD-99-33).

GAO reviewed the Unmanned Aerial Vehicles (UAV) projects to determine
whether the Department of Defense's (DOD) strategy of conducting
Advanced Concept Technology Demonstrations (ACTD) before developing and
producing UAVs provides an improved knowledge base for making
acquisition decisions.

GAO noted that: (1) the ACTD strategy of focusing on mature technology
and proving military utility before committing to a UAV has expanded
DOD's knowledge base, allowing it to make some well informed acquisition
decisions; (2) for example, when DOD began the Predator ACTD in 1994,
the Predator was considered technologically mature because its design
was based on an existing UAV, the Gnat 750; (3) nevertheless, DOD still
required that the Predator's performance be demonstrated; (4) prototypes
of the Predator were deployed in Bosnia in 1995 and 1996, allowing users
to determine whether the UAV would meet their needs; (5) only after this
performance data was gathered and analyzed in 1997 was DOD willing to
formally commit to the UAV's acquisition; (6) in another case, the ACTD
for the DarkStar UAV, DOD gained knowledge early on that led to its
decision not to acquire that system; (7) likewise, for the same reason,
DOD decided not to acquire the joint-service Outrider UAV on a
sole-source basis; (8) DOD's ACTD approach to UAV acquisition is
consistent with the best practices of leading commercial developers,
which require proof of technological maturity and performance before
they will develop or produce a product; (9) on the other hand, DOD's
formal acquisition process, used during its earlier UAV efforts, allowed
programs to proceed with much less knowledge of technologies, design,
and potential production problems; (10) problems with development and
production, along with the associated cost and schedule increases, were
a predictable consequence of proceeding on such limited knowledge; (11)
for example, when DOD committed to the Aquila UAV in 1979, the system
was not technologically mature; (12) several of Aquila's key planned
subsystems--such as a miniaturized jam-resistant data link and a
day-night sensor with laser designator--did not even exist at the time;
(13) as a result, by 1982, in large part due to numerous problems in
developing subsystem technologies, Aquila development costs had almost
quintupled, and the schedule had slipped 27 months; and (14)
nevertheless, DOD continued the program until 1987, when, after spending
more than $1 billion, it terminated Aquila.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  NSIAD-99-33
     TITLE:  Unmanned Aerial Vehicles: DOD's Demonstration Approach Has
	     Improved Project Outcomes
      DATE:  08/30/1999
   SUBJECT:  Military research and development
	     Military aircraft
	     Cost effectiveness analysis
	     Defense procurement
	     Defense capabilities
	     Defense cost control
	     Operational testing
IDENTIFIER:  Outrider Unmanned Aerial Vehicle
	     Aquila Unmanned Aerial Vehicle
	     DarkStar Unmanned Aerial Vehicle
	     Predator Unmanned Aerial Vehicle
	     Gnat 750 Unmanned Aerial Vehicle
	     Global Hawk Unmanned Aerial Vehicle
	     Pioneer Unmanned Aerial Vehicle
	     Mastiff Unmanned Aerial Vehicle
	     Hunter Unmanned Aerial Vehicle

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A Report to the Secretary of Defense

August 1999 UNMANNED AERIAL VEHICLES

DOD's Demonstration Approach Has Improved Project Outcomes

GAO/NSIAD-99-33

National Security and International Affairs Division

B-276812 Letter August 30, 1999 The Honorable William S. Cohen The
Secretary of Defense

Dear Mr. Secretary: The Department of Defense (DOD) needs Unmanned
Aerial Vehicles (UAV) for surveillance and reconnaissance
missions. Since the end of the Vietnam War, DOD began at least
nine UAV acquisition programs that were later

canceled, spending $4 billion in the process. 1 (See app. I.) In
1994, as part of its acquisition reform efforts, DOD adopted an
Advanced Concept Technology Demonstration (ACTD) strategy for
assessing UAVs. 2 We reviewed current UAV projects to determine
whether DOD's strategy of conducting ACTDs before developing and
producing UAVs provides an improved knowledge base for making
acquisition decisions. DOD has completed ACTD projects for the
Predator and Outrider UAV systems and has an ongoing ACTD for the
Global Hawk UAV. DOD terminated a fourth UAV project, DarkStar,
before its ACTD was completed. Results in Brief The ACTD strategy
of focusing on mature technology and proving military

utility before committing to a UAV has expanded DOD's knowledge
base, allowing it to make some well informed acquisition
decisions. For example, when DOD began the Predator ACTD in 1994,
the Predator was considered technologically mature because its
design was based on an existing UAV, the Gnat 750. Nevertheless,
DOD still required that the

Predator's performance be demonstrated. Prototypes of the Predator
were deployed in Bosnia in 1995 and 1996, allowing users to
determine whether the UAV would meet their needs. Only after this
performance data was gathered and analyzed in 1997 was DOD willing
to formally commit to the UAV's acquisition. 3 In another case,
the ACTD for the DarkStar UAV, DOD

1 The canceled programs were Compass Cope, Compass Dwell, Aquila, Amber, 
Condor, Hunter, Raptor, a classified program, and the Medium Range UAV. 
2 ACTDs are carried out to demonstrate, within 2 to 4 years, that a 
technologically mature system has military utility before DOD formally 
commits to develop and produce it. 
3 Defense Acquisition: Advanced Concept Technology 
Demonstration Program Can Be Improved (GAO/NSIAD-99-4, Oct. 15, 1998).
1 The canceled programs were Compass Cope, Compass Dwell, Aquila,
Amber, Condor, Hunter, Raptor, a classified program, and the
Medium Range UAV. 2 ACTDs are carried out to demonstrate, within 2
to 4 years, that a technologically mature system has military
utility before DOD formally commits to develop and produce it. 3
Defense Acquisition: Advanced Concept Technology Demonstration
Program Can Be Improved (  GAO/NSIAD-99-4 , Oct. 15, 1998).

gained knowledge early on that led to its decision not to acquire
that system. Likewise, for the same reason, DOD decided not to
acquire the joint- service Outrider UAV on a sole- source basis.
DOD's ACTD approach to UAV acquisition is consistent with the best
practices of leading

commercial developers, which require proof of technological
maturity and performance before they will develop or produce a
product. 4 On the other hand, DOD's formal acquisition process,
used during its earlier UAV efforts, allowed programs to proceed
with much less knowledge (and thus higher risk) of technologies,
design, and potential production problems. Problems with
development and production, along with the associated cost and
schedule increases, were a predictable consequence of proceeding
on such limited knowledge. For example, when DOD

committed to the Aquila UAV in 1979, the system was not
technologically mature. Several of Aquila's key planned subsystems
such as a miniaturized jam- resistant data link and a day- night
sensor with laser designator did not even exist at the time. As a
result, by 1982, in large part due to numerous problems in
developing subsystem technologies, Aquila development costs had
almost quintupled, and the schedule had slipped 27 months. 5
Nevertheless, DOD continued the program until 1987, when, after
spending more than $1 billion, it terminated Aquila. 6

Background UAVs are pilotless aircraft used in reconnaissance and
surveillance and in the identification, location, and designation
of targets. A UAV system includes one or more aircraft, a launch
and recovery system, and a ground station for flight control.
During the Vietnam War, target drones were modified to carry
cameras and were used extensively for intelligence

gathering missions, avoiding risk to manned aircraft. 7 After the
war, DOD began several UAV programs to capitalize on these
demonstrated 4 Before proceeding into product development, leading
commercial firms require that technology development be complete.
They also place a premium on demonstrated performance. See Best
Practices: Successful Application to Weapon Acquisitions Requires
Changes in DOD's Environment (GAO/NSIAD-98-56, Feb. 24, 1998).

5 Results of Forthcoming Critical Tests Are Needed to Confirm Army
Remotely Piloted Vehicle's Readiness for Production (GAO/NSIAD-84-
72, Apr. 4, 1984). 6 Aquila Remotely Piloted Vehicle: Its
Potential Battlefield Contribution Still in Doubt (GAO/NSIAD-88-
19, Oct. 26, 1987).

7 The terms drone and unmanned aerial vehicle can be used
interchangeably to refer to remotely controlled aircraft.

capabilities. However, nearly all these UAV programs were
terminated before reaching completion. 8 DOD initiated its ACTD
program in 1994 as an acquisition reform initiative to lower
system costs and reduce acquisition time, and DOD modified its UAV
acquisition strategy to incorporate the ACTD approach. The
approach responded to the recommendations of the 1986 Packard
Commission, which was created to review defense acquisitions and
determine how weapon systems could be made faster and at lower
cost. The Commission recommended, among other things, that
prototypes be built and tested to assess military utility and
provide a basis for realistic cost estimates before

a commitment to acquisition is made. We reported in October 1998
that the ACTD approach can potentially cut a weapon system's
development and acquisition time. 9

ACTD Results Provide ACTD results provide DOD with a better basis
for making UAV acquisition Better Basis for decisions. DOD has
completed ACTD projects for the Predator and Outrider UAVs. On the
basis of the knowledge it gained during these Decisions

demonstrations, DOD committed to acquiring Predator UAVs and chose
not to acquire joint- service Outrider UAVs on a sole- source
basis. Additionally, because of performance and cost concerns, DOD
terminated the ACTD project for the DarkStar UAV before its
demonstration was completed. Predator Demonstrated in

When DOD began the ACTD for the Predator UAV in 1994, its
technologies Bosnia Before Commitment were considered mature
because the aircraft was based on an existing UAV, to Production
the Gnat 750, which had been developed previously for the Central
Intelligence Agency. DOD nevertheless required that the Predator's
performance be demonstrated to ensure it would meet user needs
before

DOD committed itself to acquiring the system. Predator prototypes
were deployed in Bosnia in 1995 and 1996 as part of the ACTD. The
performance

8 The one exception, the Navy and the Marine Corps' Pioneer, was
not acquired through the formal DOD process but was procured
directly from a joint venture of Israeli and U. S. firms. When it
deployed Pioneer on Navy ships, DOD had to spend considerable time
and money resolving a number of significant problems. See Unmanned
Aerial Vehicles: Realistic Testing Needed Before Production of
Short- Range System (GAO/NSIAD-90-234, Sept. 28, 1990).

9 Defense Acquisition: Advanced Concept Technology Demonstration
Program Can Be Improved (GAO/NSIAD-99-4, Oct. 15, 1998).

data gathered there convinced military users that Predator was
worth acquiring.

The Predator effort began with a 30- month ACTD contract awarded
in January 1994 for 3 systems and 10 air vehicles. Predator's
mission is to provide long- range (500 nautical miles), long
endurance (more than 20 hours), near real- time imagery to satisfy
reconnaissance, surveillance, and target acquisition requirements.
These capabilities were demonstrated in Bosnia. The demonstration
also identified some problems such as the UAV's inability to see
through cloud cover and icing of its wings in cold weather.
However, the contractor incorporated solutions, including a

synthetic aperture radar and a wing de- icing system. Predator
systems are now in production, and the Air Force has had Predator
UAVs deployed in two reconnaissance squadrons: one in Hungary
supporting operations in Bosnia and one in Nevada.

Outrider ACTD Allowed In our 1997 report on the joint- service
Outrider ACTD, we concluded that DOD to Avoid Unwise DOD had
underestimated the time and effort needed to successfully
integrate nondevelopmental items into the Outrider prototype. 10
In 1998, Commitment after a 2- year effort, the Outrider ACTD was
completed. The ACTD demonstrated that the Outrider prototype did
not exhibit the necessary military utility for its expressed
objective of meeting the combined tactical

UAV requirements of the Army, the Navy, and the Marine Corps. The
Navy then withdrew from the project in favor of pursuing a
vertical take- off and landing UAV system, although on the basis
of the knowledge gained during

the ACTD, the Army determined that Outrider had sufficient
military utility to continue as a competitor for the Army's
tactical UAV solution. However, DOD determined there was not
enough justification to continue in a sole-

source arrangement with the Outrider system. Rather, DOD directed
the Army to conduct a full and open competition for a tactical UAV
system.

The objectives of the joint Outrider ACTD included determining
whether the UAV could (1) operate for 3 to 4 hours at a range of
200 kilometers, (2) be transported on one C- 130 cargo aircraft,
(3) operate on automotive

gasoline, and (4) be used aboard ships. These objectives were not
met. The demonstration showed that Outrider (1) had a 200-
kilometer range for only 2 hours, (2) needed two C- 130 aircraft
to transport it, and (3) required 10 Unmanned Aerial Vehicles:
Outrider Demonstrations Will Be Inadequate to Justify Further
Production (GAO/NSIAD-97-153, Sept. 23, 1997).

aviation fuel. The demonstration of shipboard operations was not
attempted. Moreover, the demonstration results showed no evidence
that Outrider could achieve two longer- term objectives: replacing
its analog data link with a digital one and installing a heavy
fuel engine.

Better Knowledge Base DOD terminated the DarkStar ACTD in January
1999, well before the Allowed DOD to Terminate

planned completion date, after it was determined that DarkStar was
not DarkStar ACTD Early aerodynamically stable and not meeting
cost and performance objectives. The ACTD required the contractor
to demonstrate that the UAV had military utility and that future
production versions could be built for $10 million each. By
requiring that DarkStar demonstrate its ability to meet military
requirements before a commitment to acquisition was made, DOD

was able to acquire knowledge about cost and performance
relatively quickly compared with the time usually needed under the
formal acquisition process. DarkStar was meant to be a stealthy,
high- altitude reconnaissance UAV to be used in high threat
environments. It was expected to reach an altitude

of 50, 000 feet, have a range of 500 nautical miles, and be able
to operate for 8 hours. The first prototype crashed on its second
flight in 1996. Correcting the design problems that had caused the
crash became expensive and time consuming. In December 1998, we
reported that DOD projections showed that the unit price for
future production versions of DarkStar would be about $13.7
million, well above the $10 million goal. 11

Global Hawk High- Altitude The Global Hawk high- altitude
endurance ACTD is progressing toward an Endurance ACTD Is

October 2000 program decision point. At that time, DOD will have
Progressing

completed a military utility assessment of Global Hawk and hopes
to have a sound knowledge base for deciding whether to convert the
UAV to a formal acquisition program. Global Hawks have flown more
than 135 hours and have reached altitudes in excess of 66,000
feet. By the end of our review, four prototype Global Hawks had
been built. The Air Force was scheduled to formally begin
assessing the Global Hawk's military utility in April 1999

for the ACTD sponsor, the U. S. Atlantic Command, but this
assessment was delayed by a crash. 11 Unmanned Aerial Vehicles:
Progress in Meeting High Altitude Endurance Aircraft Price Goals
(GAO/NSIAD-99-29, Dec. 15, 1998).

DOD pursued several programs for a high- altitude, long- endurance
UAV through the 1960s and 1970s without successfully fielding such
an aircraft. The Global Hawk is considered technologically mature
because many of its components are adapted from other proven
aircraft. It is intended to reach altitudes of 65,000 feet, have a
range of 3,000 nautical miles, and conduct reconnaissance missions
for more than 24 hours. According to DOD's plans for airborne
reconnaissance, high- altitude UAVs such as Global Hawk would
initially augment and eventually could replace manned aircraft in
performing high- altitude intelligence gathering missions.

ACTD Approach Consistent DOD's approach to acquiring UAVs using
the ACTD process is consistent With Commercial Best with the focus
on mature technology and proving performance that we

Practices found in our 1998 review of leading commercial
development efforts. Commercial firms make a distinction between
technology development and product development, and they demand
proof of performance before

committing to production. The purpose of technology development is
to foster technological advances for potential application to a
product. Product development in commercial ventures is a clearly
defined undertaking aimed to design and manufacture an item that
the customer needs and wants. The process of discovery the
accumulation of knowledge and the elimination of unknowns is
completed for the best commercial programs well ahead of
commitment to development of a product. Immature or undeveloped
technology is kept out of commercial product development programs.

Prior UAV Acquisitions In contrast to the ACTD approach, DOD's
formal acquisition process allows Accepted Significant technology
development to continue after product development has begun. As a
result, the distinction between technology development and
Unknowns development of an individual product is much less clear.
Consequently, DOD may have much less knowledge about technologies,
design, and potential production problems when it commits to
development or acquisition of a product. Problems with development
and production, along with the associated cost and schedule
increases, are a predictable

consequence of such limited knowledge. Under previous programs,
accurate data of a UAV's performance, military utility, and cost
was not generally available when DOD made a commitment

to acquisition. 12 As a result, DOD spent far more than it
anticipated and obtained far less than it expected in terms of
capabilities. Examples include DOD's acquisition efforts for the
Aquila, Pioneer, and Hunter UAV systems. Aquila Several planned
key subsystems of the Aquila UAV did not exist when DOD

committed to developing the Aquila in 1979. These included a
modular integrated communication and navigation system, an anti-
jam data link, and a forward- looking infrared payload and laser
designator. After about 4 years, Aquila development costs had
grown from $123 million to $590 million, and numerous problems
with subsystem development had stretched the development schedule
from 43 months to 70 months. 13 Nevertheless, DOD continued until
1987, when operational testing revealed that the Aquila did not
meet requirements. Ultimately, after spending 8 years and $1
billion in development funds, the Army terminated the program.

Pioneer DOD also committed to acquire the Pioneer UAV in the face
of significant unknowns. Subsequently but only after the Navy and
the Marine Corps had begun taking delivery of Pioneer systems
numerous problems emerged, requiring extensive investment of
resources to solve.

Before deciding to acquire Pioneer UAVs, the Navy acquired several
Mastiff UAVs from Israel for Naval Gunfire Support while
expediting a procurement program for Pioneer. The Navy, however,
wanted Pioneer to be adapted so it could take off from and land on
ships. No performance data on how the Pioneer design would
accommodate shipboard requirements was collected before an
acquisition decision was made. Thus, Pioneer immediately began to
encounter problems. Recoveries aboard ship and electromagnetic
interference from other shipboard systems led to a significant
number of crashes. The Pioneer also suffered from numerous other
shortcomings. Ultimately, the Navy was forced to spend $50 million
in research and development to bring nine Pioneer

prototypes up to a level of minimal essential capability. Although
12 Unmanned Aerial Vehicles: DOD's Acquisition Efforts (GAO/T-
NSIAD-97-138, Apr. 9, 1997). 13 Results of Forthcoming Critical
Tests Are Needed to Confirm Army Remotely Piloted Vehicle's
Readiness for Production (GAO/NSIAD-84-72, Apr. 4, 1984).

Pioneer's performance never met its original requirements, the
Navy and the Marine Corps were able to use the improved Pioneer
systems in the Persian Gulf War and more recently in Somalia,
Bosnia, and Yugoslavia.

Hunter The Hunter UAV program entered production in January 1993,
before its performance had been tested under realistic conditions.
14 Seven Hunter systems, at a cost of $171 million, were already
being built when testing disclosed serious problems with engines,
software, equipment, and logistic support. 15 After spending an
additional 3 years and a total of about $700 million on the
program, DOD chose not to contract for further production of
Hunter. The seven existing Hunter systems are now deployed in
contingencies such as Yugoslavia, are being used for testing

and training, or are in storage. Conclusions By taking an ACTD
approach that focuses on mature technology and

proves performance and military utility before acquisition, DOD is
basing its UAV acquisition decisions on an improved body of
knowledge. The approach is also consistent with best commercial
practices, which place a premium on demonstrated performance when
deciding whether to develop a new product. As we have previously
reported, DOD's standard acquisition process did not provide the
same level of data and knowledge

under previous UAV programs. Agency Comments DOD partially
concurred with a draft of this report. DOD stated that

although the draft report was favorable to the UAV ACTD process,
it did not outline critical factors that led to DOD's decision not
to pursue Outrider UAV acquisition. We have made changes in the
body of this report to reflect DOD's concerns. DOD's comments are
reprinted in appendix II. Additional technical comments from DOD
have been incorporated as appropriate. 14 Unmanned Aerial
Vehicles: Performance of Short Range System Still in Question
(GAO/NSIAD-94-65, Dec. 15, 1993). 15 Unmanned Aerial Vehicles: No
More Hunter Systems Should Be Bought Until Problems Are Fixed
(GAO/NSIAD-95-52, Mar. 1, 1995).

Scope and To determine whether the ACTD approach provides an
improved Methodology

knowledge base for making UAV acquisition decisions, we reviewed
and analyzed the history of DOD's previous UAV acquisition efforts
and the results of two completed UAV prototype demonstrations, for
Predator and Outrider. We also reviewed the DarkStar High Altitude
Endurance UAV's history and the status of the ongoing Global Hawk
High Altitude Endurance UAV ACTD project. We observed flight tests
and reviewed test reports. We interviewed DOD, Air Force, Army,
Marine Corps, and Navy requirements, acquisition, and testing
officials; service user representatives; and contractor officials.
In addition, we leveraged from our past and ongoing work in the
area of best practices. We performed our work at the offices of
the Secretary of Defense, the Air Force, the Army, the Marine
Corps, and the Navy in Washington, D. C.; the UAV Joint Projects
Office, Patuxent River, Maryland; the Air Force Air Combat
Command, Langley Air Force Base, Virginia; the U. S. Atlantic
Command, Norfolk, Virginia; the Army Training and Doctrine
Command, Fort Monroe, Virginia; the Air Force Aeronautical Systems
Center, Wright- Patterson Air Force Base, Ohio; the U. S. Army, 15
th Military

Intelligence Battalion, Fort Hood, Texas; the 304 th Military
Intelligence Battalion, Fort Huachuca, Arizona; the U. S. Air
Force, 11 th Reconnaissance Squadron, Indian Springs, Nevada; the
U. S. Marine Corps, Pioneer Company at 29 Palms, California; and
at various contractor facilities.

We performed our review from April 1997 to May 1999 in accordance
with generally accepted government auditing standards.

We are sending copies of this report to Senator John Warner,
Chairman, and Senator Carl Levin, Ranking Minority Member, Senate
Committee on Armed Services and Representative Floyd Spence,
Chairman, and Representative Ike Skelton, Ranking Minority Member,
House Committee on Armed Services. We are also sending copies to
the Honorable Louis Caldera, Secretary of the Army; the Honorable
Richard Danzig, Secretary of the Navy; the Honorable F. Whitten
Peters, Acting Secretary of the Air Force; and the Honorable Jacob
Lew, Director, Office of Management and Budget. Copies will also
be made available to others upon request

Please contact me on (202) 512- 4841 if you or your staff have any
questions concerning this report. Major contributors to this
report were Michael Aiken, Terrell Bishop, Terry Parker, and
Charles Ward. Sincerely yours,

Louis J. Rodrigues Director, Defense Acquisitions Issues

Unmanned Aerial Vehicles Program Appendi I x Cancellations Through
1996 Program Dollars spent (approximate)

Compass Cope $200 million Compass Dwell 200 million Aquila 1
billion Amber 200 million Condor 400 million Medium Range 210
million Special Program 1 billion Raptor 200 million Hunter 700
million

Total $4.1 billion

Source: Defense Airborne Reconnaissance Office.

Appe ndi I I x Comments From the Department of Defense Note: GAO
comment supplementing those in the report text appear at the end
of this appendix.

See comment 1. See comment 1.

The following is GAO's comment on the Department of Defense's
(DOD) letter.

GAO Comment 1. We have made changes in the body of this report to
reflect DOD's concerns.

GAO United States General Accounting Office

GAO/NSIAD-99-33

Page 1 GAO/NSIAD-99-33 Unmanned Aerial Vehicles United States
General Accounting Office

Washington, D. C. 20548

Let t er

B-276812 Page 2 GAO/NSIAD-99-33 Unmanned Aerial Vehicles

Let t er

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B-276812 Page 7 GAO/NSIAD-99-33 Unmanned Aerial Vehicles

B-276812 Page 8 GAO/NSIAD-99-33 Unmanned Aerial Vehicles

B-276812 Page 9 GAO/NSIAD-99-33 Unmanned Aerial Vehicles

B-276812 Page 10 GAO/NSIAD-99-33 Unmanned Aerial Vehicles

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Appendix I

Page 13 GAO/NSIAD-99-33 Unmanned Aerial Vehicles

Appendix II

Appendix II Comments From the Department of Defense

Page 14 GAO/NSIAD-99-33 Unmanned Aerial Vehicles

Appendix II Comments From the Department of Defense

Page 15 GAO/NSIAD-99-33 Unmanned Aerial Vehicles

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