NDBI: Major Defense Acquisitions Programs by Rachel Elise

Major Defense Acquisition Programs Lessons Learned Case Studies March 28, 2013

Major Defense Acquisition Programs Lessons Learned Case Studies March 28, 2013 Prepared for: The Deputy Assistant Secretary for Acquisition Integration Office of the Assistant Secretary of the Air Force for Acquisition

Office of Research

625 South Gay Street, Suite 550 Knoxville, Tennessee 37902 Phone: 865.946.3170 / FAX 865.946.3180 www.ndbi.utk.edu

March 28, 2013

The Deputy Assistant Secretary of the Air Force for Acquisition Integration commissioned the National Defense Business Institute (NDBI) at the University of Tennessee to develop two case studies drawn from our previous work in evaluating Major Defense Acquisition Program (MDAP) Lessons Learned. For the MDAP Lesson Learned Case Study Analysis, NDBI completed a thorough review the work accomplished earlier to include: literature search, data analysis, conclusions and insights as a the foundation and framework for the two case studies. NDBI selected two representative acquisition programs the Northrop Grumman Global Hawk and the Boeing P-8A Poseidon. In collaboration with the Center for Executive Education (CEE) the team produced the following: 1. Two case studies 2. Instructional materials focusing on each programâ&#x20AC;&#x2122;s procurement process 3. Course curriculum guide, which outlines a teaching plan and course schedule The value of understanding the dynamics of these two programs is being able to assess the decision making at various milestones during the progress of each. So often good programs and not-sogood programs have leadership and management lessons from which the acquisition community can benefit; capitalizing on the good decisions while avoiding bad ones. NDBIâ&#x20AC;&#x2122;s purpose in producing this research and study effort is to provide program managers and their staffs, as well as others in the acquisition community, the experiences others had in wrestling with similar program management challenges. It is our hope that we have achieved this purpose.

J. David Patterson Executive Director National Defense Business Institute

CONTENTS

Executive Summary

Study Report

Appendix 1: P-8A

Case Study

Teaching Module Requirements

Teaching Module Design and Production

Teaching Module Program Management

Teaching Module Budget and Funding

Teaching Notes

Appendix 2: Global Hawk

Case Study

Teaching Module Requirements

107

Teaching Module Design and Production

113

Teaching Module Program Management

119

Teaching Module Budget and Funding

126

Teaching Notes

135

Appendix 3

147

149

Acknowledgments

EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY Present and future program managers as well as senior acquisition leadership can learn valuable lessons from past defense acquisition programs. Studying past lessons can better prepare program managers to administer future programs, provide an experience to reinforce successful program management, and preclude repeating past errors in delivering Major Defense Acquisition Programs (MDAPs). Without a structured background in MDAPs lessons learned, program managers and acquisition leadership may repeat mistakes for which corrective avoidance measures already exist. With MDAPS Lesson Learned Case Study Analysis the National Defense Business Institute (NDBI) provides the acquisition community with an educational tool that teaches this necessary critical decision making skill. Leveraging its past studies, including MDAPs Lessons Learned, NDBI, in conjunction with the Center for Executive Education (CEE) and the University of Tennessee, developed case studies and related teaching modules for two MDAPs (the Air Force Global Hawk and the Navy P-8A Poseidon). The goal for MDAPS Lesson Learned Case Study Analysis is to provide a knowledge base on these two programs, one viewed as successful and one as unsuccessful, to train acquisition managers through business case studies. In each program NDBI focused its efforts on four specific areas where complications commonly occur in MDAPs. The four areas are: requirements, design and production, budget and funding, and program management. By focusing on these four areas, NDBI identified and dissected lessons learned from both programs in an effort to keep acquisition officials from repeating past procurement mistakes. In developing the case studies and teaching modules NDBI identified key characteristics of each program that aided or hindered each programs’ delivery. In focusing on the aforementioned areas, NDBI found many teachable lessons that the acquisition community can learn from and implement in future MDAPs. Examples of overarching lessons learned from each program are as follows: •

Using prior programs as a baseline, and example when moving forward in planning, researching and producing MDAPs increases the probability that a program will be successful.

•

Striking the right balance between budget, schedule and requirements, and developing thoughtful risk mitigation strategies is often the key to a successful acquisition program; one that meets or exceeds technical requirements while delivering a product that is on time and within the allocated budget

•

Imposing a unit price cap as the sole, firm design requirement for a system might be an effective way to ward off requirements creep from external sources seeking to add new capability, but it also has the potential to force short-sighted performance trades that prove to be sub-optimal in the long run

•

A decision to require and produce more in less time should be supported by adequate analysis and planning NATIONAL DEFENSE BUSINESS INSTITUTE

NDBI and the University of Tennessee is providing the Air Force and acquisition mangers with a tool that is not currently utilized, but could yield great results in the form of more successful MDAPs that are completed on schedule and budget. MDAPS Lesson Learned Case Study Analysis provides a turnkey program giving acquisition managers insight into past program errors, and the detrimental decision making that led to those errors. By applying the knowledge gained from past acquisition mistakes in the MDAPS Lesson Learned Case Study Analysis materials, the Air Force will be better prepared in future MDAPs to make the critical decisions that can lead to an MDAPs success or failure.

STUDY REPORT LESSONS LEARNED CASE STUDY ANALYSIS MAJOR DEFENSE ACQUISITION PROGRAMS

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STUDY REPORT OVERVIEW In fiscal year 2012 dollars, the total planned investment in Major Defense Acquisition Programs (MDAPs) was $1.7 trillion. In the past years, the total acquisition cost of these MDAPs grew by over $120 billion or seven percent.1In the current economic climate, where cost savings is of paramount importance, studying past lessons can better prepare program personnel to administer future programs, provide an experience to reinforce successful program management, and preclude repeating past errors in delivering MDAPs. In 2012 SAF/AQX tasked the National Defense Business Institute (NDBI) to develop two case studies and teaching materials, specifically tailored for use within the defense acquisition community, as well as a curriculum outline for a MDAPS Lesson Learned Case Study Analysis course. To fulfill this requirement NDBI selected the Northrop Grumman Global Hawk, and the Boeing P-8A Poseidon, and collaborated with the Center for Executive Education (CEE) to produce the following two case studies: 1.

Instructional materials focusing on each program’s procurement process.

2. Course curriculum Guide, which outlines a teaching plan and course schedule NDBI divided each program’s procurement process into four stand-alone teaching modules as follows: requirements, design and production, program management, and budget and funding. Dividing the procurement process for each of the programs in this manner will enable a more focused study on the entire MDAP process and allow better insight into each program’s successes and failures. Although the deliverables were specifically developed for the MDAPS Lesson Learned Case Study Analysis course, the studies and teaching materials highlight lessons learned that are applicable to the acquisition process, and may be used to focus on particular points of emphasis, encourage informed decisions, and avoid future program pitfalls. PURPOSE

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Without a structured background in MDAPs lessons learned, program managers may repeat mistakes for which corrective avoidance measures may already exist. Case studies and related teaching materials provide an excellent tool to offer real examples of past events to demonstrate the effects of critical decisions made during program execution. The case studies, related teaching materials, and corresponding course curriculum are designed to examine the role that key events and critical decisions play in contributing to both desirable and undesirable program outcomes. Participants should gain a working knowledge of program history through the use of the materials and a strong appreciation for collaborative decision-making processes from the review of each case study. Participants should leave the program with an excellent grasp of critical decisions and resulting outcomes drawn out by the teaching materials on both the Global Hawk and P-8A. Upon completion of the materials, program participants will: •

Better understand decision making in the Department of Defense acquisition environment

•

Gain awareness of the importance of information flow so that decision makers above and below the program manager have the basis to make better decisions

•

Improve ability to identify and manage risks

•

Apply lessons learned from two past MDAPs to improve future MDAP results

1 Office of the Under Secretary of Defense (Comptroller) Fiscal Year 2013 Budget Request, accessed at http://comptroller.defense.gov/ defbudget/fy2013/FY2013_Budget_Request_Overview_Book.pdf (March 24, 2013).

STUDY REPORT LITERATURE REVIEW The NDBI research team reexamined its previously completed, MDAPs Lessons Learned study, and leveraged that information to formulate the baseline from which to begin its analysis of the Global Hawk and P-8A programs.NDBI’s analysis was further informed by a variety of publically available sources, including: industry periodicals, acquisition texts, reports from the Naval Postgraduate School (NPS), the Defense Contract Management Agency (DCMA), the Office of Manufacturing and Industrial Base Policy (MIBP), the Government Accountability Office (GAO), U.S. Naval Air System’s Command (NAVAIR), Defense Acquisition University (DAU), and associated program documents from Boeing and Northrup Grumman, the prime contractors on the P-8A and Global Hawk programs respectfully. The NDBI research team used this information to highlight key decision points associated with the P-8A and Global Hawk programs. METHODOLOGY AND FRAMEWORK After exploring all facets of both the Global Hawk and P-8A programs in detail, NDBI worked to develop the two (2) case studies and teaching modules, examining each program’s lineage, and successes and failures. NDBI drafted these materials to allow a class participant to draw his/her own conclusions at the close of reviewing the teaching modules and case studies and formulate a supposition as to how to proceed within the confines of each respective program. Along with lessons learned, participants will gain a working knowledge of program history, program outcomes and be challenged to make decisions within the program’s parameters to inspire accurate and informed decisions that will translate into proper decision making and critical thinking in future MDAPs. The cases studies and teaching modules are designed to encourage informed, open, and collaborative debate concerning critical decisions to support successful outcomes. For each program, participants will be challenged to consider the implications of decisions affecting requirements, budget and funding, program management, and design and production. Requirements: Identifies the many ways requirements are generated and consider strategies to contribute to the requirements generation processes to improve the execution posture of MDAPs. Design and Production: Provides insight into the complexities of source selections, and the value of evaluation criteria in driving industry’s proposed solutions. Program Management: Examines coping skills and techniques when faced with hard decisions, including both the importance of analytical backing for positions advocated and communications with those in governance and oversight. Budget and Funding: Highlights the importance of Acquisition Program Baselines (APBs) and the role of the program manager and the program team in forming the APB. NATIONAL DEFENSE BUSINESS INSTITUTE

Dividing the programs into the aforementioned sections allows program participants to focus on specific lessons learned found in each program. The programs and associated teaching material can be explored independently or as a complete set to foster comparative program analysis or place emphasis on particular decision(s). Each of these products benefited from the direct feedback and active participation of MDAPS Lesson Learned Case Study Analysis instructors throughout the project. It is NDBI’s recommendation that the teaching modules are used to develop and foster discussion of lessons learned identified in each of the programs, and that the case studies be used in corroboration to provide more detail and context in each program.

STUDY REPORT To further emphasize the above areas within each program’s history, NDBI wrote the case studies and teaching modules to a set of inflection points. NDBI drafted the case studies, teaching modules, and inflection points with the intent of allowing a class participant to draw his/her own conclusions and formulate a supposition as to how to proceed within the confines of each respective program. FINDINGS The NDBI study team concluded from its examination of the P-8A and the Global Hawk that striking the right balance between risk acceptance and risk avoidance is critical to a successful program. NDBI found that the following decisions within the P-8A and Global Hawk programs provide exceptional examples of decision making that can be analyzed in order to better inform those individuals making similar decisions in future MDAPs. NDBI identified the following lessons learned from the P-8A Poseidon that it believes acquisition managers can learn from and implement in future MDAPs: •

Using prior programs as a baseline, and example when moving forward in planning, researching and producing MDAPs increases the probability that a program will be successful. Lessons learned from the failed P-7A (the prior effort to replace the P-3 maritime patrol aircraft) and pressure to replace the aged P-3 fleet dominated the formation and control of the P-8A requirements. The failed P-7A program, 8 years prior to the next effort to replace the P-3, gave the MultiMission Aircraft (MMA) program an excellent baseline to rely on when determining requirements. While there was innovation, the requirements on the P-8A were set at “as good as” the capabilities on the P-3. This was permitted in an effort to ensure adequate capabilities, and an on time and budget delivery.

•

Allowing a program to proceed with technologies already utilized, yet still relevant will help keep a program on budget and schedule. The P-8A took a non-traditional approach, including funding the program to a much higher independent cost assessment, to manage perceived software risk after down-select to a single company for development and production. Furthermore, the P-8A program was allowed to bypass new and innovative technologies and use technology standard on the previous maritime patrol aircraft if necessary to stay on budget and schedule. From the onset the P-8A program was driven by the Navy’s need to replace the again P-3. The P-8A program completed Critical Design Review (CDR) facing hard choices in establishing the technical baseline for initial production. When its planned technologies lagged maturity, program officials relied on backup systems which reduced overall capability but allowed the program to progress as scheduled. The decision was made to rely on older, but capable technology in order to maintain schedule and meet budget constraints.

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•

Taking a non-traditional approach in MDAPs can yield benefits if the approach is well thought out, researched and based on an existing success. Two contractors’ proposals were chosen for the P-8A procurement for final down-select, and then narrowed to a single company for development and production. Both contractors offered radically different solutions to the operational requirements. The two options consisted of a proven platform utilized by the current MMA at the time, and the other option was a commercial derivative based on the most successful commercial aircraft in production at that time. Both designs and production techniques allowed advantages. However, after ample research the choice was made to pursue the commercial derivative option due to a design and production method, that while different, promised ample advantages such as an international infrastructure and cost savings due to commercial off the shelf (COTS) production methods. While radical in a MDAPs context, the choice of a wholly commercial derivative, and associated production method, has thus far been considered a success.

STUDY REPORT •

Striking the right balance between budget, schedule and performance while developing thoughtful risk mitigation strategies is often the key to a successful weapons program; one that meets or exceeds technical requirements while delivering a product that is on time and within the allocated budget. During the P-8A development phase, software integration was identified as a potential problem area. The Independent Cost Estimate (ICE) revealed that software integration was likely to cost far more than the contractor proposed. In the case of the P-8A the Navy gave the contractor an extra $500 million at the start of the program as a software “risk mitigation” strategy. As a result, the program has largely tracked to its original Acquisition Program Baseline (APB).

NDBI identified the following lessons learned from the Global Hawk that it believes acquisition managers can learn from and implement in future MDAPs: Imposing a unit price cap as the sole, firm design requirement for a system might be an effective way to ward off requirements creep from external sources seeking to add new capability, but it also has the potential to force short-sighted performance trades that prove to be sub-optimal in the long run. The Advanced Concept Technology Demonstration (ACTD) program’s unit flyaway price requirement ultimately worked against the cost control philosophy that was envisioned at program inception by inhibiting investment in basic design solutions that might have been costly in the short term but would have more than paid for themselves later, reducing operating and support costs.

•

A decision to require and produce more in less time should be supported by adequate analysis and planning. Although the original plan for Global Hawk was to acquire RQ-4A models in as the first block that were very similar to the technology demonstrators. Then slowly and incrementally develop a more advanced sensor capabilities that could be used on the same air vehicle in a second block. The Agile Acquisition Initiative - intended to shorten acquisition cycle times - abruptly compressed production and funding so severely that the original plan for slow, incremental development was undermined, ultimately leading to delayed deliveries of fewer, more costly production units.

•

The process of ‘building without a blueprint’ leads to increased costs and delays. The Global Hawk program started as a Defense Advanced Research Projects Agency’s (DARPA) ATCD and transitioned to an Air Force MDAP while the requirements were continuously modified due to the revolutionary capabilities demonstrated in the military utility evaluation. Production contracts for the larger, more capable RQ-4B model were awarded based on the then current design of the less advanced RQ-4A, without any effort to refine and validate the new design; resulting in production delays and cost overruns.

•

Global Hawk’s operational success in Afghanistan drove a need to restructure the program during early production of the baseline configuration, creating even more concurrency between spiral developments and compressed production. Flooding dollars into the development of Global Hawk RQ-4B did not guarantee immature technologies could be developed, tested and integrated at an accelerated rate. The decision to condense the program’s duration necessitated a funding profile that dramatically increased the year to year development budget. While it was billed as a “spiral development” program, the funding profile only allowed for rapid development of technologies and left no room for error. Thus, when the development and testing phases began to slip, planned production could not proceed.

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•

STUDY REPORT PROJECT OUTCOME Although it is widely viewed as a failed program, the Global Hawk, despite enduring two Nunn-McCurdy breaches, achieved tactical success on the battlefields of Afghanistan. Conversely, the P-8A, also viewed as successful, yet the P-8A’s procurement relied upon the failure of the P-7A maritime patrol aircraft. Ten years after the start of development, there are no operational ready P-8A’s currently in the maritime patrol force. The Global Hawk was operational almost immediately. NDBI’s research shows that neither of these programs can be declared a pure acquisition success or failure. After exploring in detail all facets of both the Global Hawk and P 8A programs NDBI concluded that program outcomes are the result of a number of complex contributing factors. Valuable lessons may be learned from both programs and should, therefore, be used to inspire sound decisions and keep acquisition officials from repeating past procurement mistakes. STUDY LAYOUT MDAPS Lesson Learned Case Study Analysis is dived into two appendices, one for each program (P-8A and Global Hawk). Each appendix contains a case study, teaching modules and teaching notes. CDM for MDAPs is designed to allow each case study or teaching module to stand alone, or for all materials to be used in conjunction for a more educationally enriching program. In conjunction with CEE, the teaching modules are broken down to address four main areas ubiquitous to all MDAPs: requirements, design and production, budget and funding, and program management. These teaching modules are intended to be used in tandem to compare and contrast the lessons learned found in each program. This will foster critical thinking, interaction, communication, and team-building within class participants.

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Due to the versatility of the case studies and associated teaching modules and teaching notes, the delivery of the courseware can be modified to meet the unique needs of participants and the teaching environment.

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APPENDIX 1 : P-8A POSEIDON CASE STUDY TEACHING MODULES TEACHING NOTES

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P-8A POSEIDON: CASE STUDY P-8A POSEIDON: A LONG AND CROOKED ROAD Wednesday, August 11, 2010 The Navy’s summer whites are no match for the recent heat wave. The weatherman has been promising rain for days, but the darkening skies have provided no relief. As the black GMC Yukon weaves through traffic the air-conditioning begins to struggle. Rear Admiral Steven Eastburg is seated beside his Program Manager (PM) for the P-8A, Captain Moran, who is assuring him that the issues facing the program and the transition to Low Rate Initial Production (LRIP) are manageable within the program baseline. In less than one hour, the NAVAIR team from Patuxent River will attempt to convince the Defense Acquisition Board (DAB), which oversees all major acquisitions, to approve the P-8A Multi-mission Maritime Aircraft (MMA) to enter the first year of LRIP. If all goes well, the memo of official approval, signed by the Under Secretary for Acquisition Technology and Logistics (USD[AT&L]), will arrive within three to four weeks. Although just one step in a very long process, it is a critical one that brings the P-8A closer to Initial Operational Capability (IOC) for the fleet in 2013. Traffic breaks just as Suitland Parkway becomes South Capitol Street, and the Yukon speeds toward I-395 South. As the car pulls up to the Pentagon’s River entrance, Eastburg reaches over the consul between the driver and passenger’s seats to allow the Paragon Security officer to inspect his credentials. The officer waves the car through and lowers the steel barricade. Reflecting on the often challenging sequence of events that led them here, Eastburg takes a moment to thank the team that he says “has worked extremely hard to reach this major acquisition milestone.” The critical data raises questions as to the P-8A’s preparedness for its transition to LRIP: several of the technical issues identified during the initial design phases persist, and additional, recently detected issues still require resolution prior to IOC. Eastburg is nonetheless confident about a smooth progression. In theory this should result in an on-time and on-budget delivery to the war fighters. He steps out of the vehicle and walks up the marble steps toward the gigantic oak doors that keep watch over Washington’s historic monuments. He is confident, but wary, knowing that anything can happen once he is on the other side. COMPANY HISTORY

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In December 1903 Orville and Wilbur Wright recorded the first ever self-propelled airplane flight. Later that year 22-year-old William Boeing left Yale Engineering College for the Pacific Northwest. Two years later Boeing attended the 1910 Los Angeles International Air Meet at Dominguez Field in Los Angeles County, California. The event, dubbed by the Los Angeles Times as "one of the greatest public events in the history of the West," lasted 11 days and played host to 254,000 spectators.1

The meet drew over a dozen of the world’s most famous aviators, including Glenn Curtiss, an American aviation pioneer and founder of the Curtiss Aeroplane and Motor Company. But it was a self-taught Frenchman, Louis Paulhan, who is credited with giving William Randolph Hearst his first experience of flight, who dominated the competition, winning $19,000 in prize money. While in attendance Boeing tried to secure a seat on one of the aircraft. All of the aviators, with the exception of Paulhan, declined. After waiting for four days Boeing learned that Paulhan had left the meet. Disappointed yet more intrigued than ever by the prospect of personal flight, Boeing returned to Seattle. For the next five years Boeing’s experience with air travel was mostly theoretical, but his frequent conversations at 1 Onkst, David H. (circa 2002). "The First U.S. Airshows--the Air Meets of 1910". www.centennialofflight.gov. United States Centennial of Flight Commission. Archived from the original on May 9, 2008.

P-8A POSEIDON: CASE STUDY Seattle's University Club with his close friend George Conrad Westervelt stoked the fire that burned ever hotter with the news of each new discovery. Westervelt, a Navy engineer, had taken several aeronautics courses while attending the Massachusetts Institute of Technology (MIT). Together, he and Boeing researched biplane construction and rode on an early Curtiss designed hydroplane. The box-style plane required both the pilot and the passenger to sit on the wing. Westervelt later wrote that he "could never find any definite answer as to why it held together."2 The experience convinced Boeing and Westervelt that they could build a biplane better than any on the market. In the autumn of 1915, Boeing returned to California and enrolled in the Glenn Martin School for flight instruction. Before leaving Seattle, he asked Westervelt to start designing a new, more practical airplane. Soon after, construction of a twin-float seaplane began in Boeing's boathouse on the shores of Lake Union. They named the aircraft the Bluebill B&W Model 1.3 On July 15, 1916, Boeing incorporated his airplane manufacturing business as Pacific Aero Products Company. 4 On April 8, 1917, U.S. President Woodrow Wilson declared war on Germany. Just over a month later the company was renamed the Boeing Airplane Company, and the world’s largest aerospace company was born. The Boeing Airplane Company made a name for itself building “flying boats” for the Navy during World War I. However, when WWI ended, the military drastically cut back its request for aircraft and the commercial market was flooded with military aircraft. While other manufacturers closed their doors, Boeing kept the company afloat by building bedroom furniture, cabinets and boats. Boeing also produced a commercial bi-plane, the B-1, which made history March 3, 1919 when Boeing and pilot Eddie Hubbard flew the plane between Seattle and Vancouver, establishing the first international air mail route. 5 In 1923, Boeing began a competition against Glenn Curtiss for a contract to develop a pursuit fighter for the U.S. Army Air Service. Although Curtiss was awarded the contract, Boeing continued to develop the PW-9 fighter. Certain features of the Boeing design, such as the tapered wing and the tunnel radiator, so impressed the Army that it asked Curtiss to test them on his aircraft. Boeing’s financial gamble finally paid off on September 28, 1923, when the U.S. purchased the Boeing Model 15 under the designation XPW-9 and ordered two more prototypes. The XPW-9, along with the P-12/F4B fighter, made Boeing a leading manufacturer of fighter aircraft throughout the 1920s and 1930s. Boeing’s maturity as an aircraft company paid off when the U.S. entered the Second World War in 1941.

2 Boeing Airplane Company History “Biplanes by the Sea” Retrieved from http://www.boeing.com/history/narrative/n002boe.html (March 12, 2013) 3 Ibid. 4 Westervelt helped Boeing incorporate the Pacific Aero Products Company, but was transferred by the Navy to the east coast in early in 1916. 5 Boeing Airplane Company History “Growing Pain”, Retrieved from http://www.boeing.com/history/narrative/n005boe.html (March 12, 2013).

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During World War II, Boeing built a large number of B-17 and B-29 bombers. In the beginning of March 1944, production demands allowed Boeing to produce 350 aircraft each month. To prevent an attack from the air, the manufacturing plants were covered with greenery and farmland items. During the war years many of the United States’ leading aircraft companies worked in tandem to support the troops. The Boeing-designed B-17 bomber was also assembled by Lockheed Aircraft Corporation and Douglas Aircraft Company, and the B-29 was a joint effort with Bell Aircraft Company and the Glenn L. Martin Company.

P-8A POSEIDON: CASE STUDY Subsequent to World War II, Boeing’s reach expanded to include research, development, production and modification of manned and unmanned military weapons systems for U.S. and foreign markets. Boeing leveraged its history of developing military aircraft to become the single largest worldwide manufacturer of commercial aircraft. In 1958, Boeing began delivery of the United States' first commercial jet airliner, the 707. A few years later, Boeing added the 720, a slightly faster aircraft with a shorter range. In 1966, Boeing President William M. Allen asked Malcolm T. Stamper to spearhead production of the new 747 airliner, which was to become the foundation on which the company would build its future. At the time, the 747 was a monumental engineering and management challenge. In 1967, Boeing introduced another short to medium-range airliner, the twin-engine 737. The 737 was an overnight success that forever changed passenger travel, making it widely affordable. Since its introduction the 737 has become the best-selling commercial jet airliner in aviation history.6 MARITIME PATROL AND RECONNAISSANCE FORCE: A NECESSITY BORN FROM COMBAT In the spring of 1898, the U.S. sent troops across the Pacific Ocean for the first time in what was to become the Spanish-American War. The Battle of Manila Bay helped catapult the United States into a recognized world power almost overnight. Manila Bay represented the country’s first commitment to defend a territory outside the western hemisphere. Early experiences between the Navy and Marines in developing doctrine for amphibious and expeditionary warfare demonstrated the need for a single operational reconnaissance and patrol force. That doctrine formed the Navy’s foundation when developing aircraft, and shaped the Navy’s accompanying concepts of operation to include defending territory and attacking surface and undersea vessels. The first formal Maritime Reconnaissance and Patrol Force (MRPF) originated with coastal reconnaissance patrols in World War II and eventually grew to support open-ocean missions to hunt for and destroy German and Japanese submarines.7 The MRPF missions consisted of anti-submarine (ASW) and anti-surface warfare (ASuW) and reconnaissance. Following World War II, the demand for MRPF grew globally. To meet the evolving demands, an airborne capability was needed. Developing an airborne capability provided the MRPF agility, scalability and made it less dependent on fixed deployment locations and support systems. Missions would continue to grow beyond ASW and ASuW to include ground-based reconnaissance and combat missions.8

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THE P-3: A VERY OLD SUCCESS STORY

The first crown jewel in the MRPF fleet was the P-3 Orion (P-3). For the last five decades, the P-3 has performed a variety of missions including ASW, ASuW, mine warfare, intelligence gathering, and other maritime surveillance and reconnaissance tasking. When conceived, the P-3’s estimated lifespan in performing maritime missions was 10,000 flying hours. Over time the Navy increased the P-3’s missions beyond its original scope, and the post-911 security environment increased flying hours far beyond the original plan. The lack of a suitable replacement means that today’s P-3s are being flown by the grandchildren of its original pilots, and with over double the number of recommended flying hours. 9

6 In 1997 Boeing and McDonnell Douglas merged. Other mergers during this time period were confined to the industry; this merger was unique in combining a defense firm with a largely civilian one. 7 Osborne, S.R., & Prindle, B.C. (2003). Transforming maritime patrol and reconnaissance. John Hopkins APL Technical Digest, 24(3), 276-283. 8 Ibid. 9 K.B. Sherman, MMA RFP Released as Airframe Fatigue and Money Problems Collide, 2004 Retrieved from http://www.navlog.org/ (March 11, 2013)

P-8A POSEIDON: CASE STUDY Although it has served well for over a half century, the P-3 does not have much flying time left. In the mid-1990s, the U.S. Navy’s Naval Air Systems Command (NAVAIR) first revealed that the P-3 would make its last U.S. Navy flight sometime in 2015, citing “material condition” and “fatigue life,” as the primary reasons for retirement. 10Recent modifications have sharpened its capabilities, and even given the P-3 a land-attack and surveillance role, but as the individual who manages the P-3 program for the Navy puts it “that airplane’s been a great airplane for many, many, many years, but it’s old.”11 That age generates ever-higher maintenance costs, taking funds that could flow instead to other Navy programs. Recognizing that the P-3 is nearing the end of its life, the Navy initiated the next generation MMA program to modernize the fleet’s search and attack functions as currently executed by the P-3. The MMA program’s goal is a modern, highly reliable airframe that can be equipped with the latest sensors, weapons and links to other systems, creating improved surveillance over water and land, and upgraded attack capabilities. Officials intend for new requirements to allow a smaller force to provide worldwide response capabilities, while using a smaller support infrastructure. Most critical among these requirements is the ability to sustain and improve: •

Armed surveillance and reconnaissance in maritime and littoral areas

•

Collection, processing, and dissemination of environmental data and acoustic signals, imagery, communications, and electronic intelligence

•

Evolution into a network-centric environment 12

LESSONS LEARNED FROM MMA FAILURE In early 1987 the Navy released a draft Request for Proposal (RFP) for a P-3 replacement. At the time, only Lockheed expressed an interest in competing for the platform. In an effort to foster competition, the Navy expanded the scope to allow for commercial derivative aircraft, and prepared a second draft RFP. However, the Office of the Secretary of Defense (OSD) directed the Navy to delay the RFP’s release out of concern that the Navy had not performed adequate analysis of commercial aircraft characteristics necessary to replace the P-3.13 In May 1987, the OSD directed the Navy to conduct a study to determine patrol aircraft mission requirements.14 To complement the study and enhance the RFP, the Navy solicited input from industry and government stakeholders to assess the operational potential of commercial derivative aircraft. The solicitation specified that “[commercial derivatives]…may lead to different requirements (payload, range, speed, survivability, etc.) than currently exist or have been envisioned.”15 In September of 1987, the Navy released a final RFP that incorporated OSD’s findings and industry responses. The RFP generated bids from Boeing, Lockheed and McDonnell Douglas, satisfying the need for increased competition. NATIONAL DEFENSE BUSINESS INSTITUTE

10 SeattlePi, Boeing refits old Seattle plant for P-8 aircraft production, November 11, 2010 Retrieved from http://blog.seattlepi.com/aerospace/2010/11/11/boeing-refits-old-seattle-plant-for-P 8-aircraft-production/ 11 U.S. Navy’s Naval Air Systems Command, P-3c Service Life Assessment Program Phases II and III Statement of Work (N00019-98-R-0012 ), Revised October 28, 1998 12 Broad Area Maritime and Littoral Armed Intelligence Surveillance and Reconnaissance Mission Needs Statement, Joint Requirements Oversight Council, Washington, DC (2000). 13 United States Government Accountability Office (GAO) September 1991, Tactical Aircraft: Issues Concerning the Navy’s Maritime Patrol Aircraft. GAO B-244844 14 Ibid. 15 United States Government Accountability Office (GAO) July 1987, Aircraft Requirements: Navy’s Plans to Acquire a New Maritime Patrol Aircraft. GAO B-227526

P-8A POSEIDON: CASE STUDY In October 1988 the Navy selected Lockheed to build the P-7A MMA. Lockheed’s stated goal was “to be technically fully compliant with all of the requirements that the Navy had set out in terms of performance and capability.”16 Its solution for the P-3 replacement, or Long Range Air ASW Capability Aircraft (LRAACA), also known as the P-7A, was to provide the Navy with a substantial upgrade, in the form of new engines, updated avionics (taken from the P-3’s Update IV as provided by Boeing), a more advanced flight control system, and greater payload capacity. 17 The thought was that a P-3 derivative would reduce complexity, acquisition and operational costs. The P-7A also boasted the novel use of a universal floor system that incorporated floor tracks similar to those found on commercial aircraft to secure control consoles. By using the commercial system Lockheed would not have to invest to change the structure of the aircraft to incorporate future capabilities.18 According to a Lockheed spokesperson, the modular configuration ensured utmost flexibility in terms of making modifications and adding items at a later stage in the development process. Another major advantage to the Navy in selecting Lockheed’s design was that the P-3’s existing logistics infrastructure would sustain minimal impact. In January 1989 the DAB approved full-scale development of 127 P-7A aircraft. The total estimated cost of production was $4.9 billion, with an Average Per Unit Cost (APUC) of $56.7 million.19 The P-7A’s first flight was scheduled for late 1991 and Lockheed planned to begin delivering aircraft to the Navy in 1994. The production plan called for 18 P-7As to be produced each year until 2001. 20

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Although envisioned as just an upgrade to the P-3, the solution proposed by Lockheed actually contained significantly increased capabilities and specifications (See Exhibit 1 for P-3 and P-7A specification comparison). These major changes, for example, were part of the Lockheed solution:

•

Four 5,000 horsepower General Electric G.E.38 (T407) turboprops to increase fuel efficiency by 25 percent

•

The wingspan to be 7 feet longer and the cabin length to increase by over 4 feet

•

A new fly-by-wire digital flight control system replacing the P-3’s boosted control system

•

14,000 lb more in payload21

•

120 pre-loaded sonobuoys in dense packs fore and aft of the wings

•

38 additional sonobuoys held inside the aircraft that could be loaded into pressurized chutes in flight

•

12 wing stations to carry a mixture of rockets or flares, Maverick missiles, bombs or mines, torpedoes, and Harpoon missiles. The 200-inch forward bomb bay was to carry either eight (8) torpedoes and four (4) Harpoons or a mix

•

The incorporation of a new interior design with the crew sitting in a U-shape layout with the tactical controller in a central position 22

16 United States Government Accountability Office (GAO) July 1987, Aircraft Requirements: Navy’s Plans to Acquire a New Maritime Patrol Aircraft. GAO B-227526 17 In 1987 the Navy awarded the Update IV mission avionics upgrade contract to Boeing. 18 After Orion, Flight International, September 2, 1989, Retrieved from, http://www.flightglobal.com/pdfarchive/view/1989/1989%20-% 202693.html?search=Orion.( Lockheed stated that prior to the P-7A, the planes had “one-of-a-kind” configurations, which were very expensive to install). 19 Ibid. 20 P-3 Orion/P-7A LRAACA, Flight International, 19 August 1989, Site last visited on February 21, 2013, Retrieved from, http://www.flightglobal.com/pdfarchive/view/1989/1989%20-%202565.html?search=Orion 21 Ibid. (The P-7A’s maximum envisioned payload was to total 38,400lb). 22 Ibid.

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Lockheed was quickly overwhelmed by the complexity of the engineering task.23 Within one year of contract award Lockheed had already incurred a 50 percent cost overrun. Less than a year after the DAB approved full-scale development, Lockheed announced a $300 million cost overrun in its development contract due to schedule and design problems. 24 In May 1990, Lockheed sought to be relieved of its obligations under the contract. At that time a Navy official declared: "Those guys signed up to a firm, fixed-price contract to build 125 airplanes. In Lockheed's wildest dreams, the Navy would just forget about the program."25 However, by letter dated July 20, 1990, the Navy terminated the P-7A development contract for default, citing Lockheed’s inability to make adequate progress toward completion of the P-7A in all contract phases.26 P-8A: A FRESH START Requirements for a new MMA were again discussed in 1998, eight years after the cancellation of the P-7A. At thattime, the Navy completed a functional area needs analysis as part of its process to replace both the P-3 and the EP-3 aircraft with a single replacement MMA.27 As a result of the needs analysis, the Navy identified 19 tasks as suitable for the MMA platform that would meet a goal for fleet rollout by the 2010 to 2015 timeframe. The resulting Mission Needs Statement (MNS) called for an aircraft capable of broad area maritime and littoral armed Intelligence, Surveillance and Reconnaissance (ISR). Following the 1998 analysis, the Navy conducted additional studies (strategy to task, shortfalls) as well as the technical and economic feasibility of several military and commercial aircraft. This pre-concept exploration work supported development of a Broad Area Maritime Surveillance (BAMS) and ISR MNS that was validated and approved by the Joint Requirements Oversight Council (JROC) in February 2000, enabling a Milestone 0 decision and entry into the concept exploration phase.28 In 2002, the Navy conducted an Analysis of Alternatives (AoA) to examine the requirements for both manned and unmanned options and joint programs already in the aviation arsenal that would meet the capability needs identified by the National Military Strategy (NMS) and reinforced by the Undersea Superiority Initial Capabilities Document (ICD). The findings pointed to a medium-sized commercial or military derived manned aircraft for broad area ASW that was also capable of conducting maritime ISR missions.

23 Ibid. 24 United States Government Accountability Office (GAO) September 1991, Tactical Aircraft: Issues Concerning the Navy’s Maritime Patrol Aircraft. GAO B-244844 25 Vartabedian, Ralph, Los Angeles Times, July 21, 1990, Navy Cancels $600-Million Lockheed Plane Contract , Site last visited on February 20, 2013, Retrieved from: http://articles.latimes.com/1990-07-21/news/mn-144_1_contract-cancellation 26 Ibid. 27 The Lockheed EP-3 is the signals reconnaissance version of the P-3 Orion, operated by the United States Navy 28 The current DODI 5000.2, issued on May 12, 2013, now defines Milestone A as entry into the analogous technology development phase 29 Boeing’s P 8A proposal was a commercial derivative of the 737-800. The “800” designates a model based off of the 737 production line.

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In September 2002 the Navy began the Component Advanced Development (CAD) Phase I for the next generation MMA (the CAD efforts were analogous to today’s pre-milestone B efforts). Exploratory design contracts were awarded to Boeing for the P-8A, a derivative of the 737, and Lockheed Martin (Lockheed) for a modernized P-3, designated the Orion-21. 29 During CAD Phase I, each contractor reviewed and commented on the MMA requirements and performance based specification drafts, defined a proposed concept to meet the requirements, and developed cost estimates to support the production of their designs. CAD Phase I concluded with a preliminary government requirements review.

P-8A POSEIDON: CASE STUDY In February 2003 the MMA program entered CAD Phase II, an 11-month phase culminating with a Milestone B contract award to a single prime contractor.30 The concept would ultimately be developed and demonstrated in the system development and demonstration (SDD) phase. With each company tasked with providing proposals to study both a Search-and-Attack (SA) variant and a Surveillance-and-Intelligence (SI) variant of the MMA, CAD Phase II provided an opportunity for Boeing and Lockheed to refine their proposed concepts based on the government’s risk assessment and the results of studies and analyses conducted during CAD Phase I.31 Lockheed’s Orion-21 was based on the P-3 airframe, with United Technologies subsidiaries Pratt & Whitney (7,000 shp PW150A turboprop engine) and Hamilton-Sundstrand propeller (the same 8-bladed NP2000 propeller being refitted to carrier-based E-2 Hawkeye AWACS and C-2 Greyhound aircraft) listed as key partners.32 Lockheed Martin's vice president of Special Mission and Reconnaissance Programs, Ted Samples, maintained that the company’s design gave the Navy the best solution for the MMA missions.33 “We [Lockheed] made a deliberate design decision to select a turboprop engine because it is optimal for the mission profile. It will give our aircraft a 60% shorter takeoff roll. It will burn 27% less fuel than a turbofan and provide 50% faster thrust response while loitering on station, which is important when flying at heavy weights, slow speeds and at very low altitudes, which is how this aircraft will be operated.”34 Boeing’s proposal consisted of a next-generation 737 increased gross weight aircraft, militarized with maritime weapons, open mission system architecture, and commercial-like support system for greater affordability. During CAD Phase I, Boeing validated air vehicle performance and developed and analyzed mission system parameters, including surveillance, intelligence and reconnaissance capabilities.35 During the fourth quarter of 2002, Boeing took a 737-700 Boeing Business Jet on a nine-stop, 17-day tour of the United States. The tour exposed the Navy to the 737, and demonstrated its maneuverability and suitability for the MMA mission. At each of the nine stops Navy pilots flew the 737, while other Navy personnel participated as passengers on the flights. In addition to the U.S. demonstration, Boeing completed an international flight demonstration stopping at three U.S. and allied military bases in Europe.36

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Jack Zerr, program manager for multi-mission aircraft programs at Boeing Integrated Defense Systems, stated "We believe our solution is dramatically ahead of any other concept in terms of operation, support, cost and overall performance, during CAD II we will deliver on our promise.” 37

30 Global Security, P-8 Multimission Maritime Aircraft (MMA)Broad Area Maritime Surveillance, retrieved from http://www.globalsecurity.org/military/systems/aircraft/mma.htm 31 Ibid. 32 UTC, Defense Industry Daily Staff, February 10, 2013, P 8 Poseidon MMA: Long-Range Maritime Patrol, and More, site last visited on February 23, 2013, Retrieved from https://www.defenseindustrydaily.com/p8-poseidon-mma-longrange-maritime-patrol-andmore-02980/ (March 11, 2013) 33 Lockheed Martin, December 16, 2003, Lockheed Martin Announces Propulsion Team for Navy's Multi-Mission Maritime Aircraft Competition, retrieved from http://www.lockheedmartin.com/us/news/press-releases/2003/december/LockheedMartin AnnouncesPropulsionTe.html (March 11, 2013) 34 Ibid. 35 Boeing, February 12, 2003, Boeing Receives Contract for Multi-mission Maritime Aircraft Program, retrieved from http://www.boeing.com/news/releases/2003/q1/nr_030212m.htm (March 11, 2013) 36 Ibid. 37 Ibid.

P-8A POSEIDON: CASE STUDY As proof, Boeing pointed to its 737 Surveiller maritime patrol aircraft program in Indonesia, which had successfully provided maritime patrol and exclusive economic zone surveillance over a critical global waterway since 1993. 38 The government received the first set of CAD Phase II deliverables in April 2003. It then conducted independent cost estimates of both the Boeing and Lockheed proposals. The source selection team assessed total program cost to be slightly higher than what the companies proposed. However, Boeing’s proposal, at least for the development phase, was slightly lower in cost than Lockheed’s. P-8A: COMMERCIAL DOMINANCE AT SEA In June 2004, the government source selection team awarded Boeing a $3.89 billion cost-plusaward-fee contract to develop the P-8A as the replacement for the aging P-3.39 The Department of the Navy’s FY2004 MMA program budget justification states that the P-8A will “sustain and improve the armed maritime and littoral intelligence, surveillance, and reconnaissance capabilities for U.S. Naval Forces in traditional, joint, and combined roles to counter changing and emerging threats.”40 It lists the primary roles of the P-8A as “persistent Anti-Submarine Warfare (ASW) and Anti-Surface Warfare (ASuW).”41 The P-8A’s key features/requirements were as follows: •

Open Mission System Architecture: reconfigurable and expandable system facilitating easier, more affordable upgrades

•

Sensors: Active multi-static and passive acoustic sensor system, inverse synthetic aperture / synthetic aperture radar, new electronic support measures system, new electro-optical / infrared sensor, magnetic anomaly detector

•

Nine-person crew: dual-pilot cockpit, five mission crew (plus relief pilot and in-flight technician)

•

Workstations with universal multi-function displays, ready accommodation for additional workstation, workload sharing

•

Lethality: internal weapons bay, four wing pylons, two centerline hard points with digital stores management allowing for carriage of joint missiles, torpedoes and mines. Search stores: rotary reloadable sonobuoy launcher

•

Net Ready: Link-16, Internet Protocol, Common Data Link (CDL), FORCEnet

•

Performance based support/logistics with availability a key performance parameter

38 UTC, Defense Industry Daily Staff, February 10, 2013, P-8 Poseidon MMA: Long-Range Maritime Patrol, and More, site last visited on February 23, 2013, Retrieved from https://www.defenseindustrydaily.com/p8-poseidon-mma-longrange-maritime-patroland-more-02980/ (March 11, 2013) 39 Boeing, May 14, 2004, Boeing team wins $3.89 billion multi-mission maritime aircraft program. Retrieved from http://www.boeing.com/defensespace/military/p8a/news/2004/q2/nr_040614n.html (March 11, 2013) 40 Office of the Under Secretary of Defense (Comptroller) Program Acquisition Cost by Weapons System, February 2012, retrieved from http://comptroller.defense.gov/defbudget/fy2013/FY2013_Weapons.pdf (March 11, 2013) 41 Ibid. 42 Aero News Network, Boeing P-8A Poseidon Deliveries To Start Next Year: Orion Replacement Seen As Vital For Company's Military Image, April 29, 2008 accessed at http://www.aero-news.net/index.cfm?do=main.textpost&id=8c6712c9-3352-406ead3f-1c04c622bda7 (March 11, 2013)

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At the time of Boeing’s selection, the company’s position in the fighter market was nearing an end and its C-17 production line was winding down. At the time, Richard Aboulafia of the Teal Group, an industry consulting firm said, “[T]his [the P-8A] is pretty much it for Boeing’s production of military fixed wing aircraft for the foreseeable future. It better work, because Boeing has a lot riding on this in the fixed-wing market for military aircraft integration."42

P-8A POSEIDON: CASE STUDY Boeing uses a first-in-industry in-line production process that draws on its next generation 737 production system. In the past, commercial aircraft were sent to modification centers where they were taken apart and rebuilt to meet military specifications. Unlike its predecessors, the P-8A is Boeing's first military derivative aircraft to incorporate structural modifications to the aircraft as it moves through the commercial line.43 All P-8A unique modifications are made in sequence during fabrication and assembly. After assembly, the aircraft enters Boeing's mission system installation and checkout facility for final modifications (See EXHIBIT 2, P-8A Manufacturing Flow). Standing in the same Seattle, Washington assembly facility that once produced early version 737 airliners and B-2 bomber components, Chuck Dabuno, Boeing’s Vice President and P-8A program manager, stated “six months ago this was an abandoned warehouse. We’ve gone full circle with bringing the 737 conversion back into this space.”44 According to Dabuno, when the plane reaches Full Operational Capability (FOC), Boeing will move 15 to 18 P-8As a month through the plant.45 Boeing also has plans to sell planes to India and Australia and is in negotiations with other potential foreign customers including Saudi Arabia, Canada, Singapore and Italy.46 As foreign sales increase, the number of planes produced at the facility could be as high as 24 per month. At full rate production, the line could employ roughly 600 people, including executive personnel. The P-8A airframe has been designated a commercial item, and as a result the contractor is not required to submit a full package of cost or pricing data to the government for the airframe. Program officials stated that this designation has not affected recent contract negotiations, and the program negotiated a 10 percent lower unit cost on its second production contract. The commercial item designation has also generated concerns in the past from the Defense Contract Management Agency (DCMA) about the government’s access to production facilities and its ability to conduct surveillance. However, DCMA has started reporting on aircraft quality at the Boeing commercial facility in Washington responsible for the wing, tail, aircraft assembly and engine installation.47 The total procurement cost of the P-8A program is estimated at $25.81 billion, plus $8.06 billion in Research Development Test and Evaluation (RDT&E) funds, bringing the total estimated program cost to $33.87 billion (numbers are aggregated annual funds spent over the life of the program and with no adjustment for price/inflation). This figure excludes military construction (MILCON) costs in support of the program in the amount of $553 million. The unit cost of a P-8A is $176.0 million (flyaway cost) or $197.8 million including support costs. The airframe costs $111.43 million, the two CFM56-7B engines cost $20 million ($10 million each), and the avionics costs $31.57 million.48

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P -8A: NOT JUST ANOTHER 737-800

Boeing intended the P-8A commercial line production to provide cost efficiencies and a decreased production learning curve, but turning one of the world’s top-selling commercial aircraft into a state of the art “sub hunter” and an unparalleled ISR platform would hardly be a simple turnkey operation. The P-8A mission portfolio requires a unique configuration for a 737 airframe. The P-8A is a vastly different aircraft than the P-3 and it must undergo certain changes to adapt it to its required use as a MMA (See Exhibit 3 for an aircraft overlay comparison). 43 Ibid. 44 Ibid. 45 Ibid. 46 Boeing, Boeing Delivers 1st P 8I Maritime Patrol Aircraft, December 20, 2012. Retrieved from http://boeing.mediaroom.com/index.php?s=43&item=2542 (March 11, 2013) 47 General Accountability Office (GAO) March 2012, Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GA) 12-400SP 48 Oestergaard, Joakim Kasper, About the P-8A Poseidon, February 4, 2013, Retrieved from http://www.bga-aeroweb.com/Defense/P-8-Poseidon.html (March 13, 2013).

P-8A POSEIDON: CASE STUDY Commercial airline pilots taking a seat in the cockpit of the P-8A might find it as comfortable and inviting as the Boeing 737 commercial aircraft, other than a few unfamiliar instruments. The plane looks so similar upon approach and entry that pilots might not initially be able to discern any unusual controls until a closer inspection. A bank angle boost selector, a quicker auto-throttle, an armament display and aerial refueling panels are just a few of the additions that set this strengthened, armed and self-protected version of the Boeing 737 apart from its commercial sector counterparts (See Exhibits 4 and 5 for images of the Boeing P-8A). Those differences, along with advanced mission systems in the cabin, were designed by Boeing to transform the way the Navy performs ASW, ASuW, intelligence, surveillance and reconnaissance missions for broad area, maritime and littoral operations subsequent to the 2013 start of the P-8A’s IOC. The most obvious physical changes to the aircraft include the absence of windows, raked wingtips rather than blended winglets, the Electro-Optical Infrared (EO/IR) turret on the forward belly and a variety of mission antennas and fairings. Less obvious are internal modifications to support the mission. Included are electro-mechanical expulsion de-icing systems (EMEDS) installed on the leading edges of the raked wingtips, horizontal and vertical stabilizers. Also hidden most of the time is an aerial refueling port at the top of the fuselage just aft of the cockpit. Although not required for the mission profile, the Navy decided to take advantage of the refueling modifications that had been developed for the 737-based Wedgetail airborne early warning and control aircraft program for the Australian defense forces. The P-8A is designed to operate at extremely low altitudes over the ocean during close-in searches for potentially hostile submarines, and is specially hardened and reinforced to withstand the rigors of low-altitude turbulence and exposure to salt spray. Boeing designed structural upgrades to the fuselage, wings and tail required to support more aggressive tactics and all-weather missions. "It's a vastly different envelope and loads," says Boeing's senior technical integration manager Guy Granger. "The intensity of usage, the number of times at which it will be in high-load factor turns, is much more severe than for the 737."49 The P-8A is also designed to fly at 1,200nm outbound, perform on-station for four hours and make the return trip to base. Once on station, the aircraft may have to take measures that would be considered extraordinary by commercial airline standards, requiring changes to certain flight-control and alerting systems. On the right forward instrument panel is an ASW tactics switch that allows the maximum commanded bank angle to increase to 45° from the usual 28°, a mode that also "cleans up some other things for us", says John Verniest, the P-8A integrated test team operational flight test director for the Navy.50 The clean-up includes removing the normal alerts that would be issued when flying below 1000ft with landing gear and flaps stowed.51

49 Croft, John (Apr. 26, 2010) Flight Global, CUTAWAY: P 8A Poseidon - A Boeing with boost of bravado retrieved from http://www.flightglobal.com/news/articles/cutaway-P 8a-poseidon-a-boeing-with-boost-of-bravado-340955/ 50 Ibid. 51 Tuemler, D. (October 12, 2007). P 8A product support team lead (PSTL) PMA-290/NAWCAD 6.6.1.9, Pax River, Maryland. Power point presentation “CLS vs OrganicManpower Status Brief.”

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The P-8A’s sensors are based upon the proven and upgraded maritime patrol sensors and systems utilized in the P-3 modified upgrade program with a host of other systems upgrades and additions. The P-8A contains a display unit similar to its commercial counterpart located in the center of the flight-deck that serves as a tactical situational awareness tool to show pertinent flight tracks and sensor information. Commercial pilots generally fly with the display blank, bringing up detailed

P-8A POSEIDON: CASE STUDY hydraulic or engine information if needed. In the P-8A, that same information will be ever-present in compressed format in an upper display unit if needed, an option also available on civil versions. The starkest difference between the 737 and the P-8A, however, is the addition of a weapons bay in the lower aft fuselage and weapons stations under the wings. To carry the increased payload and weight from other structural changes, the fuselage had to be fitted with sturdier 737-900 wings. The increased weight and additional flight profile meant that the aircraft had to be more powerful than its commercial cousin. The same Rockwell-Collins heads-up guidance system available for the commercial 737-800 is included on the P-8A’s left side. Differences include the angle-of-attack reading replaced with g force in the Z (vertical) axis. Given that more aggressive maneuvering will be likely, the P 8A also has higher auto-throttle gains to help the two CFM International CFM56-7B engines react faster to airspeed commands. Specific changes to the engines include doubling the size of the electrical generators on each to 180kVA from 90kVA. P-8A SOFTWARE DEVELOPMENT In addition to the structural upgrades, the new aircraft had to be able to identify and track targets and communicate with the existing fleet. The P-8A SDD contract covers the full range of platform development, including all on-board mission systems, modifications to the airframe itself, training systems, and software laboratories required to produce almost two million software lines of code (SLOC). The contract also includes provisions for integrated logistics elements, including trainers, simulators, course ware, and all other essential elements required to ready the aircraft for delivery to the fleet. Although the P-8A may appear to be an ordinary 737 commercial jet, minus the windows and familiar paint schemes, its avionics and software integration requirements make it one of the most technologically advanced planes and ambitious projects ever commissioned by the government.

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One key requirement was that P-8A subsystems be backward compatible with the P-3 subsystems. Given that the P-3 had several years of use remaining, as its capabilities were upgraded the P-8A systems had to keep pace with the P-3 performance baseline. As a result, the P-8A’s acquisition strategy was an evolutionary approach using spiral development techniques. This strategy was designed to provide the warfighter with initial capability as early as possible, with additional functions and capabilities added as needed. With such an approach, numerous planned and unplanned changes will affect the system software and Post Deployment Software Support (PDSS), including significant software development as well as sustainment type activities.52 To accommodate this acquisition approach the software system was built around an open architecture concept.

According to program officials, in planning the P-8A program, the Navy limited requirements to capabilities “as good as” those of the P-3 and deferred additional capabilities to later increments.53 In other words, given that the P-3 had another several years of use remaining, as its capabilities are upgraded the P-8A systems must keep pace with the P-3 performance baseline. As an example, a new capability planned for the P-3 must be compatible with the P-8A. The P-8A utilized an open architecture concept to accomplish dual compatibility. As new technologies were explored, many of the existing P-3 systems were available for use as backups. Program officials said that using backup 52 Brad Naegle, Diana Petross: P 8A Poseidon Multi-mission Maritime Aircraft (MMA) Software Maintenance Organization Concept Analysis, Naval Postgraduate School Monterey, California. 25 February 2010 53 United States Government Accountability Office (GAO) March 2007, Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GAO 07-406SP

P-8A POSEIDON: CASE STUDY systems meant that the P-8A would lose some of its advanced capabilities, but it could continue to meet the minimum requirements.54 CLOSE COOPERATION Boeing is not alone in producing the future MMA. Boeing is working closely with CFM International, a 50/50 joint company of France’s Snecma and General Electric Company, to provide the CFM56-7 engines that power the P-8A.This is the same engine that powered the Boeing 737 Airborne Early Warning & Control aircraft, as well as the C-40 transport then in service with the Navy. The two engines will each provide 27,300 pounds of takeoff thrust. The fleet of engines logged more than 30 million flight hours while maintaining an industry-leading .002 percent in-flight shut down rate per 1,000 hours of flight. Boeing is looking to Northrop Grumman's Baltimore-based Electronic Systems sector to provide the EO/IR sensor, the directional infrared countermeasures system, and the electronic support measures system. Northrop Grumman's Mission Systems sector, based in Reston, Virginia, is developing data links for the P-8A. The company's Integrated Systems sector, based in El Segundo, California, will provide support for the mission planning effort. Raytheon is providing an upgraded AN/APS-137 Maritime Surveillance Radar and Signals Intelligence (SIGINT) solution, a revolutionary GPS Anti-Jam, Integrated Friend or Foe, Towed Decoy Self-Protection suites, and the aircraft's Broadcast Info System (BIS) and secure UHF Satcom capability. Smiths Aerospace is supplying both the Flight Management and Stores Management systems on the P-8A. The Flight Management System provides a truly integrated open architecture that is Communications, Navigation, Surveillance/Air Traffic Management CNS/ATM compatible along with an inherent growth path for upgrades. The Stores Management System provided a comprehensive system for the electronic control of integrated weapons management (See Exhibit 6 for the Industrial Base used in building the P-8A). NOT AS EASY AS IT LOOKS In its program cost assessments, P-8A program officials understood that software integration would the independent cost estimators deemed the P-8A’s estimate for software development to be insufficient.55 The independent cost estimate was about $500 million, or roughly 14 percent higher than the original service cost estimate. 56After contract award the program office applied the $500 million to a “software risk reduction” effort with Boeing.

54 Ibid. 55 Ibid. 56 Ibid. 57 Brad Naegle, Diana Petross: P 8A Poseidon Multi-mission Maritime Aircraft (MMA) Software Maintenance Organization Concept Analysis, Naval Postgraduate School Monterey, California. February 25, 2010

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The program’s open architecture approach requires the development of software middleware if it is to allow dissimilar or legacy applications to communicate or share data and resources. The use of middleware increases the software supportability burden of the P-8A system. In addition, this type of architecture adds to the difficulty of maintaining software because problems or integration challenges often occur between applications supported by different organizations. This increases the likelihood that more software maintainers will be needed to support the system. The challenge is exacerbated by the demands placed on program managers to maintain all of the required Information Assurance (IA) certifications.57

P-8A POSEIDON: CASE STUDY Emerging software problems would be addressed by one of at least five different (and possibly competing) organizations that handle resolution and retesting through one or more of the Software Integration Laboratories (SILs). Integration or other software problems involving two or more of the application developers requires the cooperation of both, which may be complicated by issues of contract language, proprietary rights, and/or security clearance and need-to-know concerns.58 Regression testing of re-engineered or patched software components is likely to be significant, due to supportof multiple systems. The numerous software-developing entities anticipated for the P-8A open software architecture requires more personnel compared with an organization that supports an integrated architecture. The cost of PDSS is likely to be significant because of the resulting structures, organizations and personnel supporting two platforms, the P-8A and P-3. As planned, the P-8A would require 161 full-time software maintainers across all applications. As the vast majoritywould likely be contractors, a conservative estimate of a burdened annual rate would be about $150,000 per maintainer. The annual cost for 161 maintainers would be approximately $24.15 million.59 As additional spirals of capability would likely be developed, greater SLOC count would be required, and the cost would increase accordingly. 60 At the start of the P-8A program, all four of its critical technologies -- acoustics subsystem, Electronic Support Measures (ESM) digital receiver, data fusion, and integrated sonobuoy launcher -- were still immature.61 On September 30, 2004, the Navy completed a three-day Systems Design and Demonstration Review (SDDR) of the P-8A program to examine the plan for development in accordance with contract requirements. A Preliminary Design Review (PDR) from October 31 to November 4, 2005, examined whether the P-8A could proceed into detailed design, as well as if the program was capable of meeting performance requirements within cost, schedule and other system constraints. 62 By the time of the Navy’s Critical Design Review (CDR) in July 2007, most of the program components were on schedule, with the exception of the four critical technologies that lagged maturation.

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For example, the acoustic subsystems use advanced signal-processing algorithms that provide sorting and identification of specific sounds. Although the algorithms had the potential to provide increased performance above the required capability, they were not required to meet the program’s baseline performance. Analysis of the acoustic subsystem development at the time of CDR showed that it would require more time and money to complete.63 The program office made the decision to instead use the backup technology, baseline signal processing, without the advanced acoustic subsystems.64 Two of the remaining three critical technologies were not anticipated to reach maturity until 2008 and 2009, at least four years later than optimum.

In March 2007 a Government Accountability Office (GAO) report stated that the program had previously expected all four technologies to be demonstrated in a relevant environment by design review in July 2007.65 58 Ibid. 59 Ibid. 60 Ibid. 61 Ibid. 62 Public Affairs Patuxent River, MD, News Release PEO(A), P 8A MMA Team Conducts Major Design Review, November 8, 2005, last visited February 23, 2013, retrieved from http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=3369. 63 United States Government Accountability Office (GAO), March 2007 Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GAO 07-406SP 64 Between 2006 and 2007 the program office decided against using the advanced acoustic algorithms and instead chose to rely on a proven existing technology. Bellringers (the advanced acoustics) are advanced signal-processing aids that provide sorting and identification of specific sounds. The program office initiated the backup because an analysis of bellringer performance showed that it would not meet expectations. The bellringer algorithms were not required to meet baseline performance requirements, but had the potential to provide increased performance above the required capability. 65 Ibid.

P-8A POSEIDON: CASE STUDY In addition, prior to CDR, in his 2006 annual report, the Director Operational Test and Evaluation (DOT&E) assessed that major risks to the planned timeline included the integration of onboard sensors, data processing capabilities, P-8A MMA software integration of weapons stores, weight growth and interoperability with the Navy’s family of intelligence, surveillance and reconnaissance systems. Although the P-8A relied heavily on its commercial cousin, the transition has not been without its challenges. The manufacturing processes for the P-8A airframe are proven, and the number of design drawings increased slightly in 2010 to address deficiencies discovered during testing. However, the program is conducting its remaining development activities concurrently with production, which puts the program at increased risk of experiencing late and costly design changes. The processes for key aircraft subsystems have also been assessed as generally mature, although the program has experienced some quality issues. Due to these unresolved issues, the execution of testing is at risk, which may delay the start of Initial Operational Test and Evaluation (IOT&E) by several months. DOT&E’s Annual Assessment for 2010 identified 75 system shortfalls in the P-8A program in a laboratory environment before test aircraft were available for flight testing. The shortfalls included aspect areas of track management, acoustics, sonobuoy and weapons deployment, flight planning and interoperability with onboard sensors. Thirty of the 75 deficiencies degraded mission performance, had no operator workaround and had no corrective program in place to fix the deficiencies. The shortfalls identified during the Operational Assessment, if not addressed, pose a risk to a successful IOT&E (See Exhibit 6 for the 2010 DOT&E Report on the P-8A). CONCLUSION Once inside the building Eastburg and his team make their way to a third floor conference room, where the Vice Chairman of the Joint Chiefs, the Secretary of Army, the Secretary of the Air Force, the Secretary of the Navy, the Navy’s Service Acquisition Executive, the Under Secretary of Defense Comptroller and a variety of Navy acquisition staff members are already seated at a long conference table. Another row of chairs lines three of the room’s four walls. There are no empty seats. The group is informed that the DAB Chairman and USD(AT&L), Dr. Ashton Carter is “tied up in another meeting and running a few minutes behind.” As Secretary Carter enters the room everyone stands. “Please take your seats,” he says. After an exchange of pleasantries and small talk, the focus shifts to the Secretary of the Navy who formally introduces the NAVAIR team.

Captain Moran realizes he has a challenge ahead. Explaining how the P-8A program overcame issues in technology maturation and software development, and the challenges surrounding the use of a commercial derivative to posture the Navy positively for LRIP, will be difficult. Knowing that he must contend with the recent DOT&E Annual Assessment that raised doubts concerning the P-8A’s readiness for LRIP only increases his burden. As Captain Moran begins explaining the P-8A program’s path forward, and what steps it must take to resolve any issues (immature technologies, production baseline, corrective actions, LRIP contract), he can faintly hear the drum of the rain on the windows.

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Secretary Carter gestures to Eastburg’s team to begin. Capt. Moran is NAVAIR’s lead briefer. For Moran, the good news is that despite its shortfalls, the P-8A program has remained on schedule and under budget. The even better news is that given the safety concerns and increasing maintenance cost associated with the P-3, the P-8A is a program the Navy requires.

P-8A POSEIDON: EXHIBITS EXHIBIT 1

P-3C

P-7A

Max Takeoff Gross Weight

139,760 lbs

171,350 lbs

Flight Design Gross Weight (3.0g)

135,000 lbs

165,000 lbs

Design Zero Fuel Weight

77,200 lbs

105,000 lbs

Maximum Payload

22,237 lbs

38,385 lbs

Fuel Capacity

Maneuver Weight (3.5g)

62,587 lbs

66,350 lbs

Maximum Landing Weight

114,000 lbs

144,000 lbs

Design Landing Weight

103,880 lbs

125,190 lbs

150-300

Wing Span

99.6 ft

106.6 ft

Wing Area

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Sonobuoy Capacity

137,000 lbs

1300 sq ft

1438 sq ft

Fuselage Length

116.8 ft

112.7 ft

Height

34.2 ft

32.9 ft

P-8A POSEIDON: EXHIBITS EXHIBIT 2

SPIRIT AERO SYSTEMS Wichita, Kansas MMA Fuselage

BOEING COMMERCIAL AIRPLANES

BOEING INTEGRATED DESFENSE SYSTEMS

Renton, Washington MMA Wings, Empennage, Aircraft Assembly, Engine Installation

Seattle, Washington Mission Systems/I&CO

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P-8A POSEIDON: EXHIBITS EXHIBIT 3

P-8A POSEIDON: EXHIBITS EXHIBIT 4

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P-8A POSEIDON: EXHIBITS EXHIBIT 5

P-8A POSEIDON: EXHIBITS EXHIBIT 6 System •

The P-8A Poseidon is the Navy’s next generation maritime patrol aircraft that will replace the P-3C. The P-8A is based on the Boeing 737-800 aircraft, but uses the 737-900 extended-range wing.

•

The P-8 is designed to carry and employ anti-ship missiles, air-to-surface weapons, torpedoes, sonobuoys, and other expendables.

•

The P-8A on-board sensors include acoustics and electro-optic sensors.

•

Survivability enhancement and vulnerability reduction features are incorporated into the P-8A design.

•

Susceptibility is reduced with an integrated Aircraft Survivability Equipment suite that consists of a radar warning receiver, chaff/flare dispenser, missile warnings system, directed infrared countermeasures, and an Electronic Warfare Management Unit to control the system. Radio frequency countermeasures are planned for spiral development, with installation provisions (including wiring and mounting pylons) incorporated into all production aircraft.

•

Vulnerability is reduced through the addition of fuel tank inserting systems and fire protection systems for the vulnerable dry bays that surround aircraft fuel tanks.

Mission Units equipped with the P-8 will perform a wide

P8A- POSEIDON

range of patrol missions, including: •

Armed anti-submarine warfare

•

Armed anti-surface warfare

•

Intelligence collection, processing, evaluation, and dissemination to Naval and joint forces

•

Maritime and littoral reconnaissance

Major Contractor Boeing Defense, Space, and Security – St. Louis, MO Activity •

The integrated test team is currently conducting 10 to 14 test flights per week. This pace is greater than the eight test flights per week in the original test plan. At the beginning of the flight test program, the Navy conducted significantly less than the planned eight test flights per week due to limitations with test instrumentation. There are three flight test aircraft: T-1, T-2, and T-3. The T-1 test aircraft is used for airworthiness testing; it is heavily instrumented, but does not have the mission systems (e.g. sensors) integrated on-board the aircraft. The primary purpose of the airworthiness testing with T-1 is to clear the entire flight envelope for safe operation. Flight testing of T-1 began in October 2009. As of September 28, 2011, the integrated test team conducted 118 test flights (428.9 flight test hours). Airworthiness testing has consisted of flutter, loads, and flying qualities testing. Data have been collected for 2,926 test points of the total 6,048 test points planned to complete the aircraft systems testing.

——

The T-2 test aircraft has the full mission equipment (e.g., sensors, on-board computers, aircrew workstations) integrated on-board. The primary purpose of testing with T-2 is to evaluate the performance of the onboard mission equipment such as the radar, acoustics system, and computers. Flight testing of T-2 began in June 2010. As of September 28, 2011, the integrated test team conducted 94 test flights (407.0 flight test hours). To date, flight testing has focused on testing the acoustics system and radar. Data have been collected for 855 test points out of the total 1,204 test points for mission systems testing.

——

The T-3 test aircraft has the full mission equipment on-board. The primary purpose of testing with T-3 is to ensure the safe separation of weapons and buoys from the aircraft. As such, the instrumentation on-board the T-3 includes a number of cameras to monitor the separation of weapons and sonobuoys launched from the aircraft. Flight testing of T-3 began in July 2010. As of September 28, 2011, the integrated test team conducted 73 test flights (304.3 flight test hours).

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——

P-8A POSEIDON: EXHIBITS EXHIBIT 6 (continued) •

Three production-representative test aircraft (T-4, T-5, and T-6) will fly during the IOT&E in FY12. The first production‑representative test aircraft, T-4, flew in June 2011.

•

As of September 28, 2011, the integrated test team has flown 25 test flights (102.0 flight test hours) using T-4.

•

The Navy is tracking system deficiencies discovered in all phases of integrated flight, ground, and laboratory testing. The P-8A Combined Reliability Board regularly reviews reliability data.

•

The Navy continues to use the Weapons System Integration Lab to test software upgrades, tactics, and interfaces with other systems such as the tactical/mobile ground station.

•

The Navy conducted three limited Live Fire Test series in FY11 to support the vulnerability assessment:

•

Simulated engine nacelle fire extinguishing performance testing in the presence of ballistic damage.

•

Ballistic testing of the P-8A In-Flight Refueling piping to assess vulnerabilities related to fire and explosion.

•

Fuel vapor sensor tests to evaluate the capabilities of sensors to detect the presence of explosive fuel mixtures in the lower lobe of the P-8A fuselage.

•

The Navy decided to provide the S-1 structural test article, a Live Fire test asset, to the Advanced Airborne Sensor program for development of that system, delaying planned FY12 LFT&E of the S-1 for the P-8A.

Assessment •

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•

The integrated test team identified the following risk areas for entering and completing a successful IOT&E. ——

Currently, the P-8A has an operational flight envelope limit that precludes it from flying at a bank angle greater than 48 degrees when maneuvering. In order to fly operationally realistic tactics during antisubmarine warfare missions, the aircraft will have to fly maneuvers that require a bank angle of 53 degrees. The P-8A full flight envelope should be cleared for flight to conduct operationally realistic missions and maneuvering flight profiles during the IOT&E.

——

Priority 1 and 2 software problems that will affect IOT&E remain open. Although 92 percent of the priority 1 and 2 software problems have been closed, the current closure rate is not sufficient to have all the software problems resolved by the start of IOT&E. Priority 1 software problems prevent a mission-essential capability from being performed. Priority 2 software problems affect mission-essential capabilities, and there is no acceptable workaround for these problems onboard the P-8A. There are 369 priority 1 and 2 software problems as of September 21, 2011. Software problems discovered during the later stages of the integrated testing may not be fixed in the software version that is currently planned for IOT&E, and may require additional software upgrades prior to starting IOT&E to ensure the software is production representative.

——

The immaturity of the mission systems degrades mission effectiveness and suitability. Reliability is currently below the system requirement due to discovery of software problems in the mission systems, such as the acoustics system, that prevent essential capabilities required of the systems.

Although the Navy is tracking reliability to date, the sample size (number of test hours) is still too small to fully assess whether the P-8A will meet its reliability, maintainability, and sustainment requirements. The current point-estimate reliability is 7.45 mean flight hours between mission aborts, compared to a system requirement of 11.7 hours.

•

The Navy is approximately two months behind schedule in collecting test point data based on their re-baselined schedule constructed in January 2011. The primary reasons for the delay have been earlyon instrumentation problems on the test aircraft, shortfalls in mission systems maturity, unanticipated delays due to software and hardware upgrades, and delays in the engineering analysis of flight test data. The instrumentation problems experienced early in the flight test program have been resolved. The delay in collecting test point data will probably delay completing the airworthiness testing to clear the entire flight envelope for safe flight.

P-8A POSEIDON: EXHIBITS EXHIBIT 6 (continued) •

The horizontal tail pitch control is vulnerable to the armor piercing incendiary threats tested. The larger armor piercing incendiary threat severed the horizontal tail pitch control, resulting in loss of aircraft flight control. However, the pitch control’s cross-sectional area is small and surrounded by internal components that provide shielding against threats, thus its susceptibility to threats is small.

•

The limited FY11 Live Fire Test series demonstrated that: ——

The engine nacelle fire extinguisher system is effective against fires in the presence of nacelle damage up to the specification level of ballistic projectile threats.

——

In-flight refueling plumbing does not significantly contribute to P-8 vulnerability to ballistic threats.

——

Fuel vapor sensors that will be installed in the P-8 to detect the presence of fuel leaking from tanks in the fuselage lower lobe were sufficiently sensitive to detect such leakage well before explosive mixtures could develop.

The LFT&E program is adequate to assess the vulnerability and survivability of the P-8A. However, currently there is significant risk in completing LFT&E prior to full-rate production because the Navy has given the Advanced Airborne Sensor program priority for the Live Fire S-1 static test asset, delaying scheduled completion of P-8A LFT&E.

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P-8A POSEIDON: EPILOGUE EPILOGUE The LRIP briefing to the DAB could not have gone better. The questions were detailed and thoughtful, and the DAB approved the Navy’s P-8A program to begin LRIP. As the team exits the Pentagon they are overjoyed. Eastburg had dreamed of this day since the first contract for the P-8A was signed on an oil box in the trunk of a car after a mistimed fire alarm emptied the headquarters of the Naval Air Systems Command in 2002. 66“What an aircraft. What a timeline. What a success story,” he commented. But acquisition success stories like P-8A do not just happen by accident. Eastburg said the P-8A was a “tribute to the many people who gave life to this aircraft by staying dedicated to precision execution.”67 In January 2011, Boeing received a $1.6 billion contract for the LRIP of the first six aircraft, including funding for spares, logistics and training devices. IOC is scheduled for 2013. The first production aircraft made its initial flight on July 7, 2011, and was officially delivered to the Navy on March 4, 2012. As of November 5, 2012, five production aircraft have been delivered.

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The Navy delayed the P-8A’s IOT&E from February 2012 to September 2012 to develop and test a series of mission system software improvements intended to correct significant radar, EO/IR sensor, ESM and communications system performance deficiencies identified during developmental testing. From May 2012 to September 2012, Navy operational testers conducted a series of pre-IOT&E integrated developmental and operational test events using production representative test aircraft and interim Operational Flight Profile (OFP) software releases to evaluate the P-8A deployment capabilities and assess evolving aircraft and mission system maturity. These events also provided additional flight crew and maintenance training experience in preparation for IOT&E. Major integrated test events included:

•

Joint Warrior fleet exercise conducted with the United Kingdom and other NATO countries in April 2012. Test crews completed six missions totaling 36.3 flight hours during this exercise.

•

U.S.–Australian fleet exercise in Australia in June 2012. Operational test crews completed six missions totaling 24.8 flight hours during this exercise.

•

Rim of the Pacific fleet exercise in Hawaii in July 2012. Operational test crews completed 20 missions totaling 102.2 flight hours during this exercise.

•

Mk 54 torpedo tests at the Atlantic Underwater Test Center in May 2012, Cape Cod Atlantic test areas in August 2012, and Hawaii Pacific test ranges in September 2012.

In August 2012, the Navy completed development of operational program flight software release version 9.3 and approved it for use in IOT&E. This release addressed some of the most serious sensor performance and communications system deficiencies identified during earlier testing. The Navy entered IOT&E beginning with participation in the U.S. Pacific Command Valiant Shield exercise in early September 2012. The Navy is conducting testing in accordance with the DOT&E approved test plan. The P-8A also completed an evaluation of wing fuel tank tolerance against threat-induced hydrodynamic ram damage in September 2012. The Navy completed an initial flight test of the missile warning system, flare dispenser and directed infrared countermeasures system against simulated infrared threats in 2012. The P-8A program

66 NAVAIR News, P 8A Poseidon Receives Warm Welcome to Pax River, June 15, 2010, last visited February 23, 2013, retrieved from http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=4337&highlight=P 8a The MMA RFP was released on October 28, 2003 http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=2524 67 Ibid.

P-8A POSEIDON: EPILOGUE is planning to conduct additional hardware-in-the-loop testing of these systems in early fiscal year 2013 to complete required live fire and operational test requirements. In October 2012, the Navy asked Boeing to update the electronic warfare (EW) subsystems in the P-8A to overcome obsolescence issues apparent prior to deployment to active-duty Navy flight squadrons. Officials of U.S. Naval Air Systems Command at Patuxent River Naval Air Station Md. awarded Boeing an additional $8.5 million contract to update the ESM sensor digital measurement unit of the P-8A to ensure the EW components are not obsolete by the time the aircraft is widely fielded. As it limps into retirement, “The P 3 has laid the ground work for the future of Navy Maritime Patrol and Reconnaissance aircraft and has flown countless hours over land and sea, all while maintaining an excellent service record,” says Captain Moran of the MPRF program office. “As we transition to the P-8[A], we look to continue the tradition that the Navy's current work horse, the P-3, has set in place.”68 In summary, the GAO, in a May 2010 report, highlighted several prudent steps taken by the P-8A leadership that resulted in a development program that adhered to its cost and schedule baseline. Although the P-8A did not have fully mature technologies at development start, program officials identified existing technologies to be used as back-up systems. P-8A program officials also understood that software integration would likely be more complex than the contractor predicted and allocated resources accordingly, and the program received feedback from competing contractors on proposed requirements to make sure the requirements were well-understood before Milestone B. This feedback resulted in some requirement modifications before the award of the development contract.69 In 2013 the Office of the Inspector General plans to conduct and evaluate the Navy’s acquisition management of the P-8A program. The audit will determine whether the Navy is effectively preparing the P-8A for full-rate production, and specifically evaluate whether the Navy is addressing the system shortfalls and increasing its sample size to fully assess system reliability as DOT&E advised both before and after the LRIP decision in August 2010.70

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68 Baynet.com, Navy Unveils First Fleet P 8A Poseidon to Public, April 1, 2012 69 United States Government Accountability Office (GAO) May 2010, Strong Leadership is Key to Planning and Executing Stable Weapon Programs. GAO. 10-522 70 DoD Inspector General Fiscal Year 2013 Audit Plan

P-8A POSEIDON: WORKS CITED Industry Studies and Government Reports: Broad Area Maritime and Littoral Armed Intelligence Surveillance and Reconnaissance Mission Needs Statement, Joint Requirements Oversight Council, Washington, DC (2000). Congressional Budgeting Office, July 2012, CBO Long-Term Implications of the 2013 Future Years Defense Program, retrieved from http://www.cbo.gov/sites/default/files/cbofiles/attachments/07-11-12-FYDP_forPosting_0.pdf Boeing, February 12, 2003, Boeing Receives Contract for Multi-mission Maritime Aircraft Program, site last visited on February 23, 2013, retrieved from ]http://www.boeing.com/news/releases/2003/q1/nr_030212m.htm Boeing, May 14,2004, Boeing team wins $3.89 billion multi-mission maritime aircraft program. Retrieved March 5, 2009, from http://www.boeing.com/defensespace/military/p8a/news/2004/ q2/nr_040614n.html Boeing, Boeing Delivers 1st P-8I Maritime Patrol Aircraft, December 20, 2012. Retrieved from http://boeing.mediaroom.com/index.php?s=43&item=2542 (March 11, 2013). Gilmore, Michael J., Director, Operational Test and Evaluation (DOT&E), December 2012, Fiscal Year 2012 Annual Report, Retrieved from http://www.dote.osd.mil/pub/reports/FY2012/ Lockheed Martin, December 16, 2003, Lockheed Martin Announces Propulsion Team for Navy's Multi-Mission Maritime Aircraft Competition, site last visited on February 23, 2013, retrieved from http://www.lockheedmartin.com/us/news/press-releases/2003/december/LockheedMartinAnnouncesPropulsionTe.html NAVAIR News, P-8A Poseidon Receives Warm Welcome to Pax River, June 15, 2010, retrieved from http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=4337&highlight=P 8a (March 11, 2013).

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Office of the Under Secretary of Defense (Comptroller) Program Acquisition Cost by Weapons System, February 2012, accessed at http://comptroller.defense.gov/defbudget/fy2013/FY2013_ Weapons.pdf (March 12, 2013)

Public Affairs Patuxent River, MD, News Release PEO(A), P-8A MMA Team Conducts Major Design Review, November 8, 2005, retrieved from http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=3369/ (March 2, 2013). The 737 Technical Site, 737/MMA/P 8A, retrieved from http://www.b737.org.uk/mma.htm (March 11, 2013). United States Government Accountability Office (GAO) July 1987, Aircraft Requirements: Navy’s Plans to Acquire a New Maritime Patrol Aircraft. GAO B-227526 United States Government Accountability Office (GAO) September 1991, Tactical Aircraft: Issues Concerning the Navy’s Maritime Patrol Aircraft. GAO B-244844

P-8A POSEIDON: WORKS CITED

United States Government Accountability Office (GAO) March 2007, Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GAO 07-406SP United States Government Accountability Office (GAO) May 2006, Strong Leadership Is Key to Planning and Executing Stable Weapon Programs. GAO 10-522 United States Government Accountability Office (GAO) May 2010, Strong Leadership Is Key to Planning and Executing Stable Weapon Programs. GAO 10-522 United States Government Accountability Office (GAO) March 2012, Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GAO 12-400SP United States Navy’s Naval Air Systems Command, P-3c Service Life Assessment Program Phases II and III Statement of Work (N00019-98-R-0012), Revised October 28, 1998. (March 10, 2013). Periodicals (In Chronological Order): P-3 Orion/P 7A LRAACA, Flight International, 19 August 1989, Site last visited on February 21, 2013, Retrieved from, http://www.flightglobal.com/pdfarchive/view/1989/1989%20-%202565.html?search=Orion After Orion, Flight International, 2 September 1989, Site last visited on February 21, 2013, Retrieved from, http://www.flightglobal.com/pdfarchive/view/1989/1989%20-%202693.html?search=Orion Vartabedian, Ralph, Los Angeles Times, July 21, 1990, Navy Cancels $600-Million Lockheed Plane Contract , Site last visited on February 20, 2013, Retrieved from: http://articles.latimes.com/199007-21/news/mn-144_1_contract-cancellation Aero News Network, Boeing P-8A Poseidon Deliveries To Start Next Year: Orion Replacement Seen As Vital For Company's Military Image, April 29, 2008 accessed at http:// www.aero-news.net/index.cfm?do=main.textpost&id=8c6712c9-3352-406e-ad3f-1c04c622bda7 Public Affairs Patuxent River, MD, News Release PEO(A), P-8A MMA Team Conducts Major Design Review, November 8, 2005, last visited February 23, 2013, retrieved from http://www.navair.navy. mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=3369 Tuemler, D. (October 12, 2007). P-8A product support team lead (PSTL) PMA-290/NAWCAD 6.6.1.9, Pax River,Maryland. Power point presentation “CLS vs OrganicManpower Status Brief”

Brad Naegle, Diana Petross: P-8A Poseidon Multi-mission Maritime Aircraft (MMA) Software Maintenance Organization Concept Analysis, Naval Postgraduate School Monterey, California. 25 February 2010 Croft, John (Apr. 26, 2010) Flight Global, CUTAWAY: P-8A Poseidon - A Boeing with boost of bravado, retrieved from http://www.flightglobal.com/news/articles/cutaway-P-8a-poseidon-a-boe-

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K.B. Sherman, MMA RFP Released as Airframe Fatigue and Money Problems Collide, 2004 http://www.navlog.org/

P-8A POSEIDON: WORKS CITED ing-with-boost-of-bravado-340955/ (March 22, 2013). SeattlePi, Boeing refits old Seattle plant for P-8 aircraft production, November 11, 2010 Retrieved from http://blog.seattlepi.com/aerospace/2010/11/11/boeing-refits-old-seattle-plant-for-P-8-aircraft-production/ (March 23, 2013). Oestergaard, Joakim Kasper, About the P-8A Poseidon, February 4, 2013, Retrieved from http:// www.bga-aeroweb.com/Defense/P-8-Poseidon.html (March 24, 2013). UTC, Defense Industry Daily Staff, February 10, 2013, P -8 Poseidon MMA: Long-Range Maritime Patrol, and More, Retrieved from https://www.defenseindustrydaily.com/p8-poseidon-mma-longrange-maritime-patrol-and-more-02980/ (March 21, 2013). Global Security, P-8 Multimission Maritime Aircraft (MMA) Broad Area Maritime Surveillance, retrieved from http://www.globalsecurity.org/military/systems/aircraft/mma.htm (March 23, 2013).

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Global Security, P-3 History, Retrieved from, http://www.globalsecurity.org/military/systems/aircraft/P-3-history.htm (March 23, 2013).

P-8A POSEIDON: ACRONYM LIST AoA Analysis of Alternatives

PDSS Post Deployment Software Support

APUC Average Procurement Unit Cost ASuW Anti-Surface Warfare

RDT&E Research Development Test and Evaluation

ASW Anti-Submarine Warfare

RFP Request for Proposal

BAMS Broad Area Maritime Surveillance

SA Search-and-Attack

BIS Broadcast Info System

SDD System Development and Demonstration

CAD Component Advanced Development

SDDR Systems Design and Demonstration Review

CDL Common Data Link CDR Critical Design Review CNS/ATM Communications, Navigation, Surveillance/Air Traffic Management

SI Surveillance-and-Intelligence SIGINT Signals Intelligence SILs Software Integration Laboratories

DAB Defense Acquisition Board

SLOC Software Lines of Code

DCMA Defense Contract Management Agency

USD(AT&L) Undersecretary of Defense for Acquisition, Technology and Logistics

DOT&E Director Operational Test and Evaluation EMEDS Electro-Mechanical Expulsion De-icing Systems EO/IR Electro-Optical/Infrared ESM Electronic Support Measures FOC Full Operational Capability GAO Government Accountability Office HQ Headquarters IA Information Assurance ICD Initial Capabilities Document IOC Initial Operational Capability IOT&E Initial Operational Test and Evaluation ISR Intelligence, Surveillance, and Reconnaissance JROC Joint Requirements Oversight Council LRAACA Long Range Air ASW Capability Aircraft LRIP Low Rate Initial Production MMA Multi-mission Maritime Aircraft MNS Mission Needs Statement MRPF Maritime Reconnaissance & Patrol Force NAVAIR Naval Air Systems Command NMS National Military Strategy OSD Office of the Secretary of Defense PDR Preliminary Design Review

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MILCON Military Construction

P-8A POSEIDON TEACHING MODULES

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NDBI Major Defense Acquisition Programs Lessons Learned Case Study in Collaboration with UT/CEE

P-8A POSEIDON: TEACHING MODULES

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The following teaching modules are focused on Major Defense Acquisition Programs (MDAPs) and divided into four distinct sections: requirements, design and production, program management, and budget and funding. These teaching modules are designed to place a class participant at a certain point in time in the P-8A programâ&#x20AC;&#x2122;s history. At that point in time the participant must decide what action he/she will take next based on program information and class room discussions. The modules and associated teaching notes are designed to promote critical decision making with an emphasis on learning from past mistakes to keep those mistakes from being repeated in future MDAPs.

P-8A POSEIDON: REQUIREMENTS Issue 1: Lessons Learned Are There For A Reason The Maritime Reconnaissance and Patrol Force (MRPF) originated with coastal reconnaissance patrols in World War II. As aerospace technology improved in the lead up to World War II, multi-mission aircraft (MMA) were integrated into the maritime missions and specifically engineered to support open-ocean missions to hunt for and destroy German and Japanese submarines. Over time MMA have become some of the United States’ most valuable assets in countering maritime threats. Given the evolutionary nature of the maritime threat, MMA remain scalable and able to be outfitted and tailored to fit specific missions. They must also be responsive and capable of being deployed on short notice. In April 1958, the Navy announced that a derivative of the Lockheed Electra would fulfill its need for a new MMA. The Navy awarded Lockheed an initial research and development contract in May 1958. The new MMA, initially known as the P-3v’s first flight occurred in August 1958. The P-3v was re-designated P-3 Orion (P-3) in 1962.1 By 1987 the P-3 had been in operation for almost 30 years. The last update to the P-3 occurred in 1987, when the Navy began replacing the mission avionics with Boeing’s Update IV Anti-Submarine Warfare (ASW) mission avionics system. In addition to the Navy selecting Boeing to complete Update IV, the Navy also released a draft Request for Proposal (RFP) for a P-3 replacement. At the time, only Lockheed expressed an interest in producing the P-V3 replacement. In an effort to induce competition the Navy expanded the scope to allow commercial derivative aircraft, and prepared a second draft RFP. Prior to release of the second draft RFP, the Office of the Secretary of Defense (OSD) directed the Navy to delay its release.2 OSD was concerned that the Navy had not performed adequate analysis of commercial aircraft characteristics necessary to replace the P-3. In May 1987, the OSD directed the Navy to conduct a patrol aircraft mission requirements determination study.3 To complement the study and enhance the RFP, the Navy solicited comments from stakeholders (industry and government) on the operational potential of commercial derivatives. The solicitation contained the following language “. . . may lead to different requirements (payload, range, speed, survivability, etc.) than currently exist or have been envisioned.”4 In September 1987, the Navy released a final RFP that incorporated the OSD’s findings and industry responses. The new RFP generated bids from Boeing, Lockheed and McDonnell Douglas.

Lockheed’s solution was a substantial upgrade to the P-3. The thought was that a P-3 derivative would reduce complexity, and the Navy’s acquisition and operation cost. The P-7A was to improve upon the P-3’s airframe configuration. The upgrades would come from new engines, updated 1 Global Security, P-3 History, Site last visited February 20, 2013, Retrieved from, http://www.globalsecurity.org/military/systems/ aircraft/p-3-history.htm (March 21, 2013) 2 Tactical Aircraft: Issues Concerning the Navy’s Maritime Patrol Aircraft, (Washington: GAO September, 1991) 3 Ibid. 4 Aircraft Requirements: Navy’s Plans to Acquire a New Maritime Patrol Aircraft, (Washington: GAO July, 1987) 5 5 After Orion, Flight International, 2 September 1989, Retrieved from, http://www.flightglobal.com/pdfarchive/view/1989/1989%20 %202693.html?search=Orion (March 21, 2013)

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In October 1988 the Navy selected Lockheed to build the P-3 replacement, or Long Range Air ASW Capability Aircraft (LRAACA), also known as the P-7A. Lockheed’s proposal was to perform major upgrades to the existing P-3 airframe. A major advantage to Lockheed’s selection was that the P-3’s existing logistics infrastructure would sustain minimal impact. Lockheed stated that it “ . . . wanted to be technically fully compliant with all of the requirements that the Navy had set out in terms of performance and capability . . . .”5

P-8A POSEIDON: REQUIREMENTS avionics (taken from the P-3’s Update IV as provided by Boeing), a more advanced flight control system, and greater payload capacity. Although envisioned as just an upgrade to the P-3, the solution proposed by Lockheed actually contained significantly increased capabilities and specifications (See Exhibit 1 for P-3 and P-7A specification comparison). For example, the following major changes were part of the Lockheed solution: •

Four 5,000 horsepower General Electric G.E.38 (T407) turboprops to increase fuel efficiency by 25%

•

The wingspan to be 7 feet longer and the cabin length to increase by over 4 feet

•

An entirely new fly-by-wire digital flight control system replacing the P-3’s boosted control system

•

14,000 lb more in payload6

•

20 pre-loaded sonobuoys in dense packs fore and aft of the wings

•

38 additional sonobuoys held inside the aircraft that could be loaded into pressurized chutes in flight

•

2 wing stations to carry a mixture of rockets or flares, Maverick missiles, bombs or mines, torpedoes, and Harpoon missiles. The 200-inch forward bomb bay was to carry either eight (8) torpedoes and four (4) Harpoons or a mix

•

The incorporation of a new interior design with the crew sitting in a U-shape layout with the tactical controller in a central position7

One novel feature on the P-7A was the use of a universal floor system that incorporated floor tracks similar to those found on commercial aircraft to secure control consoles. According to a Lockheed spokesperson, the modular configuration ensured extreme flexibility in terms of making modifications and adding items at a later stage in the development process. By using the commercial system Lockheed would not have to invest to change the structure of the aircraft to incorporate future capabilities.8

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In January 1989 the Defense Acquisition Board (DAB) approved full-scale development of 127 P-7A aircraft. The total cost of production was estimated to be $4.9 billion.9 The total per aircraft cost at that time was estimated at $56.7 million. The P-7A’s first flight was scheduled for late 1991 with Lockheed to begin delivery of aircraft by 1994. The production plan called for 18 P-7As to be produced each year until 2001.10

Within one year of contract award Lockheed had already incurred a 50% cost overrun. Lockheed had been overwhelmed by the complexity of the engineering task, which seemed relatively easy when executives signed the contract.11 Less than a year after the DAB approved full-scale development, Lockheed announced a $300 million cost overrun in its development contract due to schedule and design problems.12 In May 1990, Lockheed sought 6 Ibid. (The P-7A’s maximum envisioned payload was to total 38,400lb). 7 Ibid. 8 Ibid. Lockheed stated that prior to the P-7A, the planes had “one-of-a-kind” configurations, which were very expensive to install. 9 Ibid. 10 P-3 Orion/P-7A LRAACA, Flight International, 19 August 1989, Site last visited on February 21, 2013, Retrieved from, http://www.flightglobal.com/pdfarchive/view/1989/1989%20-%202565.html?search=Orion 11 Ibid. 12 Tactical Aircraft: Issues Concerning the Navy’s Maritime Patrol Aircraft, (Washington: GAO September, 1991)

P-8A POSEIDON: REQUIREMENTS to be relieved of its obligations under the contract. At that time a Navy official declared: "Those guys signed up to a firm, fixed-price contract to build 125 airplanes. In Lockheed's wildest dreams, the Navy would just forget about the program."13 However, by letter dated July 20, 1990 the Navy terminated the P-7A development contract for default, citing Lockheed’s inability to make adequate progress toward completion of the P-7A in all contract phases.14

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13 Vartabedian, Ralph, Los Angeles Times, July 21, 1990, Navy Cancels $600-Million Lockheed Plane Contract , Site last visited on February 20, 2013, Retrieved from: http://articles.latimes.com/1990-07-21/news/mn-144_1_contract-cancellation 14 Ibid.

P-8A POSEIDON: EXHIBITS EXHIBIT 6

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Max Takeoff Gross Weight Flight Design Gross Weight (3.0g) Maneuver Weight (3.5g) Design Zero Fuel Weight Maximum Payload Fuel Capacity Maximum Landing Weight Design Landing Weight Sonobuoy Capacity Wing Span Wing Area Fuselage Length Height

P-3C 139,760 lbs 135,000 lbs 77,200 lbs 22,237 lbs 62,587 lbs 114,000 lbs 103,880 lbs 84 99.6 ft 1300 sq ft 116.8 ft 34.2 ft

P-7A 171,350 lbs 165,000 lbs 137,000 lbs 105,000 lbs 38,385 lbs 66,350 lbs 144,000 lbs 125,190 lbs 150-300 106.6 ft 1438 sq ft 112.7 ft 32.9 ft

P-8A POSEIDON: INFLECTION POINTS Fast forward to 2002. The Navy is far behind where it had hoped its MMA capabilities would be following cancellation of the P-7A twelve years earlier. The P-7A failure highlighted the importance of establishing realistic and well understood requirements. By 2002 it was time to embark on a new program to replace the P-3.

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P-8A POSEIDON: DISCUSSION TOPICS

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1. How would you approach defining and managing the requirements for the P-3â&#x20AC;&#x2122;s replacement? 2. What pitfalls do you see from the P-7A that you can avoid?

P-8A POSEIDON: TIMELINE

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P-8A POSEIDON: DESIGN & PRODUCTION Issue 2: Go With What You Know Or Try Something Different In 1997 the US Navy began a two-year requirements study and the Defense Acquisition Board (DAB) directed a number of concept studies during the 2000 to 2002 period to determine the P 3 Orion’s (P 3) eventual replacement.15By 2002 the Navy found itself far behind where it had hoped its Multi-Mission Aircraft (MMA) capabilities would be following cancellation of the P 7A twelve years earlier. To remedy the lack of next generation maritime patrol and reconnaissance aircraft, the Component Advanced Development (CAD) Phase I for the next generation MMA began in September 2002 (the CAD efforts were analogous to today’s pre-Milestone B efforts). Exploratory design contracts were awarded to Boeing for the P 8A, a derivative of the 737 16, and Lockheed Martin for a modernized P 3, named the Orion-21. During CAD Phase I, each contractor reviewed and commented on the MMA requirements and performance based specification drafts, defined a proposed concept to meet the requirements, and developed cost estimates to support the production of their designs. CAD Phase I concluded with a preliminary government requirements review. In February 2003 the MMA program entered CAD Phase II, an 11-month phase culminating with a Milestone B contract award to a single prime contractor.17 The concept would ultimately be developed and demonstrated in the system development and demonstration (SDD) phase. With each company tasked with providing proposals to study both a Search-and-Attack (SA) variant and a Surveillance-and-Intelligence (SI) variant of the MMA, CAD Phase II provided an opportunity for Boeing and Lockheed to refine their proposed concepts based on the government’s risk assessment and the results of studies and analyses conducted during CAD Phase I.18 The government received the first set of CAD Phase II deliverables in April 2003. It then conducted independent cost assessments of both the Boeing and Lockheed proposals. The source selection team assessed total program cost to be slightly higher than what the companies proposed. However, Boeing’s proposal, for the development phase, was slightly lower than Lockheed’s. Lockheed’s Orion-21 design was based on the P-3 airframe, with United Technologies subsidiaries Pratt & Whitney (7,000 shp PW150A turboprop engine) and Hamilton-Sundstrand propeller (the same 8-bladed NP2000 propeller being refitted to carrier-based E-2 Hawkeye AWACS and C-2 Greyhound aircraft) listed as key partners. 19

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Lockheed Martin's vice president of Special Mission and Reconnaissance Programs, Ted Samples, said that the Lockheed Martin design gave the Navy the best solution for the MMA missions.20

“We [Lockheed] made a deliberate design decision to select a turboprop engine because it is optimal for the mission profile. It will give our aircraft a 60% shorter takeoff roll. It will burn 27% less fuel than a turbofan and provide 50% faster thrust response while loitering on station, which is important when flying at heavy weights, slow speeds and at very low altitudes, which is how this aircraft will be operated.” 21 15 UTC, Defense Industry Daily Staff, February 10, 2013, P-8 Poseidon MMA: Long-Range Maritime Patrol, and More, site last visited on February 23, 2013, Retrieved from https://www.defenseindustrydaily.com/p8-poseidon-mma-longrange-maritime-patrol-andmore-02980/ 16 The P 8A is a derivative of the 737-800. The “800” constitutes a variant within Boeing’s 737 production line. 17 Global Security, P-8 Multimission Maritime Aircraft (MMA)Broad Area Maritime Surveillance, site last visited on February 23, 2013, retrieved from http://www.globalsecurity.org/military/systems/aircraft/mma.htm 18 Ibid. 19 UTC, Defense Industry Daily Staff, February 10, 2013, P-8 Poseidon MMA: Long-Range Maritime Patrol, and More, Retrieved from https://www.defenseindustrydaily.com/p8-poseidon-mma-longrange-maritime-patrol-and-more-02980/ (Feb. 23, 2013). 20 Lockheed Martin, December 16, 2003, Lockheed Martin Announces Propulsion Team for Navy's Multi-Mission Maritime Aircraft Competition, retrieved from http://www.lockheedmartin.com/us/news/press- releases/2003/december/LockheedMartin AnnouncesPropulsionTe.html (Feb. 23, 2013). 21 Ibid.

P-8A POSEIDON: DESIGN & PRODUCTION Lockheed Martin selected a variant of the Pratt and Whitney PW150A turboprop engine as the best overall value because of its technical performance, low risk, schedule, life cycle costs, and ability to meet MMA mission requirements. The PW150A turboprop, a 7,000 shp-class engine, is part of the highly successful PW100 engine family, a global leader in the regional airline turboprop market that has accumulated more than 80 million operating hours on more than 1,900 aircraft.22 Executives at Lockheed claimed the selection of this advanced engine and propeller combination allowed the Lockheed MMA solution to exceed all performance-based requirements with an unprecedented level of persistence and availability, and with a 99.96% dispatch rate, airliner like propulsion reliability.23 Boeing’s proposal consisted of a next-generation 737 increased gross weight aircraft, militarized with maritime weapons, open mission system architecture, and commercial-like support system for greater affordability. During CAD Phase I, Boeing validated air vehicle performance and developed and analyzed mission system parameters, including surveillance, intelligence and reconnaissance capabilities.24 During the fourth quarter of 2002, Boeing took a 737-700 Boeing Business Jet on a nine-stop, 17-day tour of the United States. The tour exposed the Navy to the 737, and demonstrated its maneuverability and suitability for the MMA mission. At each of the nine stops Navy pilots flew the 737, while other Navy personnel participated as passengers on the flights. In addition to the U.S. demonstration, Boeing completed an international flight demonstration stopping at three U.S. and allied military bases in Europe. 25 Jack Zerr, program manager for multi-mission aircraft programs at Boeing Integrated Defense Systems stated: “We [Boeing] believe our solution is dramatically ahead of any other concept in terms of operation, support, cost and overall performance, during CAD II we will deliver on our promise.” 26 As proof, Boeing pointed to its 737 Surveiller maritime patrol aircraft program in Indonesia, which had successfully provided maritime patrol and exclusive economic zone surveillance over a critical global waterway since 1993.27

22 Ibid. 23 Ibid. 24 Boeing, February 12, 2003, Boeing Receives Contract for Multi-mission Maritime Aircraft Program, retrieved from http://www.boeing.com/news/releases/2003/q1/nr_030212m.htm (March 21, 2013) 25 Ibid. 26 Ibid. 27 UTC, Defense Industry Daily Staff, February 10, 2013, P-8 Poseidon MMA: Long-Range Maritime Patrol, and More, Retrieved from https://www.defenseindustrydaily.com/p8-poseidon-mma-longrange-maritime-patrol-and-more-02980/ (Feb. 23, 2013).

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In procuring the new MMA Lockheed could lean on over 50 years of experience in producing the current maritime patrol aircraft (P-3). Lockheed was familiar with the MMA mission profile and its understanding and past involvement weighed heavily in its favor. However, Boeing’s 737 had its advantages. First, the Boeing solution was based on a successful commercial airframe built using a proven production process. This could potentially reduce cost and increase time savings through production. Second, an enormous amount of equipment and staff existed world-wide that was familiar with the 737 commercial derivatives. Finally, Boeing’s ability to leverage its experience with the 737 program also meant that the Navy would receive the 737 one year sooner than Lockheed’s Orion-21. However, if the Boeing solution was chosen, there would be significant challenges. The 737 would be an entirely new configuration based on a commercial aircraft. The existing infrastructure might not support the new aircraft, and would have to be reconfigured at a potentially considerable cost. Finally, the 737 would have to operate in an austere environment without an established infrastructure overseas.

P-8A POSEIDON: INFLECTION POINT

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It is now 2003. The P-3 has been in operation for nearly 50 years and is nearing the end of its lifecycle. The Government is evaluating Boeing and Lockheed’s proposals for down select to enter system development and demonstration and follow on production and support. Boeing’s proposal is a commercial derivative while Lockheed’s proposal is based on the P-3 and relies upon an existing logistics infrastructure.

P-8A POSEIDON: DISCUSSION TOPICS 1.

What are the similarities and differences of Boeing and Lockheed’s approach to fulfilling the MMA’s needs?

2. How would you accommodate for these differences and similarities in source selection? 3. What do you believe is the major risk of each contractor’s approach? And, if that contractor is selected, how would you mitigate that risk?

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P-8A POSEIDON: TIMELINE

P-8A POSEIDON: PROGRAM MANAGEMENT Issue 3: Success Is All in the Approach Although it has served valiantly as the United States’ “eye in the sky” for nearly a half century, the P-3 simply does not have much flying time left. As Capt. Mike Moran, who manages the P-3 and P-8A programs for the Navy put it, “that airplane’s been a great airplane for many, many, many years, but it’s old.” 28 In 2012, the plane will celebrate its 50th birthday. When conceived, the P-3’s estimated lifespan was 10,000 flying hours, but the increased demand for global vigilance in the post-911 security environment, and the lack of a suitable replacement means that today’s P-3s are being flown by the grandchildren of its original pilots, and with over double the number of recommended flying hours. 29 In the mid-1990s, the Naval Air Systems Command (NAVAIR) first revealed that the P-3 would make its last U.S. Navy flight sometime in 2015, citing “material condition” and “fatigue life,” as the primary reasons for retirement.30 The longer a P-3 stays in service and the more maintenance it requires, the more expensive it is to operate and the less money the Navy has to fund other programs. Rear Adm. Steven Eastburg, Program Executive Officer (PEO) for Anti-Submarine Warfare (ASW), Assault and Special Missions programs said that the arrival of the P-8A Poseidon was a day he had dreamed of “since the first contract for the P-8A was signed on an oil box in the trunk of a car after a mistimed fire alarm emptied the headquarters of the Naval Air Systems Command” in 2002.31 “What an aircraft. What a timeline. What a success story,” he commented. But acquisition success stories like P-8A do not just happen by accident. Eastburg said the P 8A was a “tribute to the many people who gave life to this aircraft by staying dedicated to precision execution.”32 When the Navy selected Boeing to produce the next generation Multi-mission Maritime Aircraft (MMA) in 2004, Boeing’s position in the fighter market was nearing an end, and its C-17 production line was winding down. At the time, Richard Aboulafia of the Teal Group, an industry consulting firm said, “This is pretty much it [P-8A],” for Boeing’s production of military fixed wing aircraft for the foreseeable future. “It better work, because Boeing has a lot riding on this in the fixed-wing market for military aircraft integration.”33 The P-8A was essentially designed to be a militarized variant of Boeing’s 737-800.34 They would build the fuselage in Wichita. The fuselage would be taken to Renton, Washington where the wings, engines and other components would be added to make the aircraft functional. Then the aircraft would be flown to Seattle to install the mission systems and do the checkout prior to delivery. However, in the past, military spin offs of commercial aircraft were built as commercial aircraft and sent to modification centers, where they were taken apart and rebuilt to meet military specifications.35 The P-8A is Boeing’s first military derivative aircraft to incorporate structural modifications to the aircraft as it moves through the commercial line.36 After assembly, the aircraft enters Boeing’s mission system installation and checkout facility for final modifications. (See Exhibit 1: P-8A Manufacturing Flow) NATIONAL DEFENSE BUSINESS INSTITUTE

28 SeattlePi, Boeing refits old Seattle plant for P-8 aircraft production, November 11, 2010 Retrieved from http://blog.seattlepi.com/a erospace/2010/11/11/boeing-refits-old-seattle-plant-for-P-8-aircraft-production/ (March 13, 2013). 29 K.B. Sherman, MMA RFP Released as Airframe Fatigue and Money Problems Collide, 2004http://www.navlog.org/ 30 U.S. Navy’s Naval Air Systems Command, P-3c Service Life Assessment Program Phases II and III Statement of Work (N00019-98-R-0012 ), (March 21, 2013) 31 NAVAIR News, P-8A Poseidon Receives Warm Welcome to Pax River, June 15, 2010, retrieved from http://www.navair.navy.mil/index. cfm?fuseaction=home.NAVAIRNewsStory&id=4337&highlight=P-8a The MMA RFP was released on October 28, 2003 http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=2524 (March 21, 2013) 32 Ibid. 33 Aero News Network, Boeing P-8A Poseidon Deliveries To Start Next Year: Orion Replacement Seen As Vital For Company’s Military Image, April 29, 2008 accessed at http://www.aero-news.net/index.cfm?domain.textpost&id=8c6712c9-3352-406e-ad3f 1c04c622bda7 (March 21, 2013) 34 Boeing Co. P-8 Overview, accessed at http://www.boeing.com/defense-space/military/p8/index.html 35 SeattlePi, Boeing Refits Old Seattle Plant for P-8 Aircraft Production, retrieved from http://blog.seattlepi.com/aerospace/2010/11/11/ boeing-refits-old-seattle-plant-for-P-8-aircraft-production/ (March 21, 2013) 36 Ibid.

P-8A POSEIDON: PROGRAM MANAGEMENT Standing in the same Seattle, Washington assembly facility that once produced early version 737 airliners and B-2 bomber components, Chuck Dabuno, Boeing’s Vice President and P-8A Program Manager, says, “six months ago this was an abandoned warehouse. We’ve gone full circle with bringing the 737 conversion back into this space.”37 According to Dabuno, when the plane reaches Full Operational Capability (FOC), Boeing will move 15 to 18 P-8As a month through the plant.38 Boeing also has plans to sell planes to India and Australia39 and is in negotiations with other potential foreign customers including Saudi Arabia, Canada, Singapore, and Italy. As foreign sales increase, the number of planes produced at the facility could be as high as 24. At full rate production, the line could employ roughly 600 people, including executive personnel. Although P-8A commercial line production was intended to provide cost efficiencies and a decreased production learning curve, turning one of the world’s top selling commercial aircraft into a state of the art “sub hunter” and an unparalleled Information Surveillance Reconnaissance (ISR) platform was not exactly a simple turnkey operation. The military modification required a complete overhaul of the aircraft’s basic structure and operating systems. As one Boeing official put it, “The typical 737 takes off, climbs, cruises for an hour and a half, descends and lands.”40 The military derivative has eight unique flight profiles, and must be agile at highs speeds and at altitudes as low as 200 ft. above the ocean’s surface.41 Requisite structural changes included strengthening the fuselage, wing, and tail, and enhancing system capacities to provide more cooling capability. The starkest difference between the 737-800 and the P 8A, however, is the addition of a weapons bay in the lower aft fuselage and weapons stations under the wings. To carry the increased payload and weight from other structural changes, the fuselage had to be fitted with sturdier 737-900 wings. The increased weight and additional flight profile meant that the aircraft had to be more powerful than its commercial cousin. In addition to the structural upgrades, the new airframe had to be able to identify and track targets and communicate with the existing fleet. According to program officials, in planning the P-8A program, the Navy limited requirements to capabilities “as good as” those of the P-3 and deferred additional capabilities to later increments.42 Said another way, given that the P-3 had another several years of use remaining, as its capabilities are upgraded the P-8A systems must keep pace with the P-3 performance baseline. As an example a new sensor planned for the P-8A had to be compatible with the P-3, and vice versa. The P-8A utilized an open architecture concept to accomplish dual compatibility. As new technologies were explored, many of the existing P-3 systems were available for use as backups. Program officials said that using backup systems meant that the P-8A would lose

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some of its advanced capabilities, but it could continue meet the minimum requirements.43

At the start of the program, all four of its critical technologies: Acoustics Subsystem, Electronic Support Measures (ESM) digital receiver, Data Fusion, and Integrated Sonobuoy Launcher were still immature.44 The Navy followed prescribed engineering development activities. On September 30, 2004, the Navy completed a three-day Systems Design and Demonstration Review (SDDR) of the Pv8A program to examine the plan for development in accordance with contract requirements. A Preliminary Design Review (PDR) was then held from October 31 to November 4, 2005, to ensure that the P-8A 37 Ibid. 38 Ibid. 39 According to the Boeing Co. website, Boeing made an on-site delivery of the first P 8I aircraft to the Indian Navy in Seattle on December 19, 2012. India will receive two additional P 8Is in 2013, retrieved from http://boeing.mediaroom.com/index.php?s=43&item =2542. (March 21, 2013) 40 The Boeing 737 Technical Site, 737/MMA/P 8A last visited February 23, 2013, retrieved from http://www.b737.org.uk/mma.htm 41 Ibid. 42 United States Government Accountability Office (GAO) March 2007, Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GAO 07-406SP 43 Ibid. 44 Ibid.

P-8A POSEIDON: PROGRAM MANAGEMENT could proceed into detailed design, as well as to determine if the program was capable of meeting performance requirements within cost, schedule, and other system constraints.45 By the time of the Navy’s Critical Design Review (CDR) in July 2007, most of the program components were progressing on schedule, with the exception of the four critical technologies that lagged maturation. For example, acoustic subsystems use advanced signal-processing algorithms that provide sorting and identification of specific sounds. Although the algorithms had the potential to provide increased performance above the required capability, they were not required to meet the program’s baseline performance requirements. Analysis of the acoustic subsystem development at the time of CDR showed that it would require more time and money to complete.46 As a result, the program office decided against using the advanced acoustic algorithms and chose to instead rely on a proven existing technology. In addition, prior to CDR, in his 2006 annual report, the Director, Operational Test and Evaluation (DOT&E) assessed that major risks to the planned timeline included the integration of onboard sensors, data processing capabilities, P-8A MMA software integration of weapons stores, weight growth, and interoperability with the Navy’s family of ISR systems.

Public Affairs Patuxent River, MD, News Release PEO(A), P 8A MMA Team Conducts Major Design Review, November 8, 2005, retrieved from http://www.navair.navy.mil/index.cfm?fuseaction=home.NAVAIRNewsStory&id=3369 (March 21, 2013) United States Government Accountability Office (GAO) March 2007, Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GAO 07-406SP

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45 46

P-8A POSEIDON: EXHIBITS EXHIBIT 1

SPIRIT AERO SYSTEMS

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Wichita, Kansas MMA Fuselage

BOEING COMMERCIAL AIRPLANES

BOEING INTEGRATED DESFENSE SYSTEMS

Renton, Washington MMA Wings, Empennage, Aircraft Assembly, Engine Installation

Seattle, Washington Mission Systems/I&CO

P-8A POSEIDON: INFLECTION POINT As of July 2007, the P-8A program was on budget and on schedule. However, if the P-8A failed to develop as expected or experienced additional schedule slippage, the Navy would have to continue relying on its aging P-3 fleet beyond the planned 2015 retirement date. Having completed CDR, four critical technologies still lagged their maturation plans. A key production decision is imminent in order to meet the requirement for Low Rate Initial Production (LRIP) units to source operational tests and to begin production deliveries.

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P-8A POSEIDON: DISCUSSION TOPICS 1.

You have a program that is on cost and on schedule with some key technologies that are not progressing as fast as you would like, as the PM do you focus your efforts in maintaining cost and schedule, or in providing the warfighter enhanced capability?

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2. What programmatic pressures are driving the finalization of a technical baseline for production, and how would you manage them?

P-8A POSEIDON: TIMELINE

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P-8A POSEIDON: BUDGET & FUNDING Issue 4: Why Didn’t I Think Of That? A Simple Solution for a Complex Problem In June 2004, the government source selection team awarded Boeing a $3.89 billion cost-plusaward-fee contract to develop the P-8A as the replacement for the aging P-3 Orion. The Department of the Navy’s FY2004 Maritime Multi-mission Aircraft (MMA) program budget justification states that the P 8A will “sustain and improve the armed maritime and littoral intelligence, surveillance, and reconnaissance capabilities for U.S. Naval Forces in traditional, joint, and combined roles to counter changing and emerging threats.”47 It lists the primary roles of the P-8A as “persistent Anti-Submarine Warfare (ASW) and Anti-Surface Warfare (ASuW).”48 The P-8A System Design and Development (SDD) contract covers the full range of platform development, including all on-board mission systems, modifications to the airframe itself, training systems, and software laboratories required to produce almost two million software lines of code (SLOC). The contract also includes provisions for integrated logistics elements, including trainers, simulators, courseware, and all other essential elements required to ready the aircraft for delivery to the fleet. Although the P-8A may appear to be an ordinary 737-800 jetliner, minus the windows and familiar paint schemes, its avionics and software integration requirements make it one of the most technologically advanced planes and ambitious projects that the government has ever commissioned. One key requirement was that P-8A subsystems be backward compatible with the P-3 subsystems. Given that the P-3 had another several years of use remaining, as its capabilities were upgraded the Pv8A systems must keep pace with the P-3 performance baseline. As a result, the P-8A acquisition strategy was an evolutionary approach using spiral development techniques. This strategy was designed to provide the warfighter with initial capability as early as possible, with additional functions and capabilities added as needed. With such an approach, numerous planned and unplanned changes will impact the system software and Post Deployment Software Support (PDSS), including significant software development as well as sustainment type activities.49 To accommodate this acquisition approach the software system was built around an open architecture concept. This open architecture approach is likely to require the development of middleware if it is to allow dissimilar or legacy applications to communicate or share data and resources. As an example if a P-3 legacy software application was to run on the P-8A, middleware was required to accommodate the architecture differences. The use of middleware increases the software supportability burden of the P-8A system. In addition, this type of architecture adds to the difficulty of maintaining software because problems or integration challenges often happen between applications supported by different organizations—thus increasing the likelihood that more software maintainers will be needed to support the system than would be likely in an integrated architecture that was designed for supportability and under the control of a single entity. The challenge is exacerbated by program NATIONAL DEFENSE BUSINESS INSTITUTE

managers trying to maintain all of the required Information Assurance (IA) certifications.50

There are multiple software-developing entities, including four contractors (Boeing, Raytheon, Northrop-Grumman, and Smiths, now GE Aviation) and associated subcontractors, and organic Navy developers. The four planned Software Integration Laboratories (SILs) , which will be responsible for software systems development, integration, and testing include: 47 Office of the Under Secretary of Defense (Comptroller) Program Acquisition Cost by Weapons System, February 2012, accessed at http://comptroller.defense.gov/defbudget/fy2013/FY2013_Weapons.pdf 48 Ibid. 49 Brad Naegle, Diana Petross: P 8A Poseidon Multi-mission Maritime Aircraft (MMA) Software Maintenance Organization Concept Analysis, Naval Postgraduate School Monterey, California. February 25, 2010 50 Brad Naegle, Diana Petross: P 8A Poseidon Multi-mission Maritime Aircraft (MMA) Software Maintenance Organization Concept Analysis, Naval Postgraduate School Monterey, California. February 25, 2010.

P-8A POSEIDON: BUDGET & FUNDING

Poseidon P-8A Software Integration Laboratories Facility Weapon System Integration

Location

Lead

Role

Kent, Washington

Boeing

Continuous testing of software and

Laboratory (WSIL)

systems, looking for any malfunctions that need to be corrected. Also develop new features to make systems more intuitive.

Patuxent Systems Integration

Patuxent River, MD

Navy

Laboratory (PaxSIL)

Software testing only. The PaxSIL is a deliverable under the P-8A SDD contract

Mission Systems Integration

Seattle, Washington

Boeing

Radar systems integration.

Seattle, Washington

Boeing

Development of and testing of

Laboratory (MSIL)

Mission Systems Software Development Laboratory

software systems

(SDL)

Emerging software problems would be addressed by one or more of at least five differing (and possibly competing) organizations for resolution and retesting through one or more of the SILs.51 Integration or other software problems involving two or more of the application developers requires the cooperation of both, which may be complicated by issues of contract language, proprietary rights, and/or security clearance and need-to-know concerns.52

As planned, the P-8A would require 161 full-time software maintainers across all applications. As the vast majority would likely be contractors, a conservative estimate of a burdened annual rate would be about $150,000 per maintainer. The annual cost for 161 maintainers would be approximately $24.15 million.53 As additional spirals of capability would likely be developed, greater SLOC count would be required, and the cost would increase accordingly. 54 51 Ibid. 52 Ibid. 53 Ibid. 54 Ibid.

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Regression testing of reengineered or patched software components is likely to be significant, because of the requirement to support multiple systems. With the numerous software-developing entities anticipated for the P-8A software architecture, the personnel support structure is likely to be significantly higher than with a similar-sized organization supporting an integrated architecture supporting a single platform. The cost of PDSS is likely to be significant because of the resulting structures, organizations, and personnel supporting two platforms.

P-8A POSEIDON: BUDGET & FUNDING

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In their program cost assessments, Navy P-8A program officials understood that software integration would likely be more complex and costly than the contractor predicted.55 According to P-8A program officials, the independent cost estimators deemed the P-8A’s estimate for software development to be insufficient.56 The independent cost estimate was about $500 million or roughly 14 percent higher than the original service cost estimate.

55 United States Government Accountability Office (GAO) May 2010, Strong Leadership Is Key to Planning and Executing Stable Weapon Programs. GAO 10-522 56 Ibid.

P-8A POSEIDON: INFLECTION POINT A SDD contract has just been awarded to Boeing for $3.89 billion. The complexity of the software is very apparent, especially given the requirement to maintain compatibility between the P-3 and the P-8A. The independent cost assessment is $500 million or 14 percent greater than the amount covered for software in the contract to Boeing. The Navy has funded the program to the independent cost estimate.57

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57â&#x20AC;&#x192;â&#x20AC;&#x192;Ibid.

P-8A POSEIDON: DISCUSSION TOPICS 1.

You have $500 million programmed above your contract value to cover the software complexities identified by the independent cost estimate? How do you manage this money? Define your options and recommend a strategy for execution.

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2. What is the baseline; is the program in an overrun situation?

P-8A POSEIDON: TIMELINE

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P-8A POSEIDON TEACHING NOTES

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P-8A POSEIDON: TEACHING NOTES This information is to be used in conjunction with the four (4) teaching modules of requirements, design and production, program management, and budget and funding. These teaching notes are designed to give background information on the entire P-8A program and information specific to each respective section. The teaching notes are meant to be used to augment the information already found in the four (4) respective teaching modules, and larger case study document.

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P-8A POSEIDON: REQUIREMENTS The P-7A’s cancellation was the largest cancellation of a program up to that time in which a contractor’s role was terminated by a military service, eclipsing the 1985 termination of the $4 billion Sgt. York anti-aircraft gun program at Ford Aerospace in Newport Beach.58 The cancellation left the Navy with a capable, but rapidly deteriorating, and technologically lacking fleet of P-3 aircraft to fulfill its maritime patrol needs until it could acquire a proficient P-3 replacement aircraft. The Navy would ultimately replace the P-3 with Boeing’s P-8A. This is interesting for many reasons. First, Boeing was familiar with the MMA mission due to winning the competition for the Update IV Avionics in the P-3. Second, the Navy was considering commercial alternatives due to Lockheed touting the P-7A’s use of commercial derivatives inside the cabin. Boeing’s MMA replacement proposal was a 737-800 commercial jet. The Navy chose Boeing’s proposal and awarded it a contract to build the next MMA in 2004. The following paragraphs discuss the P-8A Poseidon’s realized requirements. Delivery of the first P-8A is scheduled for 2013. The P-8A will use the same 737-800 commercial airframe with some modifications. The airframe must accomplish a wide range of tasks. It will search for and destroy submarines, monitor sea traffic, launch missile attacks on naval or land targets as required, act as a flying communications relay for friendly forces, and possibly provide electronic signal intercepts. Like its predecessor (P-3), its radar capabilities will make it well suited for land-surveillance missions, when the Navy decides to use it that way. An aircraft with that many capabilities will play a role in a number of emerging military doctrines. It will be a key component in the Navy’s Sea Power 21 doctrine’s Sea Shield concept, by providing an anti-submarine, anti-ship and anti-smuggling platform that can sweep the area, launch sensors or weapons as needed, and remain aloft for many hours.59 The P-8A MMA will also play a key role in the Navy’s FORCEnet architecture, via development of the Common Undersea Picture (CUP).60 As a secondary role, it will support portions of Sea Power 21’s Sea Strike doctrine with its intelligence, surveillance, and reconnaissance capabilities.

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The P-8As un-refueled range is published as “over 4,000” nautical miles. A more strenuous flight profile would involve 4 hours on station conducting low-level anti-submarine missions, at a range of more than 1,200 nautical miles. A dorsal receptacle allows in-flight refueling if necessary.

58 59 60

Vartabedian, Ralph, Los Angeles Times, July 21, 1990, Navy Cancels $600-Million Lockheed Plane Contract , Site last visited on February 20, 2013, Retrieved from: http://articles.latimes.com/1990-07-21/news/mn-144_1_contract-cancellation The objective of “Sea Power 21” is to ensure that we possess credible combat capability on scene to promote regional stability, to deter aggression throughout the world, to assure access of Joint forces, and to fight and win should deterrence fail. FORCEnet is the Naval component of the Department of Defense’s Global Information Grid and is central to helping the Naval service develop its network-centric operations and warfare capabilities. FORCEnet integrates a set of naval capabilities into a networked distributed combat system.

P-8A POSEIDON: TEACHING NOTES P-8A: Armament The P-8A has 11 weapon hard points: 5 in the rotary weapon bay, 4 under the wings, and 2 under the fuselage. Weapon load can exceed 10 tons/22,000 pounds, and all hard points have digital weapon interfaces. While, the P-3s have been modified to carry sea-skimming attack missiles like the Harpoon, land attack missiles like the Maverick, and even AIM-9 Sidewinder air-to-air missiles, the P-8A will be even more capable, carrying a wide range of armament. The P-8A carry capability is as follows: •

sonobuoys

•

torpedoes

•

depth charges

•

Harpoon anti-shipping missiles

•

Standoff Land Attack Missile (SLAM) or Air-to-Ground Tactical Missile (AGM)-65 Maverick land attack missiles

•

AIM-9 Sidewinders or Mk 54 lightweight torpedoes equipped with the GPS-guided High Altitude Anti-Submarine Warfare Capability (HAAWC) glide bomb kit to extend the P 8A’s capabilities

•

Longshot/HAAWC turns the torpedo into a weapon that can be launched from high altitude (allowing the P-8A to remain within its preferred aerodynamic envelope of high-altitude cruise, and reduce the fatigue and corrosion associated with low-level flight). This capability is not expected until P-8A Increment 2, however, with initial operating capability in 2016

P-8: Sensors Weapons do not mean much unless an enemy can be found. The P-8A will rely on a combination of radars, day/night surveillance equipment, and ESM gear designed to pick up and trace the location of radars and other broadcasting electronics. A “canoe” fairing under the plane is expected to house a mission bay that will initially include the Raytheon-Boeing Littoral Surveillance Radar System (LSRS), designed to provide targeting-grade tracking of moving targets on land and at sea. It reportedly emerged out of a “black” (classified) program. It is an AESA (Active Electronically Scanned Array) MTI (Moving Target Indicator) radar, and has been deployed on some P-3s.

The AN/APS-137Dv5 radar used on the most modern P-3s will also form a key part of the P 8A’s radar suite, after a number of upgrades and a new designation. This enhanced nose-mounted system has been referred to as AN/APS-197, but was formally given the AN/APY-10 designation in June 2006. It offers reduced weight, improved Mean Time Between Failures (MTBF), and a color weather display. In the P-8A, it will also feature improvements such as “joint technical architecture” compliance,

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Later in the program, LSRS is slated for replacement by the Advanced Airborne Sensor (AAS). It is designed to provide targeting-grade tracking of moving targets on land and at sea, and is rumored to have performance standards that match or exceed the current 707-based E-8C Joint Surveillance and Target Attack Radar System (JSTARS) battlefield surveillance aircraft. AAS’ long profile is probably why Boeing moved the P-8A’s weapons bay to the back of the plane in 2003. Its potential capabilities led Boeing to push for replacement of the existing E-8 JSTARS fleet with a “P-8A Airborne Ground Surveillance (AGS)” fleet, instead of upgrading the E-8s with new engines, radars, and electronics.

P-8A POSEIDON: TEACHING NOTES better performance in track-while-scan and target detection modes, and full integration with the Boeing mission system. The AN/ALQ-240v1 Electronic Support Measures system will alert the plane to radar and communications emissions, and geolocate them. It complements the Early Warning Self Protection System, and also enables fast offensive counterattacks. The P-8A’s radars and ESM will be supplemented by L-3 Wescam’s MX-20HD long-range optical surveillance turret. This large surveillance turret houses up to 3 day/night imaging sensors, and 3 laser payloads (i.e. rangefinding, marking/pointing, target designation) that can be swapped in and out. L-3 Enhanced Local Area Processing (ELAP) improves imaging clarity on board, extending effective range and image clarity before the images are broadcast elsewhere. P-8A: Upgrades & Variants Additional modifications and improvements can be expected over the program’s life, as is the case for any major weapon system. The P-8A was designed to incorporate additional “spiral development” of new weapons and equipment, and the first set is Increment 2. In addition to adding Longshot/HAAWC, Increment 2 will feature acoustic and communications upgrades, including improvements to sonobuoy drops and processing. Increment 2 planes are scheduled to become operational around 2016. At the moment, India is the P-8A′s only export customer, though Australia is expected to become one soon. India’s P-8i jets will share a number of systems with the Navy’s P-8As, including a version of the AN/APY-10 radar. Other key technologies will be specific to the P 8i. India’s P 8i adds air-to-air surveillance capabilities to its APY-10 radar, an enhancement that could filter back to the US fleet in future upgrades. With the cancellation of the USAF’s E-10 follow-on, (a combined AWACS and JSTARS aircraft) the Navy’s P-8A Poseidon may even be poised to inherit a dual land and sea surveillance role, especially given NATO’s cancellation of its AGS program’s Airbus 321 Multi-Channel Acoustic Relay (MCAR) surveillance jet.61 The P-8A’s BAM’s Companion

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The P-3 fleet’s heavy use in both maritime surveillance and overland roles points out a potential problem with the P-8A. As an expensive but in-demand asset, a wider coverage scope could actually accelerate the problem of high flight hours building up in a small fleet. The problem is that airplane lives are measured in flight hours, and usage intensity.

The logical response is to pair the P-8As with a lower cost counterpart. Hence the P-8A’s companion Broad Area Maritime Surveillance (BAMS) UAV program, run by NAVAIR’s PMA-263 program management office. The BAMS competition was widely seen as a fight between Northrop Grumman’s high-flying, jet-powered RQ-4 Global Hawk and General Atomics’ turboprop-powered Mariner (a cousin of its MQ-9 Reaper), but other options were offered, including an unmanned business jet variant. Northrop Grumman’s RQ-4N Global Hawk eventually won, and will be known as the MQ-4C Triton. The Navy plans to begin operations in 2015, but schedule delays may jeopardize that.62 61 AGS is survived by a UAV companion based on the RQ-4B Block 40 Global Hawk, which was originally expected to help the Airbus A321 with its land surveillance role. That same 2-tier model survives in the P 8A program, and both tiers also have effective land surveillance capabilities. The P 8A’s Global Hawk UAV companion is called BAMS, Broad Area Maritime Surveillance. 62 UTC, Defense Industry Daily Staff, February 10, 2013, P-8 Poseidon MMA: Long-Range Maritime Patrol, and More, site last visited on February 23, 2013, Retrieved from https://www.defenseindustrydaily.com/p8-poseidon-mma-longrange-maritime-patrol-and more-02980/

P-8A POSEIDON: DESIGN & PRODUCTION P-8A: DESIGN & PRODUCTION The Department of Defense announced on June 15, 2004 that McDonnell Douglas Corp., a wholly owned subsidiary of the Boeing Co., was awarded a $3,889,979,744 cost-plus-award-fee contract to develop the Navy’s P-8A Multi-mission Maritime Aircraft (MMA). The competition was very close, and the companies did an excellent job. Both companies proposed costs and the government assessed those costs, essentially doing an independent cost assessment. This government assessment of the costs in both proposals was slightly higher than what the companies proposed, and the Boeing proposal, at least for the development phase, was slightly lower than the Lockheed proposal. But that’s not all, this is a best value competition based on technical, management, past performance and other factors. So cost alone, was not a discriminating factor. Additionally, the Navy evaluated proposals equally on the technical merits. Both companies proposed performance-based logistics and a degree of contractor logistics support. Because it was not part of the evaluation criteria, Boeing’s worldwide capability for its commercial fleet was not a factor in the source selection decision. After the Navy selected Boeing, it has the opportunity to determine what benefits it can derive from leveraging the commercial 737 support network. However, the proposal provided by Boeing offered the potential to leverage its obvious experience with the 737 airframe to get a MMA slightly sooner, by one year. And the government assessed, consistent with knowing the cost and the schedule of the program, that it may indeed be able to deliver a little sooner. If realized, this will provide a benefit to the Navy that is very helpful. It might allow the Navy to avoid some costs for P-3 fleet sustainment. Traditionally, Boeing would take a completed 737 commercial aircraft, deconstruct it, and modify it into a Naval variant. For the P-8A Boeing proposed to install unique P 8A features in line with normal commercial 737 production flow. Then the aircraft would be flown to Seattle to install the mission systems and do the checkout and the fly-off at that location. This approach significantly reduced the risk relative to other production strategies, and gave the Navy confidence that Boeing could deliver on schedule.

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In November 2003 four of the world’s leading aerospace companies combined forces with Boeing to form the Boeing MMA industry team. This is a crucial step toward making the 737 MMA the most cost-effective solution to the Navy’s maritime patrol requirement. Boeing and partners CFM International, Northrop Grumman, Raytheon, and Smiths Aerospace were focused on winning the MMA prime contractor selection in early 2004. CFM International, a 50/50 joint company of General Electric USA, and Snecma, France, provide the CFM56 military engines that power the Boeing 737 MMA. The 54,000 pounds of combined thrust provided by the CFM56-7B27A engines deliver unparalleled performance from the world’s most reliable high-bypass turbofan. The engines deliver an industry leading .003 percent in-flight shut down rate per every 1,000 hours of flight. Northrop Grumman’s Baltimore-based Electronic Systems sector will provide the electro-optical/infrared (EO/IR) sensor, the directional infrared countermeasures system, and the electronic support measures system. Northrop Grumman’s Information Technology sector, based in Herndon, Va., will develop data links for the MMA. As an integral part of Boeing’s MMA industry team, Raytheon will provide the APS-137 Maritime Surveillance Radar and Signals Intelligence (SIGINT) solutions. Raytheon is also offering its revolutionary GPS Anti-Jam, Integrated Friend or Foe, and Towed Decoy Self-Protection Suites, and the aircraft’s Broadcast Info System (BIS) and UHF Satcom capability. Smiths Aerospace supplies

P-8A POSEIDON: DESIGN & PRODUCTION both the Flight Management and Stores Management systems on the Boeing 737 MMA. The Flight Management System (FMS) provides an integrated open architecture that is CNS/ATM compatible along with an inherent growth path for upgrades. The Stores Management System provides a comprehensive system for the electronic control of integrated weapons management. The Navy completed a Systems Requirements Review (SRR) of the MMA program on September 30, 2004 at a three-day conference in Seattle. At the time of the SRR the Navy determined that the P-8A had approximately 70 percent in common with that of the commercial 737-800 baseline, and 25 percent of the detailed design drawings were complete. The review was a crucial step that permits the program to continue forward in the Systems Development and Demonstration (SDD) phase of the acquisition. This was the first major review of the program since the contract was awarded to Boeing on June 14, 2004. The purpose of the SRR was to ensure understanding of the planned system and contract requirements. Meetings included briefings and discussions that provided a detailed review of documents, such as the technical specifications, statement of work and contract schedule.

63, 64

P-8A Program Management: While the prevention of and defense against state-on-state conflict at sea and maintaining open Sea Lines of Communication to ensure access to materials and the free flow of commerce remains at the forefront of the Navy’s maritime patrol mission, the P-3 mission has expanded to support other missions not originally envisioned. Captain Mike Moran, the Navy PM, calls the P-3 an extremely “versatile” aircraft and says its anti-submarine sensors, “play very well in intelligence, surveillance and reconnaissance roles.”65 Today, the P-3 is an essential element of overland operations in the Middle East and the first line of defense for commercial traffic against Somali pirates. On July 15, 2010 the first P 8As arrived at Patuxent River amidst much fanfare and anticipation. Contrary to the P-7 program which cancelled due to insurmountable challenges, thus far there are few difficult moments in P-8A program’s history. From design, to source selection, to Initial Operational Capability (IOC), both the Navy and Boeing simply seem to have gotten it right.

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The Navy concurred with GAO’s assessment of the P-8A MMA program in 2007. The Navy stated that the program continued to manage the three remaining critical technologies. Furthermore, the maturation of the technologies was on schedule and would be assessed at the critical design review planned for the third quarter of FY07. The airplane design remained approximately 70 percent in common with that of the commercial 737-800 baseline. According to the Navy, the program continued to meet or exceed the cost, schedule, and performance parameters.66

The total procurement cost of the P-8A program is estimated at $25.81 billion, plus $8.06 billion in research and development (“RDT&E”) funds, which means the total estimated program cost is $33.87 billion (numbers are aggregated annual funds spent over the life of the program and no price/inflation adjustment was made). This figure excludes military construction (“MILCON”) costs in support of the program in the amount of $553 million. The unit cost of a P-8A Poseidon is $176.0 million (flyaway cost) or $197.8 million including support costs. The airframe costs $111.43 million, the two CFM56-7B engines cost $20 million ($10 million each), and the avionics costs $31.57 million. 67 63 Global Security, P-8 Multimission Maritime Aircraft (MMA)Broad Area Maritime Surveillance, site last visited on February 23, 2013, retrieved from http://www.globalsecurity.org/military/systems/aircraft/mma.htm 64 Defense Acquisitions: Assessments of Selected Weapon Programs, (Washington: GAO, March 2007), 129, 130 (According to the Navy, the program continues to meet or exceed the cost, schedule, and performance parameters defined in the program baseline) 65 “Boeing refits old Seattle plant for P-8 aircraft production,” SeattlePi accessed at http://blog.seattlepi.com/aerospace/2010/11/ 11/boeing-refits-old-seattle-plant-for-P-8-aircraft-production/ 66 United States Government Accountability Office (GAO) March 2007, Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GAO 07-406SP 67 Oestergaard, Joakim Kasper, About the P-8A Poseidon, February 4, 2013, Retrieved from

P-8A POSEIDON: PROGRAM MANAGEMENT The P-8A is designed to share the ISR role with the Broad Area Maritime Surveillance Unmanned Aerial System (BAMS UAS), but BAMS UAS development was delayed from 2005- 2007. If BAMS UAS development is unable to progress as planned the P-8A will serve as the fallback option. According to the Navy, demand for additional aircraft would increase the overall cost of the P-8A program. Another program likely to affect P-8A is the Aerial Common Sensor (ACS). The ACS is intended to replace three current systems, including the Navy’s EP-3. However, the Army terminated the ACS contract in January 2006 because the airframe selected could not accommodate the intended mission equipment. One of the alternatives assessed by the Navy to replace the EP-3 included incorporating the ACS equipment onto the P-8A airframe.68 Critical technologies: Bellringers are advanced signal-processing aids that provide sorting and identification of specific sounds. Although bellringer algorithms had the potential to provide increased performance above the required capability, they were not required to meet the program’s baseline performance requirements. As of March 2007, none of the three remaining critical technologies had advanced beyond the laboratory environment. The final production hardware was complete for the ESM digital receiver, a technology being leveraged from the EA-18G Growler program. ESM Technology maturity would be demonstrated three years later than recommended by best practices standards. The data fusion and the integrated rotary sonobuoy launcher had not been integrated into a prototype system, but were expected to reach maturity in 2008 and 2009 respectively, at least four years later than recommended by best practice standards. Between 2006 and 2007 the program office decided against using the acoustic bellringer algorithms and chose to instead rely on the backup technology, because an analysis of bellringer performance showed that it would not meet expectations. According to GAO, the Navy continued to manage the three remaining critical technologies and was able to keep them on schedule beyond the 2007 critical design review.69

Risk and tradeoffs are a critical part of every major weapon system decision. As a number of studies have shown, few issues can derail a program like an inaccurate risk assessment prior to Milestone B. In defense acquisition and procurement, a program’s budget, schedule, and performance are all determined to some degree by either risk acceptance or avoidance. For Program Managers (PMs), http://www.bga-aeroweb.com/Defense/P 8-Poseidon.html 68 Ibid. 69 Ibid. 70 United States Government Accountability Office (GAO) May 2010, Strong Leadership Is Key to Planning and Executing Stable Weapon Programs. GAO 10-522

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Program officials observed that, by fostering a reputation for honesty and leadership, they were able to develop credibility with stakeholders, including contractors, and make compelling cases for what was needed. They emphasized the importance of including stakeholders early on in the process of solving problems so they are invested in the solutions being developed. For example, one early program manager for P-8A explained that his cooperative relationship with the requirements community enabled them to speak with a united voice about the need to keep requirements achievable. He described their approach as “starting slow to go fast” as opposed to the more common approach of “rushing to failure.” In addition, he noted that candid communication and a welcoming attitude for scrutiny fostered top cover support from senior leadership in the Pentagon. Together, support from senior leadership and the requirements community for an extended concept development phase permitted the program to invest in success upfront, and this support carried throughout the execution of the program.70

P-8A POSEIDON: BUDGET & FUNDING striking the right balance and developing thoughtful risk mitigation strategies is often the key to a successful weapons program; one that meets or exceeds technical requirements while delivering a product that is on time and within the allocated budget. In the P 8A the government gave the contractor an extra $500 million as a software development “risk mitigation” strategy. The Navy’s decision to mitigate software development on the P 8A was prudent given the history of cost overruns in this area. Each year the Director, Operational Test and Evaluation (DOT&E) publishes a summary of findings on the performance of a number of major weapons programs. The 2012 report shows a Research Development Test and Evaluation (RDT&E) costs increase of $14 billion from 2010-2011.71 The director found, “inadequate attention to reliability during engineering design, and inadequate management focus on best practices for reliability, design, and growth testing.”72 He also highlighted “software reliability, design, and growth testing”73 as common problem areas. Of the 12 percent of systems that failed due to software issues most are largely software intensive systems such as the APG-79 Active Electronically Scanned Array (AESA); F-15 Mission Planning System; and Large Aircraft Infrared Countermeasures (LAIRCM) Phase II. In such cases, “inadequate design margins and system management” make up 76 percent of the root causes for reliability failures in the data. A recent GAO study similarly concluded that overly ambitious programs have a tendency to drive up cost and schedule risk by being rooted in technical uncertainty and insufficient knowledge concerning the required steps to achieve program performance and production standards.74 Conversely, the programs GAO perceived as stable demonstrated a sound understanding of what was needed to develop and produce the proposed systems and included realistic cost and schedule estimates at or prior to Milestone B. When these programs were revisited after Milestone B, the GAO found that the stable programs largely tracked to their initial development funding profiles. The study highlighted the P-8A as one of the programs that had successfully stayed within their original program baseline, thus further validating the wisdom of their $500 million dollar investment in risk reduction. Another example of a program that effectively estimated costs in accordance with GAO’s recommended framework is Raytheon’s Standard Missile 6 (SM-6). The program also received high praise from DOT&E for its ability to quickly address technical issues. In its initial cost estimate, the SM-6 program office insisted on accounting for all related program costs, including field activity costs and the program’s share of department-wide overhead and expenses. The program developed a plan for risk allocation across the entire program, building in margins for each development step. Since the program was built around executable requirements, it included the technical and design knowledge necessary to make accurate cost estimates and establish a realistic funding profile. According to an early program manager, the program office conducted parametric analysis of major missile NATIONAL DEFENSE BUSINESS INSTITUTE

development and concluded the average to get from Milestone B to initial capability was between

nine and 12 years. This analysis formed the baseline from which the program office estimated a realistic SM-6 production schedule. If this type of early systems engineering is not performed, as has often been the case with DoD’s major acquisitions in the past, significant cost increases can occur as the system’s requirements become better understood by the government and contractor.75

71 Director, Operational Test and Evaluation (DOT&E) FY2012 Annual Report, December 2012 72 Ibid. 73 Ibid. 74 United States Government Accountability Office (GAO) March 2007, Report to Congressional Committees, Defense Acquisitions Assessments of Selected Weapon Programs. GAO 07-406SP 75 Ibid.

P-8A POSEIDON: BUDGET & FUNDING Program managers face hard decisions when proposing and defending budgets for their programs. However, no PM has complete control over their program budget. In collaboration with their leadership they must determine how much risk to take and where. The Navy funded the P 8A program sufficiently to cover the higher independent cost estimate. This decision paid off and demonstrates that the government cannot rely solely on the often aggressive bids submitted by industry in competition.

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APPENDIX 2 : GLOBAL HAWK CASE STUDY TEACHING MODULES TEACHING NOTES

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GLOBAL HAWK: THERE IS A PONY IN THERE SOMEWHERE Monday, June 13, 2011 On a particularly steamy day in June 2011 during one of Washington D.C.’s hottest summers on record, Dr. Ashton Carter, Under Secretary of Defense for Acquisition, Technology, and Logistics (USD[AT&L]) set aside the charts for the upcoming Defense Acquisition Board (DAB) to sip the ice water his secretary had just refilled. The air-conditioning may have been keeping his Pentagon office cool, but it would be of little help against the kind of heat Dr. Carter faced over the Global Hawk program. Scrutiny of the program had only intensified in the year since the Senate Armed Services Committee had grilled him on the program’s ballooning costs and sparked questions about its continued viability. At the time, Dr. Carter had repeatedly defended Global Hawk, contending that, costs aside, it was essential to the United States’ national security. That was then. Now, calls for extreme budget cuts echoed daily from Capitol Hill across the Potomac. Meanwhile, Global Hawk’s cost growth had again breached the Nunn-McCurdy threshold for Average Procurement Unit Cost (APUC) growth, prompting debate over the program’s continuation.1 That determination was now Carter’s to make, and he would make it at the DAB scheduled for that afternoon. As Dr. Carter reviewed the read-ahead package, he pondered the significance and history of Global Hawk, which had been an operational success in combat support missions early in the decade, leading the way for the Pentagon’s strategic shift toward unmanned aerial combat. Touted by the Air Force as the successor to the Cold War-era manned Lockheed U-2, the Global Hawk had been designed as an unmanned high-altitude in-combat surveillance and reconnaissance support vehicle. In 2001, the Global Hawk Program had been awarded the Robert J. Collier Trophy for “designing, building, testing, and operating…the first fully autonomous, operationally demonstrated, and most capable surveillance and reconnaissance unmanned aerial vehicle in the world.” Since 2001 Global Hawk had been deployed to both Afghanistan and Iraq to provide persistent broad area reconnaissance and surveillance. During Operation Enduring Freedom alone, Global Hawk provided the Air Force and joint war-fighting commanders more than 17,000 near-real-time, high-resolution intelligence, surveillance and reconnaissance images, flying more than 60 combat missions and logging more than 1,200 combat hours.2 It was not lost on Carter that the operational performance of the unmanned Global Hawk system had been a success while the performance of the Global Hawk acquisition program - far from unmanned - was something else entirely. What had gone wrong, besides everything? Carter’s glass of ice water was already at the half-empty mark. In better days, he thought wryly, he might have been more willing to consider it half-full.

In 1994, the Global Hawk, originally called the Tier II+ High Altitude Endurance Unmanned Aerial Vehicle (HAE UAV) program, began as an Advanced Concept Technology Demonstration (ACTD) program managed by the Defense Advanced Research Projects Agency (DARPA) Program Office. At program inception, DARPA and the Department of Defense (DoD) developed a radical new acquisition plan that treated cost as the only design requirement. Before contract award, the Deputy Under Secretary of Defense, Advanced Technology (DUSD/AT) imposed a $10 million (FY94 dollars) Unit Flyaway Price 1 2

The APUC increased 14.0 percent and the APUC increased 22.8 percent to the then-current APB. Christopher Drew, “Costly Drone is Poised to Replace U-2 Spy Plane,” The New York Times (August 2, 2011); Steven J. Zaloga, “UAVs Gaining Credibility” Aviation Week and Space Technology (January 12, 1998); Josh McBee “Unmanned Aerial Vehicle Manufacturing in the United States” (New York: IBISWorld Industry Report, June 2012), 3-11. HALE Program Overview, History and Accomplishments, Northrop Grumman Website, www.northropgrumman.com/ unmanned/globalhawk/overview.html.

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RADICAL ACQUISITION STRATEGY: UNIT FLYAWAY PRICE AS SOLE DESIGN REQUIREMENT

GLOBAL HAWK: CASE STUDY (UFP) cap on the first few production aircraft. This UFP was to be the total price – including profit – paid by the government, and was to include all flight hardware including airframe, avionics, sensors, communications, integration and checkout.3 An attempt to improve on the record of failed cost-control measures, this strategy represented a major departure from the typical acquisition management approach, in which system performance is the most significant criterion of a program’s success. This was especially the case for traditional DARPA programs, which tended to emphasize ambitious performance requirements that created challenges for controlling cost. In the case of the Tier II+ HAE UAV program, however, the desired performance characteristics were not mandated. As made clear in the April 1994 Phase I solicitation, all performance characteristics were subject to be traded against the UFP requirement. This was DARPA’s way of designing a program that would have a relatively low risk of cost growth.4 Under this acquisition strategy, the contractor was to attempt to meet as many as possible of the other performance goals, so long as the mandated price limit was met. The end user would then receive the biggest bang for the 10 million bucks. To this end, DARPA even tried to avoid outwardly playing favorites with specific performance goals.5 The April 1994 Phase I solicitation gave the contractor total control and responsibility in determining the balance of the desired performance goals defined in the Systems Capability Document, freeing the DARPA Program Office from closely tracking the contractor’s progress against a multitude of performance requirements. Moreover, the DARPA Program Office was purposely sized to be a small organization in order to minimize government oversight and provide greater autonomy to the contractors. Five teams were awarded Phase I study contracts in October 1994: Loral Systems with Frontier Systems, Northrop Grumman Aerospace with Westinghouse Electric, Orbital Sciences with Westinghouse Electric, Raytheon Missile Systems with Lockheed Advanced Development, and Teledyne Ryan Aeronautical (TRA) with E-Systems. For Phase II, DARPA planned to down-select to one contractor to build two air vehicles and one ground control system. Phase II Proposals from these five teams were subjected to evaluation factors in four areas: System Capability, Technical Approach, Management Approach and Financial Approach. Judging TRA’s approach to be relatively low-risk, DARPA selected the firm for the Phase II contract in May 1995. TRA was a relatively small aeronautical company with a history rich in UAVs, starting with target drones and then progressing into missiles.

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TRA was contracted to build two air vehicles and one ground control segment, with technical performance to be tested for consistency with the $10 million UFP. Although TRA used the technical objectives as internal design parameters, the government’s sole contractual requirement remained the $10 million UFP.6

OUTCOME OF UFP-AS-SOLE-RESTRICTION STRATEGY The UFP restriction saw mixed results. It was highly successful at warding off additional requirements from outside, increasingly interested parties. Whenever an organization requested that the program office impose some new capability requirement, the program office invoked the UFP, successfully controlling requirements creep. 7 3 4 5 6 7

Geoffrey Sommer, Giles K. Smith, John L. Birkler and James R. Chiesa. The Global Hawk Unmanned Aerial Vehicle Acquisition Process: A Summary of Phase I Experience, (Santa Monica: RAND Corporation, 1997), 18. Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 19-20. Sommer et al., The Global Hawk Unmanned Aerial Vehicle Acquisition Process, 4; Kinzig, Global Hawk Systems Engineering Case Study, 19. Kinzig, Global Hawk Systems Engineering Case Study, 22. Drezner and Leonard, Innovative Development, 38.

GLOBAL HAWK: CASE STUDY The UFP restriction also served to place continuous pressure on the contractor to control costs. Despite a widespread understanding that the UFP would not actually be attainable, the fact that the failure to meet the UFP - the program’s only firm requirement - could lead to program cancellation instilled a cost consciousness within TRA that might not otherwise have prevailed.8 However, the government was ultimately unwilling to allow the contractor to retain total control and responsibility for trading performance goals in order to meet the UFP requirement, thus undermining the cost control philosophy defined at program initiation.9 In the early stages of the program, DARPA failed to give TRA the freedom to practice what was being preached, withholding from TRA the proper degree of design control necessary to meet the UFP requirement. Indeed, the contractor stated that the government had to be “periodically reminded” that TRA was supposed to be in charge. To make matters worse, there was an ongoing dispute between TRA and the DARPA program office concerning the capability required to provide military utility, a concept plagued by definitional ambiguity at the time. Asked what was meant by military utility, a visiting general officer told TRA, "Don't ask me to define it—I'll know it when I see it.” 10 The largest disagreement at the time was over the need for the Electro-Optical/Infrared (EO/IR) suite onboard the air vehicle. TRA maintained that this payload should be omitted in order to meet the UFP, believing that the Global Hawk would be acceptable with only the Synthetic Aperture Radar (SAR). This was met with steadfast opposition from the DARPA program office, however, which resisted dropping the EO/IR payload, seemingly leaving TRA no choice but to keep the EO/IR at the expense of the UFP requirement.11 Whereas the contractor was expected to take the UFP requirement seriously, the government failed to do the same. One DARPA official admitted to RAND that very early on, the willingness to trade performance to lower cost was in question, that the “government's commitment to the UFP above all other concerns was disregarded almost immediately after the program began.” Despite the fact that the UFP was officially the program’s only requirement, the government treated both sensor suite payloads as “requirements;” within the first six months of the program the government violated the acquisition-strategy premise of steadfast commitment to the UFP above all else. At the end of the day, the government was simply not willing to accept diminished capability in order to meet the UFP.12

REASONS FOR IMPOSING UFP Without the analytical basis to support the UFP, why impose a price cap requirement that even the government believed to be unattainable, a requirement that consistently interfered with achieving performance goals the government highly desired? RAND maintained that the $10 million UFP was 8 Ibid. 39 9 Ibid. 40-41. 10 Ibid. 44. 11 Ibid. 44-45. 12 Ibid. 45. 13 Ibid. 40.

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Two reasons might explain the government’s contrarian stance. First, the UFP requirement was not grounded in reality (almost no analytical basis supported the UFP), but was rather a deliberate attempt to meet the customer’s cost expectation as opposed to assessing an actual cost. Second, the UFP was rationalized based on extremely optimistic and unrealistic assumptions that resulted in direct cost increases for both the components of the air vehicles themselves and the management of the manufacturing and engineering organizations of the program.13

GLOBAL HAWK: CASE STUDY selected because it was “judged to be high enough to provide a system with meaningful capability if adhered to, yet at the same time low enough that the Air Force would be willing to pay it. [The] DUSD/ AT believed that the price must be set artificially low or the program would be abandoned even before it began.”14 Not only did the artificially low unit flyaway price manage to keep the program viable, but its continued existence - even long after it was known to be unattainable - also served to build significant interest in the program. Throughout most of DARPA’s management of the program, both the DARPA director and former DUSD/AT believed that if the program could be continued long enough to get one of the systems in the air and providing imagery, the Air Force would begin to be more concerned with the system's potential and less concerned with its price. As it turned out, this is exactly what happened.15 While the UFP served to foster interest in Global Hawk, ultimately helping its transition to an acquisition program, there were other ways in which it was not as successful. Indeed, program office engineers perceived the UFP as shortsighted, contending that the compromises in the air vehicle that TRA was forced to make in order to keep the UFP down actually increased costs in the long run.16 Moreover, by forcing TRA to make performance trades that turned out to prove suboptimal for desired ground-based and airborne capabilities, the UFP worked against the cost control philosophy that was envisioned at program inception by inhibiting investment in basic design solutions that might have been costly in the short term but would have been cost beneficial later.17 MILITARY UTILITY ASSESSMENT Following Global Hawk’s successful first flight, program management responsibility transitioned from DARPA to the Air Force in October 1998, towards the end of Phase II of the ACTD program. In January 1999, the Global Hawk program entered Phase III, which included the build of additional air vehicles and ground control systems in order to collect data necessary for the user to make a Military Utility Assessment (MUA). The United States Joint Forces Command (USJFCOM) conducted the MUA from June 1999 to June 2000. During this period, the Global Hawk system completed 21 sorties that totaled 381 flight hours. Detachment 1 Air Force Operational Test and Evaluation Center (AFOTEC) collected the data and reported directly to USJFCOM.

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The MUA concluded that Global Hawk demonstrated a military utility by flying 32-plus-hour sorties, collecting SAR images, and completing operationally representative missions, such as Roving Sands and Joint Task Force exercises. On the basis of these conclusions, the MUA provided recommendations, the most significant of which included the following:

•

Expeditiously field an operational version of the ACTD system

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Enter the formal acquisition system at Milestone II & concurrent Low Rate Initial Production (LRIP)

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Use spiral development to upgrade capabilities over time 18

Although the system had successfully demonstrated a military utility during Phase III, the program lacked many elements necessary to begin production. Lack of flight, static, fatigue, durability and 14 Jeffrey A. Drezner and Robert S. Leonard, Innovative Development: Global Hawk and DarkStar - Their Advanced Concept Technology Demonstrator Program Experience, (Santa Monica: RAND Corporation, 2002), 41. 15 Ibid. 41. 16 Ibid. 39. 17 Ibid. 71. 18 Ibid.,43

GLOBAL HAWK: CASE STUDY damage tolerance testing data from Phase III resulted in insufficient information to support a production go-ahead. Furthermore, there was no validated system, air vehicle or lower-tiered specifications, a major Air Force requirement for the procurement of future air vehicles. As a result, Congress decided not to pursue production immediately following Phase III.19 Even if the Global Hawk ACTD program did not result in a system that was ready for production, the program was considered an operational success, as it demonstrated the ability to provide long-endurance, all-weather, continuous, near-realtime wide area reconnaissance and surveillance. POST-PHASE III: PREPARING FOR TRANSITION TO MDAP STATUS The Office of Secretary of Defense (OSD) and the Assistant Secretary of the Air Force for Acquisition (SAF/AQ) requested post-Phase III options. The program office developed 10 options in preparation for a July 1999 USD(A&T) program review. At this point, the post-Phase III acquisition strategy was broadly outlined with no specific structure. The decision from the meeting resulted in the approval and authority to define the details of the Engineering Manufacturing Development (EMD) phase, with one year allotted to finalize details and prepare supporting documentation. The post-Phase III plan included a one-year EMD program, in compliance with Congressional direction from the FY99 authorization conference report, which required the Global Hawk program to complete an EMD phase before entering production.20 The Intelligence Program Decision Memorandum 1 was released in August 1999, providing further guidance on the overall Global Hawk acquisition strategy. Specifically, the memorandum required the program to do the following: •

Buy two air vehicles in FY01 in order to protect the industrial base.

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Initiate a one-year EMD program in FY01.

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Initiate production in FY02 at the rate of two air vehicles per year.

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Use spiral development to satisfy the Operational Requirements Document (ORD) and address issues identified in the MUA.21

By September 1999, the program plan included a one-year EMD program leading to production of Block 5 air vehicles, and a follow-on EMD program leading to production of Block 10 air vehicles. To cover this program content, the USD(A&T) proposed a $510 million Fiscal Year Defense Program (FYDP) unbudgeted addition to the Global Hawk program. However, this would have been at the expense of other Air Force programs, to which the Air Force Vice Chief of Staff responded by asking for only an additional $390 million for the Global Hawk program, while promising to accomplish the same program content.22 As will be discussed below, this decrease in funding would haunt the program for years.

•

All requirements had not yet been defined;

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Funding was insufficient to support concurrent EMD and production;

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Production facility constraints remained in terms of ramping up production rates;

19 Ibid.,43-44 20 Ibid. 21 Ibid. 22 Ibid.

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According to an Air Force “Early Strategies and Issues Session Briefing” dated March 2000, the following program risks still remained:

GLOBAL HAWK: CASE STUDY •

Insufficient funding was programmed beyond the first spiral;

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Technical training and data may not be complete by Initial Operational Test and Evaluation (IOT&E);

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Potential unavailability of parts due to vanishing vendors; and

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Systems available for IOT&E might not be production representative.23

EMD AND LRIP A favorable Milestone II decision to enter EMD was rendered in February 2001. The Aeronautical Systems Center (ASC) at Wright Patterson Air Force Base (WPAFB) subsequently awarded Northrop Grumman (which had recently acquired TRA) EMD contract in March 2001. Instead of a system specification, the contract included a four-page draft System Requirements Document (SRD). Though the SRD did not contain the normal level of detail associated with a system specification, the program’s approach was to define the configuration baseline requirements at the conclusion of EMD, giving Northrop Grumman greater latitude in its design approach.24 Three months after EMD contract award, in June 2001, Northrop Grumman was awarded a contract for LRIP of two air vehicles (P1 and P2, now designated RQ 4A) and one Mission Control Element (MCE), with a completion date set for December 2003. The concurrent EMD and production contracts’ total cost was $5.4 billion, with a planned purchase of 63 total aircraft. This established concurrency between EMD and production.25 A TRANSFORMATIONAL SYSTEM IN WARTIME During execution of the EMD and LRIP contracts, the terrorist attacks of September 11, 2001 occurred. Subsequent operations in Afghanistan propelled Global Hawk into combat support missions. It performed well and received high praise from users and Air Combat Command (ACC). Successful operations and urgency for sustained support in the Middle East drove the need for the DoD to consider bolstering the aircraft’s capabilities and performance.

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Consequently, a restructure was launched to develop a larger airframe that would accommodate an increased sensor suite. A General Officer Steering Group (GOSG) recommended developing a larger aircraft in order to increase the payload from 2,000 to 3,000 pounds. Later that same year, DoD and General Jumper, then Chief of Staff, Headquarters (HAF) Air Force, designated the Global Hawk as a Transformational System, meaning that its capabilities were so revolutionary that it would be “fast tracked” into production. Additionally, new capabilities would be “spiraled in” at an accelerated rate. A one-page list of requirements was quickly established to guide development of the new RQ-4B.26

In March 2002 the Air Force’s program management team began Global Hawk’s replan. Under the new plan, the already concurrent Global Hawk schedule was further compressed for a larger and more advanced RQ-4B airframe. The total Global Hawk purchase was reduced to 51 air vehicles (7 RQ-4A and 44 RQ-4B), 10 ground stations, and upgraded intelligence sensors, radar, and other support technologies. Concurrent with the replan, DoD requested that the Air Force program reduce overall program cost. A Joint Affordability Team (JAT) was formed and advised program management that buying fewer Global Hawks with full multi-intelligence capabilities would reduce the APUC. (Thirty-seven fully multi-intelligence capable and 14 tailored single mission platforms.) Both Air Force acquisition officials 23 ASC/RAV Early Strategies and Issues Session Briefing, March 2000, quoted in AFIT 51 24 Ibid., 53-54 25 Ibid., 55 26 Kinzig, Global Hawk Systems Engineering Case Study, 61.

GLOBAL HAWK: CASE STUDY and Northrop Grumman agreed to this proposal, but the Air Force’s operational community pressed back, arguing that such a reduction in capabilities would not meet critical mission support activities. Then USD(AT&L), E.C. (Pete) Aldridge, responded to criticism of Global Hawk’s price tag. “It's expensive because we're not buying very many of them. And it doesn't have the reliability we like because we didn't design it to have all the redundancy you would have in an operational system. If we get to a point downstream, which we plan to do, to increase the [production] rate, we will get the price down, and we will operationalize it; we will put the redundancy in it and so forth, so we hope to get the reliability back up.” 27 In December 2002, the operational community conceded to accommodate the cost savings initiative outlined by the JAT. The acquisition shifted from all multi-mission capabilities to a combination of multi-mission and single-mission Global Hawks. The RQ 4A would remain an Imagery Intelligence (IMINT) only aerial vehicle, while the RQ 4B would contain both IMINT and Signals Intelligence (SIGNIT) capabilities. And, in response to growing pressure for Global Hawk’s rapid deployment in the Middle East, the program increased the concurrency of development and production efforts. 28 In March 2003 the program office implemented a major program restructure with the following effects. The RQ-4B Global Hawk fuselage was made larger, and equipment was rearranged, so the air vehicle could carry six of the seven Airborne Signals Intelligence Payload (ASIP) avionics boxes that the U-2 can carry. To offset the loss in stability and control from the increased fuselage volume, vertical fin size was increased. To retain air vehicle performance, additional fuel was added, and the span of the wing was increased. To improve laminar flow over the wing, manufacturing processes were modified to maintain tighter tolerances on curvature of the airfoil. The commercial off-the-shelf (COTS) engine was upgraded with improved turbine materials to provide more thrust and a longer duty cycle before teardown and refurbishment. The intended performance gains were not fully realized, and aircraft performance suffered. Maximum altitude was reduced from 65,000 feet to 60,000 feet, but endurance remained at about 30 hours, which was comparable to the initial LRIP aircraft RQ 4A. (Please see Exhibit 1 illustrating the key differences between the RQ-4A and RQ-4B.)29 Due to system upgrades the development period was lengthened from seven to 12 years, while the total procurement schedule was condensed into 11 years, rather than the 20 years outlined in the March 2002 plan. The accelerated schedule resulted in increased low rate production quantities and highly concurrent development and production cycles. In addition the highly compressed production schedule dramatically increased the year-to-year funding needs. (See Exhibit 2)

27 28 29 30

Robert Wall, “USAF Stalls Global Hawk Cost Reduction Efforts,” Aviation Week and Space Technology (August 19, 2002), 33; Flughum, “Global Hawk Sigint Faces Uncertain Future,” Aviation Week and Space Technology, (January 14, 2002), 406-407. Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 61-62. Ibid., 64-65; Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks, (Washington: GAO, November 2004), 6-7; Eric Schmitt, “A Nation at War: Military Air Craft; In the Skies Over Iraq, Silent Observers Become Futuristic Weapons,” The New York Times (April 18, 2003). Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks, (Washington: GAO, November 2004), 2-4.

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The restructure was intended to provide enhanced capabilities in a time of escalated combat operations. However, the new acquisition strategy did not follow DoD’s traditional knowledge-based acquisition approach, and within one year of the restructure, the GAO warned that changes needed to be made to reduce program risk. GAO warned that the highly concurrent production and development strategy drastically reduced the ability to gain in-depth product knowledge. They also concluded that the addition of new capabilities, while potentially useful to the warfighter, necessitated a completely different business plan from the original RQ-4A. At the time of restructure in March 2003, the Air Force pressed forward with an acquisition strategy out of sync with the realities of the program. The urgency for Global Hawk’s demonstrated in-combat surveillance support drove the Air Force to move forward.30

GLOBAL HAWK: CASE STUDY NUNN-MCCURDY BREACH Due primarily to the heightened technical risk, Global Hawk’s program costs increased rapidly. In April 2005 the Air Force reported to Congress a breach in procurement costs.31 The breach notification letter referenced the 2003 restructure as the primary source of fueling the overrun.32 The program office listed the following factors as contributing to the cost breach.33 •

Concurrency of production and development

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Underestimation of technical issues associated with the RQ-4B upgrade

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Increased sensor cost

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Increased support requirements and initial spares

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Increased government costs for acceptance tests, design changes and mission support

At that time the GAO noted that: “Program officials told us that they originally expected substantial commonality between the A and B models but, as designs were finalized and production started, it was apparent that the B model was more different, more complex, and more costly than anticipated.”34

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The concurrent production of RQ-4A and development of RQ-4B increased risk, and within two years of the 2003 restructure, the program’s total cost estimate increased by nearly $900 million from the March 2001 original plan. In part, this increase was triggered by the compression of the program’s schedule, necessitating an influx of resources for development of new RQ-4B designs. This increase resulted in the Air Force investing in nearly half of the total purchase of upgraded RQ-4Bs before a production model was fully tested and proven capable of meeting requirements. Another factor for the cost increases were delays in key program events after the restructure. For instance, the commencement of operational assessments for the RQ-4As was delayed approximately one year, and the subsequent operational testing for RQ-4B slipped two years. Between 2002 and 2004, the program also experienced multiple design changes. Only about 20% of the RQ-4A drawings were applicable to the redesigned RQ-4B, as opposed to the 80% originally projected. Nearly 50% of these drawings were considered significant design changes and contributed to a $209 million overrun in the development contract. Finally, unforeseen manufacturing issues delayed production and increased procurement costs. Issues included inadequate parts produced by subcontractors for the RQ-4B wing and tail. (See Exhibit 3 for the production and development schedule.)35

Program management was under immense pressure to remain within the estimated baseline unit cost. Several initiatives were launched to identify and implement process improvements for scheduling, testing, and production.36 Repeated program changes, however, hampered the effectiveness of these measures. Also at that time the Permanent Select Committee on Intelligence expressed concerns that “there is now an effort to flood the Global Hawk program with money; there are ad hoc plans for rapid, major upgrades before requirements have been established, and no sign of serious examination of where 31 The Air Force cited in its letter to Congress an 18% cost breach over baseline, primarily the result of increasing aircraft capacity to accommodate requirements for a more sophisticated, integrated imagery and signals intelligence sensor suite. 32 Unmanned Aircraft Systems: New DoD Programs Can Learn from Past Efforts to Craft Better and Less Risky Acquisition Strategies, (Washington: GAO, March 2006), 2-5. 33 For more on issues leading to breach see Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 73-75. 34 Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks, (Washington: GAO, November 2004), 3. 35 Ibid. 7-15; Amy Butler, “Spiraling Cost Plans to Stretch Global Hawk Fall Prey to Development Overrun,” Aviation Week and Space Technology, (April 4, 2005), 27. 36 David Riel, “Global Hawk Lean Now Initiative Presentation,” Lean Aerospace Initiative Plenary Conference (March 26, 2003), http://lean.mit.edu/downloads/cat_view/99-presentations/83-lai-annual-conferences/128-2003-plenary-conference?start=25, accessed 20 February 2013.

GLOBAL HAWK: CASE STUDY and how Global Hawk fits into an overall collection architecture.” This observation suggested that factors beyond the control of the program office were steering the direction of Global Hawk’s acquisition.37 The cumulative impact of the restructure propelled Global Hawk’s development cost estimates more than doubled from $906.2 million in March 2001 to nearly $2.6 billion by March 2004. The concurrent production and development plan necessitated a condensed funding profile to ensure technologies could be matured by the production of the first six RQ-4Bs, which began in autumn 2004. However, the unforeseen testing and manufacturing issues did not keep pace with the production schedule, resulting in an overall program schedule slip. From the program’s original March 2001 baseline, the program acquisition unit cost increased almost 44 percent to $123.2 million. (See Exhibit 4 detailing Global Hawks Cost, Quantity and Unit Cost)38 After the April 2005 Nunn-McCurdy cost breach, a full program review was conducted. Despite the cost overruns, most military and civilian officials defended Global Hawk and the DoD stated that the capabilities are “essential to our nation.”39 The Defense Science Board suggested that program management adopt a "more agile strategy with a goal to provide needed capability to the war fighter as soon as possible, consistent with an appropriate level of demonstrated system performance.”40 Ken Krieg, then USD(AT&L) told lawmakers in June 2006 that the acquisition program would “be limited to no more than five low-rate initial production aircraft per year, until Block 20/30 initial operational test and evaluation is successfully accomplished.” Additionally, Krieg cited a revised acquisition plan, which would be approved the following year. It requested $240 million in research and development funds to support research and testing for the RQ-4B radar and sensor suite and airframe. The timeline for resolving technical issues remained unclear, but the Air Force stipulated that successful testing was the single determining factor in how many units it would purchase annually. This restructure was intended to control cost growth and allow the Air Force to adequately test each system before moving on to more advanced versions.41 The $240 million requested for research and testing, however, did not raise the program’s performance. By summer 2010 Global Hawk was again under scrutiny. Selected as a pilot program for the DoD’s “Will-Cost and Should-Cost Management” initiative, the acquisition program’s persistent cost growth startled many in the Pentagon.42 In a rare public criticism at the Farnborough Air Show, Dr. Carter expressed “concerns about cost growth and performance in the Global Hawk. 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." Northrop Grumman officials cautiously dismissed Carter’s claim. Addressing industry media from the air show’s midway, one executive opined that “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.” Though likely annoyed by the number of stakeholders in the project, the executive did concede the company was exploring ways to reduce the overall program cost.43

37 Elizabeth Bone and Christopher “Report to Congress: Unmanned Aerial Vehicles: Background and Issue for Congress,” LOC Order Code RL31872, 25 April 2003, 35-36. 38 Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks, (Washington: GAO, November 2004), 9-13; “Global Hawk: Root Cause Analysis of Projected Unit Cost Growth,” (Alexandria: Institute for Defense Analysis, March 2011), 4-10. 39 Michael Sirak, “Air Force Still Determining Schedule for Global Hawk Under Restructure,” Defense Daily (June 16, 2006). 40 “Defense Acquisition Board Approves Plan for Global Hawk Program” Inside the Air Force (November 25, 2005). 41 “Acquisition Czar Approves Plan to Limit Future Global Hawk Buys,” Inside the Air Force (June 9, 2006). 42 Memorandum: Will-Cost and Should-Cost Management (Washington, Department of the Air Force, June 15, 2011). 43 Maria Malenic, “Pentagon Questions Global Hawk Cost as Contractor Defends Program,” Defense Daily (July 20, 2010).

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Under this effort toward cost savings, Northrop Grumman launched a series of “afford-ability initiatives.” George Guerra, vice president and program manager for Northrop Grumman’s High Altitude, Long Endurance programs contended that, "we're working to identify what the return from various

GLOBAL HAWK: CASE STUDY cost-saving measures would be. We're looking at combined procurement approaches--the idea that you would combine some [production] lots in order to gain efficiencies.” 44 THE DECISION Northrop’s cost reduction efforts were not enough to prevent the Global Hawk program from breaching the Nunn-McCurdy cost threshold in 2011, for the second time in five years. The Office of Performance Assessments and Root Cause Analysis (PARCA) asked the Institute for Defense Analysis (IDA) to conduct an in-depth review of the program, and IDA delivered its report in May 2011. It was this report that sat before Ashton Carter now, next to the read-ahead charts for the DAB. He thumbed to the page in the report that contained the four primary factors IDA had found to be driving the most cost growth in the program: 45 •

Changes in aircraft mix, resulting in procurement of a higher proportion of RQ-4Bs (Block 30/40 aircraft)

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Upward revision of Acquisition Program Baseline (APB) cost estimates for sensor payloads, initial spares, and many “below the line” cost elements

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Belated recognition of baseline program content that was missing from the APB estimate

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Costs incurred to mitigate a lack of adequate test resources

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With a heavy sigh and one last sip of the now room temperature water, Carter stood up from his desk, and began his walk toward room 3D781 for the DAB, wondering just what the program manager could say to convince him that there would not be a third Nunn-McCurdy breach.

44 Maria Malenic, “Contractor Starts Global Hawk Affordability Initiatives,” Defense Daily (August 25, 2010). 45 Global Hawk: Root Cause Analysis of Projected Unit Cost Growth, (Alexandria: Institute for Defense Analysis, March 2011), vi.

GLOBAL HAWK: EXHIBITS EXHIBIT 1

KEY CHARACTERISTICS of GLOBAL HAWK RQ-4A & RQ-4B MODELS

KEY CHARACTERISTICS

RQ-4A

RQ-4B

Payload Capacity

2,000 pounds

3,000 pounds

Take-Off Weight

26,750 pounds

32,250 pounds

Wingspan

116.2 feet

130.9 feet

Fuselage length

44.4 feet

47.6 feet

Endurance

31 hours

33 hours

Average speed at 60,000 feet

340 knots

310 knots

Approximate Range

10,000 nautical miles

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GLOBAL HAWK: EXHIBITS EXHIBIT 2

GLOBAL HAWK: EXHIBITS EXHIBIT 3

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GLOBAL HAWK: EXHIBITS EXHIBIT 4

GLOBAL HAWK: EPILOGUE EPILOGUE Dr. Aston Carter USD(AT&L) made the decision to cut 11 Global Hawk RQ-4Bs from planned production. In the June 2011 Acquisition Decision Memorandum (ADM), Carter outlined additional instructions for restructuring the program. He directed the Air Force to break up the project into subprograms, with distinct acquisition programs for Block 10/20 (baseline), Block 30 (with enhanced Integrated Sensor Suite and Airborne Signals Intelligence Payload) and Block 40 (with Multi-Platform Radar Technology Insertion Program MP-RTIP). Finally, another subprogram would be created for the Ground Segment Re-Architecture and Communications Systems Re-Architecture. Carter reasoned that these subprograms would better accomplish the original intent of spiral development, while focusing efforts on each Block’s unique technical and design specifications. And, despite the cost overruns, Carter defended the Global Hawk: “Continuation of the program is vital to national security. There are no alternatives.”46 By autumn 2011, however, Congress was completing the defense appropriations bill for the coming fiscal year. In an environment of austere budget cuts, DoD was under more pressure than ever to reduce Global Hawk’s price tag. Thus, in January 2012 Dr. Carter announced his decision to terminate Block 30, arguing that it had “priced itself out of [its] niche. That’s the fate of programs that are too expensive.” All Block 30 airframes in the air fleet and production would be terminated under this plan. The cancellation would not have an immediate negative impact on the Block 40 production. Rather, it was seen as an opportunity for the program to mature surveillance and imagery technologies before producing the next lot.47 Leon Panetta, then Secretary of Defense, stated, “when we initially invested in the Global Hawk Block 30 program, it held the promise of providing essentially the same capability as the U-2 manned aircraft for significantly less money to both buy and operate. As the program has matured, these cost savings have not materialized and, at best, we project the future cost of Global Hawk Block 30 operations to be comparable with the U-2. In this five-year budget, the cost of the Global Hawk program would significantly exceed the cost of the U-2 so we canceled Global Hawk Block 30 and extended the U-2 program.”48

46 Amy Butler, “Carter Cuts 11 More Global Hawks, Gives Nunn-McCurdy Nod,” Aerospace Daily and Defense Report (June 16, 2011); “Unspiraled,” Aviation Week and Space Technology (June 20, 2011). 47 Dave Majumadar, “USAF Plans to Terminate Block 30 Global Hawk,” Defense News (January 26, 2012). 48 Ibid. 49 Jen DiMascio, “Lawmakers Skewer Air Force Officials Over Budget Choices,” Aerospace Daily and Defense Report (February 29, 2012); Brian Everstine, “SAF Leaders Defend Global Hawk Cuts at Hearing,” Defense News (March 6, 2012); DiMascio, “House Committee to Probe Global Hawk Decision,” Aerospace Daily and Defense Report (March 7, 2012); Pat Host, “White Paper Says Block 30 Cancellation Based on Questionable Numbers,” Defense Daily (May 1, 2012); Annual Report: Opportunities Exist to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue, (Washington: GAO, February 2012), 27-29.

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Lawmakers found the termination inconsistent with Dr. Carter’s previous announcement to go forward with the Global Hawk program. Referencing a statement Carter made six months earlier calling Global Hawk “vital to national security,” Representative Tom Rooney (R-Florida) asked Air Force Secretary Michael Donley and General Norton Schwartz, Chief of Staff, to explain the reversal. “We’ve got fourteen made, and now we have a decision to park this vehicle in a garage somewhere for God knows how long,” Rooney observed. General Schartz responded that the budget environment had changed since the June 2011 ADM, and cancellation of Block 30 would provide the Air Force with $2.5 billion savings over the next several years. Secretary Donley contended that “there were changes in the joint requirements for high altitude ISR that caused us to revisit how to meet those requirements with both of these platforms. We could get this done with the U-2.”49

GLOBAL HAWK: EPILOGUE Despite the Air Force’s decision to cancel Block 30, the FY2013 House Appropriations Committee provided $278 million to continue production of Block 30. One lawmaker summed up the situation remarking that “something happened to change the [Air Force’s] mind. We think the Air Force was right last year, and we think maybe they haven’t explained why they changed their mind this year.”50 While budget appropriations were in limbo, Northrop Grumman wasted no time finding other potential customers. In May 2012 they announced a $1.2 billion agreement with NATO for the delivery of five Global Hawks in Block 40 configuration, as part of the Alliance Ground Surveillance (AGS) network. At the same time, South Korea and Japan were eyeing Global Hawk as a much need surveillance system over mounting threats in North Korea and China.51 Northrop Grumman received good news several months later when, in September 2012, Congress prevented the Air Force from terminating Block 30 aircraft already in production. Perhaps appealing to many lawmakers’ unwavering support of the program, incoming Air Force Chief of Staff General Mark Welsh reassured Senators that existing Block 30 aircraft would still be used. Additionally, Northrop Grumman would continue under separate contracts to upgrade the Block 30s with planned SIGINT capability.52

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Almost immediately after Congress saved Block 30, the FY 2014 Presidential Budget placed Global Hawk back on the chopping block. In February 2013, Air Force leaders began early negotiations and proposed complete cancellation of Block 40, essentially closing the book on Northrop Grumman’s Global Hawk franchise. While deliberations continue in the political arena, the program office plans to carry out an Operational Utility Evaluation (OUE) of its MP-RTIP system, as mandated by Deputy Secretary of Defense Aston Carter. An inside source commented that talk of Block 40 termination has been rampant in the Pentagon and gave the program a “50/50” chance of survival under current budget limitations.53

50 51 52 53

DiMascio, “Dicks Calls Approps Bill Slap on Air Force Wrist,” Aerospace Daily and Defense Report (May 9, 2012); Eric Beidel, “U-2, Global Hawk Advocates Square Off in Budget Battle,” National Defense (May 2012). “NATO Inks $1.7 Billion Global Hawk Order,” Flight International (May 29, 2012); “Government Eyeing Purchase of U.S. Spy Drones; Global Hawks Would Cover China, North Korea,” The Daily Yomiuri (January 1, 2013). Sydney J. Freeberg, “Air Force Gives Block 30 Global Hawk Another Year,” AOL Defense (September 17, 2012). http://defense.aol.com/2012/09/17/air-force-gives-block-30-global-hawk-another-year-breaking/ (Accessed: 13 March 2013) Butler, “USAF Proposes Scrapping Global Hawk Block 40,” Aerospace Daily and Defense Report (February 20, 2013).

GLOBAL HAWK: WORKS CITED/CONSULTED Industry Studies and Government Reports: Bone, Elizabeth and Christopher Bolkcom, Report to Congress: Unmanned Aerial Vehicles: Background and Issue for Congress, (April 25, 2003), LOC Order Code RL31872. Drezner, Jeffrey A. and Robert S. Leonard, Innovative Development: Global Hawk and DarkStar Flight Test in the HAE UAV ACTD Program, RAND Corporation, Santa Monica (2002). Drezner, Jeffrey A. and Robert S. Leonard, Innovative Development: Global Hawk and DarkStar - Their Advanced Concept Technology Demonstrator Program Experience, RAND Corporation, Santa Monica (2002). Jobo, Ronald S., Applying the Lessons of “Lean Now” to Transform the US Aerospace Enterprise: A Study Guide for Government Lean Transformation, Center for Technology, Policy, and Industrial Development at Massachusetts Institute of Technology, Cambridge (2003). Kinzig, Bill, Global Hawk Systems Engineering Case Study, Air Force Center for Systems Engineering, Wright-Patterson AFB (2010). McBee, Josh, Unmanned Aerial Vehicle Manufacturing in the United States, IBISWorld Industry Report, New York (June 2012). Riel, David, Global Hawk Lean Now Initiative Presentation, Lean Aerospace Initiative Plenary Conference (March 26, 2003), http://lean.mit.edu/downloads/cat_view/99-presentations/83-lai-annual-conferences/128-2003-plenary-conference?start=25 (February 20, 2013). Sommer, Geoffrey, Giles K. Smith, John L. Birkler and James R. Chiesa, The Global Hawk Unmanned Aerial Vehicle Acquisition Process: A Summary of Phase I Experience, RAND Corporation, Santa Monica (1997). Institute for Defense Analysis (IDA) March 2011, Global Hawk: Root Cause Analysis of Projected Unit Cost Growth. United States Government Accountability Office (GAO) November 2004, Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks. United States Government Accountability Office (GAO) March 2006, Unmanned Aircraft Systems: New DoD Programs Can Learn from Past Efforts to Craft Better and Less Risky Acquisition Strategies.

United States Government Accountability Office (GAO) February 2012, Annual Report: Opportunities to Reduce Duplication, Overlap and Fragmentation, Achieve Savings, and Enhance Revenue.

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United States Government Accountability Office (GAO) July 2009, Defense Acquisitions: Opportunities Exist to Achieve Great Commonality and Efficiencies Among Unmanned Aircraft Systems.

GLOBAL HAWK: WORKS CITED/CONSULTED Periodicals (Chronological): Steven J. Zaloga, “UAVs Gaining Credibility” Aviation Week and Space Technology (January 12, 1998). Robert Wall, “USAF Maps Out Future of Global Hawk UAV,” Aviation Week and Space Technology (July 12, 1999). David A. Fulghum and Robert Wall, “New Missions, Designs Eyed for Global Hawk,” Aviation Week and Space Technology (November 20, 2000). David A. Flughum, “Global Hawk Sigint Faces Uncertain Future,” Aviation Week and Space Technology, (January 14, 2002). Robert Wall, “USAF Stalls Global Hawk Cost Reduction Efforts,” Aviation Week and Space Technology (August 19, 2002). Eric Schmitt, “In the Skies Over Iraq, Silent Observers Become Futuristic Weapons,” The New York Times (April 18, 2003). Amy Butler, “Spiraling Cost; Plans to Stretch Global Hawk Fall Prey to Development Overrun,” Aviation Week and Space Technology (April 4, 2005). “Defense Acquisition Board Approves Plan for Global Hawk Program,” Inside the Air Force (November 25, 2005). Michael Sirak, “Air Force Still Determining Schedule for Global Hawk Under Restructure,” Defense Daily (June 16, 2006). “Air Force, Navy Sign MoA to Streamline Global Hawk Acquisition Process,” Defense Daily (September 17, 2008). “$302.9 Million to Northrop Grumman for 5 USAF RQ-4 Global Hawks,” Defense Industry Daily (November 22, 2009). “War of Words Rages Over Global Hawk,” Flight International (June 29, 2010).

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Marina Malenic, “Pentagon Questions Global Hawk Cost as Contractor Defends Program,” Defense Daily (July 20, 2010).

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Emilie Rutherford, “Carter Emphasizes Global Hawk Cost Concerns to Congress,” Defense Daily (September 29, 2010). Amy Butler, “USAF Declares Second Major Global Hawk Cost Breach,” Aerospace Daily and Defense Report (April 13, 2011). Amy Butler, “Global Hawk Fixes Under Way,” Aerospace Daily and Defense Report (June 10, 2011). Amy Butler, “Carter Cuts 11 More Global Hawks, Gives Nunn-McCurdy Nod,” Aerospace Daily and Defense Report (June 16, 2011).

GLOBAL HAWK: WORKS CITED/CONSULTED Amy Butler, “Unspiraled,” Aviation Week and Space Technology (June 20, 2011). Gordon R. England, “The Pentagon’s Financial Drawdown,” The New York Times (July 14, 2011). Christopher Drew, “Costly Drone is Poised to Replace U-2 Spy Plane,” The New York Times (August 2, 2011). Elisabeth Bumiller, “Panetta Pleads for No More Cuts in Defense Spending,” The New York Times (August 4, 2011). Dave Majumadar, “USAF Plans to Terminate Block 30 Global Hawks,” Defense News (January 26, 2012). Jen DiMascio, “Lawmakers Skewer Air Force Officials Over Budget Choices,” Aerospace Daily and Defense Report (February 29, 2012). Sandra I. Erwin and Dan Parsons, “Experts See No Logic in Air Force Mothballing New Global Hawks,” National Defense (March 2012). Brian Everstine, “SAF Leaders Defend Global Hawk Cuts at Hearing,” Defense News (March 6, 2012). Jen DiMascio, “House Committee to Probe Global Hawk Decision,” Aerospace Daily and Defense Report (March 7, 2012). Eric Beidel, “U-2, Global Hawk Advocates Square Off in Budget Battle,” National Defense (May 2012). Pat Host, “White Paper Says Block 30 Cancellation Based on Questionable Numbers,” Defense Daily (May 1, 2012). Jen DiMascio, “Dicks Calls Approps Bill Slap on Air Force Wrist,” Aerospace Daily and Defense Report (May 9, 2012). “NATO Inks $1.7 Billion Global Hawk Order,” Flight International (May 29, 2012). Sydney J. Freeberg, “Air Force Gives Block 30 Global Hawk Another Year,” AOL Defense (September 17, 2012). “Government Eyeing Purchase of U.S. Spy Drones; Global Hawks Would Cover China, North Korea,” The Daily Yomiuri (January 1, 2013). NATIONAL DEFENSE BUSINESS INSTITUTE

Amy Butler, “USAF Proposes Scrapping Global Hawk Block 40,” Aerospace Daily and Defense Report (February 20, 2013).

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GLOBAL HAWK: ACRONYMS ACTD Advanced Concept Technology Demonstration

ORD Operational Requirements Document

AFC2 & ISR Air Force Command & Intelligence,

PARCA Performance Assessments and Root Cause Analyses

Surveillance, and Reconnaissance AFOTEC Air Force Operational Test and Evaluation Center

SAF/AQ Secretary of the Air Force for Acquisition

ASC Aeronautical Systems Center

SAMP Single Acquisition Management Plan

ASIP Airborne Signals Intelligence Payload

SAR Selected Acquisition Report

CCDR Contractor Cost Data Report

SCD Systems Capability Document

CFSR Contract Funds Status Report

SEMP Systems Engineering Master Plan

COTS Commercial Off-the-Shelf

SIGINT Signals Intelligence

CPR Contractor Performance Report

SPS System Performance Specification

DAB Defense Acquisition Board

SRD Systems Requirement Document

DARPA Defense Advanced Research Projects Agency

TEMP Test and Evaluation Master Plan

DoD Department of Defense

UAV Unmanned Aerial Vehicle

DUSD/AT Deputy Undersecretary of Defense for

UFP Unit Flyaway Price

Acquisition and Technology

USD/A&T Undersecretary of Defense for Acquisition and Technology

EO/IR Electro-Optical/Infrared FAR Federal Acquisition Regulation FYDP Fiscal Year Defense Program GAO Government Accountability Office GOSG General Officer Steering Group HAE High Altitude Endurance HQ Headquarters IDA Institute for Defense Analyses IMINT Image Intelligence IMP Integrated Master Plan IMS Integrated Master Schedule NATIONAL DEFENSE BUSINESS INSTITUTE

PM Program Manager

APB Acquisition Program Baseline

EMD Engineering and Manufacturing Development

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OSD Office of the Secretary of Defense

IOT&E Initial Operation Test and Evaluation ISR Intelligence, Surveillance, and Reconnaissance JAT Joint Affordability Team LRIP Low Rate Initial Production MCE Mission Control Element MDAP Major Defense Acquisition Program MUA Military Utility Assessment

TRA Technology Readiness Assessment

USD (AT&L) Undersecretary of Defense for Acquisition, Technology and Logistics USJFCOM United States Joint Forces Command

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GLOBAL HAWK TEACHING MODULES

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NDBI Major Defense Acquisition Programs Lessons Learned Case Study in Collaboration with UT/CEE

GLOBAL HAWK: TEACHING MODULES

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The following teaching modules are focused on Major Defense Acquisition Programs (MDAPs) and divided into four distinct sections: requirements, design and production, program management, and budget and funding. These teaching modules are designed to place a class participant at a certain point in time in the Global Hawk programâ&#x20AC;&#x2122;s history. At that point in time the participant must decide what action he/she will take next based on program information and class room discussions. The modules and associated teaching notes are designed to promote critical decision making with an emphasis on learning from past mistakes to keep those mistakes from being repeated in future MDAPs. â&#x20AC;&#x192;

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GLOBAL HAWK: REQUIREMENTS Issue 1: Catching The Pitch From Another Agency For the Advanced Concept Technology Demonstration (ACTD) phase of the Tier II+ High Altitude Endurance Unmanned Aerial Vehicle (HAE UAV) program, later known as Global Hawk, the Defense Advanced Research Projects Agency (DARPA) Program Office and the Department of Defense (DoD) developed a radical new acquisition strategy that treated cost as the only design requirement. Before contract award, the Deputy Under Secretary of Defense, Advanced Technology (DUSD/AT) imposed a $10 million (FY94 dollars) Unit Flyaway Price (UFP) cap on the first few production aircraft. This UFP, defined to include all flight hardware including airframe, avionics, sensors, communications, integration, and checkout, was to be the total price - including profit - paid by the government.54 An attempt to improve on the record of failed cost control measures, this strategy represented a major departure from the typical acquisition management approach, in which system performance is the most significant criterion of a program’s success. This was especially the case for traditional DARPA programs, which tended to emphasize ambitious performance requirements that create challenges for controlling cost. In the case of the Tier II+HAE UAV program, however, the desired performance characteristics were not mandated. As made clear in the April 1994 Phase I solicitation, all performance characteristics were subject to be traded against the UFP requirement. This was DARPA’s way of designing a program that would have a relatively low risk of cost growth.55 Much later, in 2002, RAND conducted an assessment of the program and deduced that DARPA believed even early in the program that the complete set of all performance objectives could probably not be met within the $10 million constraint. In fact, RAND speculated that the UFP was “judged to be high enough to provide a system with meaningful capability if adhered to, yet at the same time low enough that the Air Force would be willing to pay for it. [The] DUSD/AT believed that the price must be set artificially low or the program would be abandoned even before it began.”56 Nonetheless, the contractor was to attempt to meet as many as possible of the other performance goals, so long as the mandated price limit was met. This way, the end user would receive the biggest bang for the 10 million bucks. To this end, DARPA even tried to avoid outwardly playing favorites with specific performance goals.57 The DARPA Program Office defined the desired performance characteristics in terms of a range of acceptable values, either as “Primary Objective,” “Objective,” or “Desired.” The most significant of these objectives specified the capability to cruise to a target area 1,000 miles distant, loiter for 24 hours at an altitude of about 65,000 ft, and then return to the take-off point. The Program Office further defined a mission equipment package consisting of a Synthetic Aperture Radar (SAR) and/or an Electro-optic/Infrared (EO/IR) sensor, a data recorder subsystem, a threat warning receiver subsystem, and an airborne data link subsystem.58

54 55 56 57 58

Geoffrey Sommer, Giles K. Smith, John L. Birkler and James R. Chiesa. The Global Hawk Unmanned Aerial Vehicle Acquisition Process: A Summary of Phase I Experience, (Santa Monica: RAND Corporation, 1997), 18. Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 19-20. Jeffrey A. Drezner and Robert S. Leonard, Innovative Development: Global Hawk and DarkStar - Their Advanced Concept Technology Demonstrator Program Experience, (Santa Monica: RAND Corporation, 2002), 41. Sommer et al., The Global Hawk Unmanned Aerial Vehicle Acquisition Process, 4; Kinzig, Global Hawk Systems Engineering Case Study, 19. Sommer et al. The Global Hawk Unmanned Aerial Vehicle Acquisition Process, 4.

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The April 1994 Phase I solicitation gave the contractor total control and responsibility in determining the balance of the desired performance goals defined in the Systems Capability Document (SCD), freeing the DARPA Program Office from closely tracking the contractor’s progress against a multitude of performance requirements. Moreover, the DARPA Program Office was purposely sized to be a small organization in order to minimize government oversight and provide greater autonomy to the contractors. While minimizing oversight, the government’s strategy for Phase I was to maximize

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insight into the systems and UFP allocation by requiring a Task Description Document, an Integrated Master Schedule (IMS), and an Integrated Master Plan (IMP).59 These three documents were the output of Phase I. Five teams were awarded Phase I study contracts in October 1994: Loral Systems with Frontier Systems, Northrop Grumman Aerospace with Westinghouse Electric, Orbital Sciences with Westinghouse Electric, Raytheon Missile Systems with Lockheed Advanced Development, and Teledyne Ryan Aeronautical (TRA) with E-Systems. For Phase II, DARPA planned to down-select to one contractor to build two air vehicles and one ground control system. Phase II Proposals from these five teams were subjected to the following evaluation factors, encompassing four areas as defined in the “Selection Process Document,” dated 15 February 1995:60 System Capability Four basic questions were answered within the context of the $10 million UFP: •

How close is the proposed system to meeting the SCD objectives?

•

How effective and suitable will the final system be, as a whole, in the operational environment?

•

How stable is the proposed design and technical approach throughout the program phases?

•

How well does the system design support growth and flexibility?

Technical Approach DARPA considered the structure of the technical program, progress made through Phase I, the technical effort and risk associated with completing the proposed system design, and meeting the $10 million UFP. Questions considered were as follows: •

Is the technical approach low-risk, and has the use of off-the-shelf technology been maximized?

•

Is the design, development, and manufacturing approach adequate for each program phase?

•

Are the technical processes described in the IMP adequate for their intended use?

Management Approach

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Here, the objective was to determine the degree to which the integrated management framework depicted a well-planned, easily trackable program and proposed a system deliverable within the resources provided. The evaluation addressed the following: planning, processes, program control, organization, and past performance.

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Financial Approach DARPA assessed the ability to execute the proposed program with the financial resources proposed and to achieve the required UFP. The financial resources were analyzed for each phase of the program and for the UFP allocation. DARPA used the following criteria: reasonableness, completeness, realism, and agreement.

59 60

Kinzig, Global Hawk Systems Engineering Case Study, 19-20 The next paragraphs on evaluation factors are adapted from Sommer et al. The Global Hawk Unmanned Aerial Vehicle Acquisition Process, which adapted and abbreviated the “Scope of Evaluation” from Section 8 of the Tier II+ Phase 2 solicitation, dated February 25, 1995.

GLOBAL HAWK: REQUIREMENTS Judging TRA’s approach to be relatively low-risk, DARPA selected the firm for the Phase II contract in May 1995. TRA was contracted to build two air vehicles and one ground control segment, with technical performance to be tested for consistency with the $10 million UFP. “The technical content contracted for in Phase II remained as initially planned, i.e., design and build two air vehicles and one ground segment, followed by flight testing sufficient to demonstrate the technical performance consistent with a $10 million (FY94 dollars) UFP. In order to ensure that all the technical characteristics would be fully addressed, TRA converted all the technical performance objectives into requirements. Trade-offs could then be made later, if required, to meet [if necessary] the UFP requirement.” Although TRA used the objectives as internal design parameters, the government’s sole contractual requirement remained the $10 million UFP.61 The DARPA Program Office remained small, consistent with the strategy of minimizing oversight. Though the size of the program office grew with time, throughout the ACTD program the total DARPA program office never exceeded about 30 full-time people, which included 10 engineers.62

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61 Kinzig, Global Hawk Systems Engineering Case Study, 22. 62 Ibid. 25.

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GLOBAL HAWK: INFLECTION

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As Phase II was executed, Air Force Command and Control, Intelligence, Surveillance, and Reconnaissance (AFC2ISR) Center began developing the Operational Requirements Document (ORD), which was eventually released as a draft in 2000. However, in 1998, the Global Hawk Phase II program moved under management of the Air Force. The AF Program Manager (PM) was tasked to complete Phase II, conduct a Phase III Military Utility Assessment (MUA), and plan the transition to a Major Defense Acquisition Program (MDAP).

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GLOBAL HAWK: DISCUSSION TOPICS 1.

How do you manage the transition of Global Hawk from an ACTD (one requirement, $10 million UFP) to a program of record (AFC2ISR developing an ORD) from a requirements perspective?

2. Develop a top-level schedule to take the Global Hawk to Milestone C.

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GLOBAL HAWK: DESIGN & PRODUCTION Issue 2: Concurrency Is Not For The Timid Following Global Hawk’s successful first flight, program management responsibility transitioned from the Defense Advanced Research Projects Agency (DARPA) to the Air Force in October 1998, towards the end of Phase II of the Advanced Concept Technology Demonstration (ACTD). In January 1999, the Global Hawk program entered Phase III, which included the build of additional air vehicles and ground control systems in order to collect data necessary for the user to make a Military Utility Assessment (MUA). The Integrated Assessment Plan dated June 1998 documented the MUA process, defining exercises and assessment plans for measuring three main performance attributes: effectiveness, suitability and interoperability.63 The United States Joint Forces Command (USJFCOM) conducted the MUA from June 1999 to June 2000. During this period, the Global Hawk system completed 21 sorties that totaled 381 flight hours. Detachment 1 Air Force Operational Test and Evaluation Center (AFOTEC) collected the data and reported directly to USJFCOM. The MUA concluded that Global Hawk demonstrated a military utility by flying 32-plus-hour sorties, collecting Synthetic Aperture Radar (SAR) images, and completing operationally representative missions, such as Roving Sands and Joint Task Force exercises. On the basis of these conclusions, the MUA provided recommendations, the most significant of which included the following: •

Expeditiously field an operational version of the ACTD system

•

Enter the formal acquisition system at Milestone II & concurrent Low Rate Initial Production (LRIP)

•

Use spiral development to upgrade capabilities over time64

Although the system had successfully demonstrated a military utility during Phase III, the program lacked many elements necessary to begin production. Lack of flight, static, fatigue, durability, and damage tolerance testing data from Phase III resulted in insufficient information to support a production go-ahead. Furthermore, there was no validated system, air vehicle, or lower-tiered specifications, a major Air Force requirement for the procurement of future air vehicles. As a result, Congress made the decision not to pursue production immediately following Phase III.65 Even if the Global Hawk ACTD program did not result in a system that was ready for production, the program was considered an operational success, as it demonstrated the ability to provide long-endurance, all-weather, continuous, near-real-time wide area reconnaissance and surveillance. The Air Force Program Office began Post-ACTD planning in January 1999. The Single Acquisition Management Plan (SAMP) documented the guidance for the post-ACTD activities. Several issues were left unaddressed in the May 1999 draft, including the definition of further development activities and procurement buy quantities and schedule.

63 Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 37 64 Ibid. 43 65 Ibid. 43-44

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The Office of Secretary of Defense (OSD) and the Assistant Secretary of the Air Force for Acquisition (SAF/AQ) requested post-Phase III options. The program office developed 10 options in preparation for a July 1999 Undersecretary of Defense for Acquisition and Technology (USD/A&T) program review. At this point, the post-Phase III acquisition strategy was broadly outlined with no specific structure.

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GLOBAL HAWK: DESIGN & PRODUCTION The decision from the meeting resulted in the approval and authority to define the details of the EMD phase. The program had one year to finalize the details and prepare the supporting documentation, which included the following: 66 •

Operational Requirements Document (ORD)

•

Systems Engineering Master Plan (SEMP)

•

Test and Evaluation Master Plan (TEMP)

•

Systems Acquisition Management Plan (SAMP)

•

System Requirements Document (SRD)

•

System Performance Specification (SPS)

The post-Phase III plans included a one-year Engineering Manufacturing Development (EMD) program, in compliance with Congressional direction from the FY99 authorization conference report, which required the Global Hawk program to complete an EMD phase before entering production. The Intelligence Program Decision Memorandum 1 was released in August 1999, providing further guidance on the overall Global Hawk acquisition strategy. Specifically, the memorandum required the program to do the following: 67 •

Buy two air vehicles in FY01 in order to protect the industrial base.

•

Initiate a one-year EMD program in FY01.

•

Initiate production in FY02 at the rate of two air vehicles per year.

•

Use spiral development to satisfy the Operational Requirements Document (ORD) and address issues identified in the MUA.68

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According to an Air Force “Early Strategies and Issues Session Briefing” dated March 2000, the following program risks still remained:

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•

All requirements had not yet been defined;

•

Funding was insufficient to support concurrent EMD and production; (To cover required program content, the USD (AT&L) proposed a $510 million FYDP plus-up to the Global Hawk program. However, this would have been at the expense of other Air Force programs, and the Air Force Vice Chief of Staff responded by asking for only an additional $390 million for the Global Hawk program, while promising to accomplish the same program content.)69

•

Production facility constraints remained in terms of ramping up production rates;

•

Insufficient funding was programmed beyond the first spiral;

•

Technical training and data may not be complete by Initial Operational Test and Evaluation (IOT&E);

•

Program faced potential unavailability of parts due to vanishing vendors; and

•

Systems available for IOT&E might not be production representative.70

66 Ibid. 50 67 Ibid. 49 68 Ibid. 69 Ibid. 70 ASC/RAV Early Strategies and Issues Session Briefing, March 2000, quoted in AFIT 51

GLOBAL HAWK: DESIGN & PRODUCTION A favorable Milestone II decision to enter EMD was rendered in February 2001. The Aeronautical Systems Center (ASC) at Wright Patterson Air Force Base (WPAFB) subsequently awarded Northrop Grumman (which had recently acquired TRA) a Federal Acquisition Regulation (FAR) compliant EMD contract in March 2001. This required the contractor to provide the following: •

Cost Performance Report (CPR)

•

Contract Funds Status Report (CFSR)

•

Contractor Cost Data Report (CCDR)

Instead of a System Specification, the contract included a four-page draft System Requirements Document (SRD). Though the SRD did not contain the normal level of detail associated with a System Specification, the program’s approach was to define the configuration baseline requirements at the conclusion of EMD, giving Northrop Grumman greater latitude in its design approach.71 The draft SRD addressed the following overall system requirements: •

Minimum endurance capability to transit 1,200 nautical miles, remain on station for 24 hours, and return to base

•

Worldwide operation in all classes of airspace

•

Near-real-time mission control, mission monitoring, and mission updates/modifications

•

Capability to satisfy 100 percent of the top-level Information Exchange Requirements

•

ORD requirements for reliability, maintainability, and sustainability

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71 Ibid.

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GLOBAL HAWK: INFLECTION POINT

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Three months after EMD contract award, in June 2001, Northrop Grumman was awarded a contract for LRIP of two air vehicles and one Mission Control Element (MCE), the completion date set for December 2003. This established concurrency between EMD and production.72

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72 Ibid., 55

GLOBAL HAWK: DISCUSSION TOPICS 1.

How do you prepare for this level of concurrency? (Warranty, issues discovered late in test, special clauses, production cost negotiation, etc.) 2. Modify your top-level program schedule to comply with the new direction.

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GLOBAL HAWK: PROGRAM MANAGEMENT Issue 3: When Is A Modification A New Program In March 2001 Northrop Grumman was awarded an Engineering, Manufacturing and Development (EMD) contract. In June 2001, a Low-Rate Initial Production (LRIP) contract for two air vehicles, now designated RQ 4A, and one mission control element was awarded with a delivery date of 2003. The total cost of the concurrent EMD and production contracts was $5.4 billion. The total quantity of air vehicles for the program was 63 aircraft. During execution of the EMD and LRIP contracts, the terrorist attacks of 11 September 2001 occurred. Subsequently operations in Afghanistan propelled Global Hawk into combat support missions. It performed well and received high praise from users and Air Combat Command (ACC). Successful operations and urgency for sustained support in the Middle East drove the need for the Department of Defense (DoD) to consider bolstering the aircraft’s capabilities and performance. Thus, a restructure was launched to develop a larger airframe that would accommodate an increased sensor suite. A General Officer Steering Group (GOSG) recommended developing a larger aircraft in order to increase the payload from 2,000 to 3,000 pounds. Later that same year, DoD and General Jumper, then Chief of Staff, Headquarters (HQ) Air Force, designated the Global Hawk as a Transformational System, meaning that its capabilities were so revolutionary that it would be “fast tracked” into production. Additionally, new capabilities would be “spiraled in” at an accelerated rate. A one page list of requirements was quickly written to guide development of the new RQ-4B.73 In March 2002 the Air Force’s program management team began Global Hawk’s replan. The new plan envisioned a larger and more advanced RQ-4B air frame with concurrent development and production. The total Global Hawk purchase was reduced to 51 air vehicles (7 RQ-4As and 44 RQ-4Bs), 10 ground stations, and upgraded intelligence sensors, radar, and other support technologies. At the time of replan, DoD requested the Air Force reduce the overall program cost. A Joint Affordability Team (JAT) was formed and advised program management that buying fewer Global Hawks with full multi-intelligence capabilities would reduce the aircraft’s average unit price (37 fully multi-intelligence capable and 14 tailored single mission platforms). Air Force acquisition officials and Northrop Grumman agreed to this proposal, but the Air Force operational community pressed back, arguing that such a reduction in capabilities would not meet critical mission support activities. Pentagon acquisition chief, E.C. (Pete) Aldridge, responded to criticism of Global Hawk’s price tag, ‘’It’s expensive because we’re not buying very many of them. And it doesn’t have the reliability we like because we didn’t design it to have all the redundancy you would have in an operational system. If we get to a point downstream, which we plan to do, to increase the [production] rate, we will get the price down, and we will operationalize it; we will put the redundancy in it and so forth, so we hope to get the reliability back up.’’ 74

73 74 75

Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 61. Robert Wall, “USAF Stalls Global Hawk Cost Reduction Efforts,” Aviation Week and Space Technology (August 19, 2002), 33; Flughum, “Global Hawk Sigint Faces Uncertain Future,” Aviation Week and Space Technology, (January 14, 2002), 406-407. Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 61-62.

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Later that year in December 2002, the operational community conceded to accommodate the cost savings initiative outlined by the JAT. The acquisition shifted from all multi-mission capabilities to a combination of multi-mission and single-mission Global Hawks. The RQ-4A would remain an Imagery Intelligence (IMINT) only aerial vehicle, while the RQ-4B would contain both IMINT and Signals Intelligence (SIGNIT) capabilities. And, in response to growing pressure for Global Hawk’s rapid deployment in the Middle East, the program increased the concurrency of development and production efforts.75 In March 2003 the program office implemented the major restructure which had the following impacts.

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The RQ-4B Global Hawk fuselage was made larger, and equipment was rearranged, so the air vehicle could carry six of the seven Airborne Signals Intelligence Payload (ASIP) avionics boxes that the U-2 can carry. To offset the loss in stability and control from the increased fuselage volume, vertical fin size was increased. To retain air vehicle performance, additional fuel was added, and the span of the wing was increased. To improve laminar flow over the wing, manufacturing processes were modified to maintain tighter tolerances on curvature of the airfoil. The commercial off-the-shelf (COTS) engine was upgraded with improved turbine materials to provide more thrust and a longer duty cycle before teardown and refurbishment. The performance gains hoped for were not fully realized, and aircraft performance suffered. Maximum altitude was reduced from 65,000 feet to 60,000 feet, but endurance remained at about 30 hours, which was comparable to the initial LRIP aircraft RQ-4A. (Please see Exhibit 1 illustrating the key differences between the RQ-4A and RQ-4B)76

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Due to system upgrades the development period was lengthened from 7 to 12 years, while the total procurement schedule was condensed into 11 years, rather than the 20 years as outlined in the March 2002 plan. The accelerated schedule resulted in increased annual production quantities and greater concurrency. In addition the highly compressed production schedule increased dramatically the year to year funding needs. (See Exhibit 2)

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76 Ibid., 64-65; Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks, (Washington: GAO, November 2004), 6-7; Eric Schmitt, “A Nation at War: Military Air Craft; In the Skies Over Iraq, Silent Observers Become Futuristic Weapons,” The New York Times (April 18, 2003).

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KEY CHARACTERISTICS of GLOBAL HAWK RQ-4A & RQ-4B MODELS

KEY CHARACTERISTICS

RQ-4A

RQ-4B

Payload Capacity

2,000 pounds

3,000 pounds

Take-Off Weight

26,750 pounds

32,250 pounds

Wingspan

116.2 feet

130.9 feet

Fuselage length

44.4 feet

47.6 feet

Endurance

31 hours

33 hours

Average speed at 60,000 feet

340 knots

310 knots

Approximate Range

10,000 nautical miles

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GLOBAL HAWK: INFLECTION POINT At this point in the summer of 2003, the Global Hawk program RQ-4A LRIP units are being produced. There is a major increase in requirements resulting in a redesign of the Global Hawk; the new platform will be called RQ-4B. The Global Hawk operations supporting the war in Afghanistan have increased the demand for the capability. This resulted in a restructure to a compressed production schedule that is highly concurrent with development. â&#x20AC;&#x192;

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The program must accomplish a major redesign (RQ-4B) based on top level requirements, and new capabilities will be spiraled in rapidly throughout the production run. What are the risks and how would you manage them?

GLOBAL HAWK: TIMELINE

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GLOBAL HAWK: BUDGET & FUNDING Issue 4: Navigating In A Hurricane Due to successful deployment of unmanned aerial vehicles (UAVs) in post-2001 combat operations, the Department of Defense (DoD) shifted its investment strategy so by the mid-2000s the planned budget allocated $20 billion through 2011 to UAVs. Of this nearly 25% was allocated to the Global Hawk program. However, the rush to increase Global Hawk’s size, payload, and endurance in the RQ-4B increased its program unit fly away cost (total program cost/number of units). And, in April 2005 the Air Force reported to Congress a Nunn-McCurdy breach in procurement costs. The breach notification letter referenced the 2003 restructure (a major increase in requirements resulted in a redesign of the Global Hawk in a highly concurrent and compressed production schedule) as the primary source of fueling the overrun.77 The program office listed the following factors as contributing to the cost breach:78 •

Concurrency of production and development

•

Underestimation of technical issues associated with the RQ-4B upgrade

•

Increased sensor cost

•

Increased support requirements, including initial spares

•

Increased government costs for acceptance tests, design changes, and mission support

At that time the Government Accountability Office (GAO) noted that: “Program officials told us that they originally expected substantial commonality between the A and B models but, as designs were finalized and production started, it was apparent that the B model was more different, more complex, and more costly than anticipated.” 79

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The concurrent production of the RQ-4A and development of the RQ-4B increased risk, and within two years of the restructure, the program’s total cost estimate increased nearly $900 million from the March 2001 original plan. In part, this increase was triggered by the compression of the program’s schedule, necessitating an influx of resources for development of new RQ-4B designs. This increase resulted in the Air Force investing in nearly half of the total purchase of upgraded RQ-4Bs before a production model was fully tested and proven capable of meeting requirements. Another reason for the cost increases were delays in key program events after the restructure. For instance, the commencement of operational assessments for the RQ-4As was delayed approximately one year, and the subsequent operational testing for RQ-4B slipped two years. Between 2002 and 2004, the program also experienced multiple design changes. Only about 20% of the RQ-4A drawings were applicable to the redesigned RQ-4B, as opposed to the 80% originally projected. Nearly 50% of these drawings were considered significant design changes and contributed to a $209 million overrun in the development contract. Finally, unforeseen manufacturing issues delayed production and increased procurement costs. Issues included inadequate parts produced by subcontractors for the RQ-4B wing and tail.80 (See Exhibit 1 for production and development schedule)

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Program management was under pressure to remain within the estimated baseline unit cost, and several initiatives were launched to identify and implement process improvements for scheduling, testing, and production.81 Repeated program changes, however, prevented the effectiveness of these measures. 77 “Unmanned Aircraft Systems: New DoD Programs Can Learn from Past Efforts to Craft Better and Less Risky Acquisition Strategies,” (Washington: GAO, March 2006), 2-5. 78 For more on issues leading to breach see Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 73-75. 79 Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks, (Washington: GAO, November 2004), 3. 80 Ibid., 7-15; Amy Butler, “Spiraling Cost Plans to Stretch Global Hawk Fall Prey to Development Overrun,” Aviation Week and Space Technology, (April 4, 2005), 27 81 David Riel, “Global Hawk Lean Now Initiative Presentation,” Lean Aerospace Initiative Plenary Conference (March 26, 2003), http://lean.mit.edu/downloads/cat_view/99-presentations/83-lai-annual-conferences/128-2003-plenary-conference?start=25, a ccessed 20 February 2013.

GLOBAL HAWK: BUDGET & FUNDING Also at that time the Permanent Select Committee on Intelligence expressed concerns that “there is now an effort to flood the Global Hawk program with money; there are ad hoc plans for rapid, major upgrades before requirements have been established, and no sign of serious examination of where and how Global Hawk fits into an overall collection architecture.” This observation suggested that factors beyond the control of the program office were steering the direction of Global Hawk’s acquisition.82 The cumulative impact of the restructure propelled Global Hawk’s development cost estimates from $906.2 million in March 2001 to nearly $2.6 billion by March 2004. The concurrent production and development plan necessitated a condensed funding profile to ensure technologies could be matured by the production of the first six RQ 4Bs, which began in autumn 2004. However, the unforeseen testing and manufacturing issues did not keep pace with the production schedule, resulting in an overall program schedule slip. From the program’s original March 2001 baseline, the program acquisition unit cost increased from $85.6 million to $123.2 million.83 (See Exhibit 2 detailing Global Hawks Cost, Quantity and Unit Cost).

Elizabeth Bone and Christopher “Report to Congress: Unmanned Aerial Vehicles: Background and Issue for Congress,” LOC Order Code RL31872, 25 April 2003, 35-36. Unmanned Aerial Vehicles: Changes in Global Hawk’s Acquisition Strategy Are Needed to Reduce Program Risks, (Washington: GAO, November 2004), 9-13; “Global Hawk: Root Cause Analysis of Projected Unit Cost Growth,” (Alexandria: Institute for Defense Analysis, March 2011), 4-10.

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82 83

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GLOBAL HAWK: EXHIBITS EXHIBIT 2

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GLOBAL HAWK: INFLECTION POINT

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Although the program has successfully navigated the Nunn-McCurdy process, establishing a revised program baseline, the technical and programmatic challenges that caused the breach continued to persist. In addition, combat operations support and the appetite for Global Hawk enhancements (spiral development) continue unabated.

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GLOBAL HAWK: DISCUSSION TOPICS 1.

What do you think were the major contributor(s) to the breach?

2. Prioritizing these contributors to the breach, what actions will you take to reconcile them so as to stay within the new cost baseline? 3. What should you have watched to lead turn the major contributor to the breach? (proactive vs reactive)

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GLOBAL HAWK TEACHING NOTES

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GLOBAL HAWK: REQUIREMENTS Original requirement/Acquisition strategy for Global Hawk The requirement for a Global Hawk type of system grew out of Operation Desert Storm and the Air Forceâ&#x20AC;&#x2122;s need to find mobile SCUD missiles. The Services all agreed that an air vehicle was needed that could loiter at high altitude and provide extended surveillance of a given target area. This need was substantiated by several post-Desert Storm reviews, including those conducted by the Air Force Scientific Advisory Board and Defense Science Board. In response to the Joint Requirements Oversight Council (JROC) three-tier approach for developing UAVs, the Defense Airborne Reconnaissance Office (DARO) formed the High Altitude Endurance (HAE) UAV Program Office. The office was chartered with developing a family of unmanned reconnaissance vehicles meeting the objectives of the modified Tier II+/Tier III- approach. DARO sponsored the program but assigned program management responsibility to the Defense Advanced Research Projects Agency (DARPA) for the initial phases of Advanced Concept Technology Demonstration (ACTD). The Air Force was a participating organization with the intent of assuming program management responsibility for the final phases. The Memorandum of Understanding (MOU), which established the program, clearly stated that the effort would focus not only on development of the two systems (Tier II+ and Tier III-) but also on management issues that often plagued past programs. The MOU also required that the program be managed by a Joint Program Office (JPO) having a DARPA Program Director supported by both an Air Force and Navy Deputy Director. The intent was to ensure the buy-in of both the Air Force and Navy, thus integrating the development efforts, a concern previously expressed by Congress. Later within the ACTD, an Army Deputy Director was also included in the JPO. The United States Atlantic Command (USACOM) was identified as the user and was responsible for assessing military utility before the start of Phase III. USACOM was also designated as a participant in program reviews and a partner in developing the Concept of Operations (CONOPS). The strategy for the HAE UAV Tier II+ program involved four phases, as depicted in Figure 11. Phases I through III represented the ACTD program which was to be completed between October 1994 and December 1999, with Phases II and III running concurrently for six months in 1997. Phase IV represented production. No Engineering and Manufacturing Development (EMD) was originally planned. Phase I A six-month effort in which three teams conducted a system objective review and preliminary system specification review.

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Phase II

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A 27-month effort in which two teams designed and developed the UAV configuration, complete with a system specification and interfaces. The prototype system would then be built and undergo initial flight testing. The products for each team included two prototype air vehicles, one set of sensors, one ground segment, and one support segment capable of demonstrating the overall, integrated system performance. Phase III A 36-month effort in which a single team would demonstrate their integrated system operational utility. The products included eight fully integrated, pre-production air vehicles (except for two EO/IR sensors), two ground segments, and the logistics support necessary for a two-year field demonstration.

GLOBAL HAWK: REQUIREMENTS Phase IV Open-ended serial production of Air Vehicle (A/V) #11 and beyond, as well as Ground Segment #4 and beyond. In establishing the HAE program, DARPA recognized the failures of past UAV programs because of unit costs far exceeding what the user was willing to fund. In an attempt to overcome the historical problems, DARPA, with congressional support, implemented a new acquisition strategy significantly different from past DoD strategies. ACTD The ACTD concept was initiated with development of the Tier II+ program strategy. In 1994, the ACTD process evolved in response to the recommendations of the Packard Commission (1986) and Defense Science Board (1987, 1990, and 1991). The concept was developed to provide a rapid, cost-effective means to introduce new capabilities into the military services. Another significant strategy implemented was the use of a newly adopted legislation that permitted the removal of many oversight and management processes typically required by Government acquisitions. The authority granted by this provision was known as Section 845 Other Transactions Authority (OTA). The HAE program had been classified as a Pilot Acquisition Program under Public Law 101-189, Section 2371, Title 10, United States Code (USC), and under Section 845 of the 1994 National Defense Authorization Act (NDAA) (Public Law 103-160). This not only released the contractor from complying with Military Specifications (MIL-SPECs) but also released it from a series of Government rules and regulations, such as the Federal Acquisition Regulations (FARs); Defense FAR Supplement; Armed Services Procurement Act; Competition in Contracting Act; and Truth in Negotiations Act. It also freed the contractor from the requirement to undergo Defense Contract Audit Agency (DCAA) audits, thus allowing the use of commercial auditors. In essence, all procurement system regulations were non-applicable. However, this waiver was initially granted only through Phase II. Extension of the waiver into Phase III was not a given, and thus represented a program risk. If the program transitioned into Phase IV, there was a good chance that the program would return to the “standard” acquisition process.

“This agreement gives extraordinary responsibility and authority to Teledyne Ryan Aeronautical (TRA) The Government will not unilaterally direct performance within or outside the scope of the work. Thus the government must be able to convince TRA of the need for change.”

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Section 845 OTA allowed DARPA to operate under an “agreement” instead of a contract. Two key differences between a typical contract and an “agreement” are defined in Article IV and VII. For an “agreement,” Article IV, Payable Event Schedule, permits the parties to agree to changes in payable milestones based on program events, and Article VII, Disputes, designates the DARPA director as the ultimate arbiter of disputes. Section 845 OTA also transferred significant management and design responsibility to the contractor. This allowed the contractor to operate under few obligations, gave the contractor the ability to cease work at any time without penalty, limited Government direction, and required no formal reporting or tracking. In essence, the agreement gave the JPO limited influence as reflected by the following section of the agreement:

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GLOBAL HAWK: DESIGN & PRODUCTION What was going on with TRA and Northrop Grumman Teledyne Ryan (TRA) was a relatively small aeronautical company. It had its roots in 1934 when T. Claude Ryan founded the Ryan Aeronautical Company. Its first aircraft was the Ryan ST or Sport Trainer, a low-wing, tandem seat monoplane. In 1937, a second civilian model was introduced, the Ryan SCW-145. This was a larger, three-seater aircraft. Interest from the Army Corps followed, resulting in the PT-16 (15 built); PT-20 (30 built); PT-21 (200 built); and, finally, the PT-22 (1298 built). Following World War II, Ryan expanded its business base to include missiles and unmanned aircraft. Some of the more significant unmanned vehicles include the Ryan Firebee unmanned target drone and Ryan Firebird (first air-to-air missile). In the 1950s, Ryan became a pioneer in jet vertical flight, developing the X-13 Vertijet and, in the early 1960s, the XV-5 Vertifan. In 1968, the company was acquired by Teledyne for $128 million, and T. Claude Ryan retired. In the late 1990s, Northrop Grumman decided to expand its military aerospace business base into the area of UAVs. They viewed the acquisition of TRA as a logical choice. TRA had a history rich in UAVs, starting with target drones and then progressing into missiles. They also had one of the major, up-and-coming Air Force military contracts with the Global Hawk. In July 1999, Northrop Grumman finalized a $140 million buy of TRA. The acquisition was logically viewed by many as a move designed to bolster Northrop Grumman’s presence in the UAV business. Regarding the buy, Northrop Grumman chairman, Kent Kresa, called the acquisition “an excellent strategic fit with many of Northrop Grumman’s business areas and strengthens our surveillance and precision strike capabilities.” 84 EMD Statement of Work (SOW) The SOW designated Northrop Grumman as the prime contractor with Total System Performance Responsibility (TSPR) for the Global Hawk system, including the air, ground, and support elements. It further stated that spiral development was to be used to develop the key system improvements, and IPTs would be used in the program management of the tasks. The specific non-recurring engineering tasks identified in the SOW included: •

Worldwide operations with areas to include tailored Global Air Traffic Management (GATM) requirements and See and Avoid requirements

•

Mission updates

•

Capability to retrofit AV-7 in support of testing and validation

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The SOW specifically addressed many of the products directly related to a Federal Acquisition Regulations (FAR) based contract. For example, the SOW included a requirement for the contractor to prepare and submit a Contractor Work Breakdown Structure (CWBS); a Contract Performance Report (CPR), using Northrop Grumman’s Earned Value Management System (EVMS); and a Contract Funds Status Report (CFSR). Also included in the SOW were requirements for:

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•

An IMS that detailed all activities for the Global Hawk system, including the air vehicle, ground, and support segments

•

Reliability analysis

•

Aircraft Structural Integrity Program (ASIP) Master Plan

•

Technical Orders (TOs)

84 Bill Kinzig, Global Hawk Systems Engineering Case Study, (Wright-Patterson AFB: Air Force Center for Systems Engineering), 37

GLOBAL HAWK: DESIGN & PRODUCTION The SOW also contained a requirement for Northrop Grumman to support demonstrations and exercises at the direction of the Contracting Officer. Northrop Grumman was required to maintain all available air vehicles, ground segments, and support segments in a condition suitable for the unspecified flight operations. Many of the typical engineering activities associated with a program of this magnitude were not specifically mentioned in the SOW. However, some were implied under the Configuration Management section, which required that specific documentation be provided in the Program Document Library or hard copy. Some of the more significant documents to be included in the Program Document Library were: •

System, segment, and available lower-tier specifications

•

Interface Control Documents (ICDs) and Interface Definition Documents (IDDs)

•

Software Requirement Specifications (SRSs), Software Design Documents (SDDs), and Version Description Documents

•

System Integration Plans, Subsystem Integration Procedures, and UAV Level Acceptance Test Procedures

•

Integrated Master Plan (IMP) and EVMS metrics

•

Integrated Logistics Support Data

Airworthiness certification, a new Air Force requirement just established in October 2000, was only indirectly mentioned through its inclusion in the list of applicable documents. Production - distinguishing between spirals, lots and blocks The production process followed by the Global Hawk program involved the terms “blocks” and “lots.” Simply speaking, the relationship between block, lot, and spiral can be explained as follows: •

Spiral refers to the incremental development of a system capability.

•

Block represents a series of aircraft with the same capability. Thus, a given block contains a specific spiral (or set of spirals).

•

Lot represents a series of aircraft procured under a given authorization. A lot can involve one or multiple blocks of aircraft.

Combat deployments Operation Enduring Freedom (November 11, 2001, to September 28, 2002)

Immediately following September 11, 2001, the Program Office at WPAFB had to identify how the Global Hawk could support the war on terrorism. The program office, in concert with Northrop Grumman, identified how the system could provide an advantage. As a result, AV-3 was deployed to Afghanistan in November 2001 to support central command’s request for persistent, broad area reconnaissance and surveillance. Several members of the program office, both military and civilian, accompanied the deployment. During Operation Enduring Freedom, the “Global Hawk provided the Air Force and joint war-fighting commanders more than 17,000 near-real-time, high-resolution

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September 11, 2001 had both a very positive impact in determining the future of the Global Hawk program and a negative impact to maintaining cost and schedule. Global Hawks’ deployment to Southwest Asia allowed it to demonstrate its true value to the warfighter in a real-world scenario. On the other hand, it robbed the EMD program of a valuable asset, ultimately costing the program non-planned dollars and schedule time.

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GLOBAL HAWK: DESIGN & PRODUCTION intelligence, surveillance and reconnaissance images, flying more than 60 combat missions and logging more than 1,200 combat hours.”85 To keep the ACTD aircraft functioning, parts for AV-3 were cannibalized from AV-6. The ground station segment performed extremely well, giving the commanders a continuous wide-angle view of the battlefield. This view was instantly beamed to the Combined Air Operations Center in Saudi Arabia, and enemy positions would be communicated to field commanders and pilots. In assessing its contribution to the war on terrorism, Lt Col Thomas Buckner, 12th Expeditionary Reconnaissance Director of Operations, is quoted as saying, “To know it was a technology demonstrator and then to (see) it sent to war is amazing….Global Hawks are in huge demand by combatant commanders. We are able to respond and be flexible for the users on the ground.”86 Operation Iraqi Freedom (March 18 to April 23, 2003) During Operation Iraqi Freedom, the Global Hawk flew 15 missions, collecting over 4,800 images. Even though this represented only 3 percent of all the image collection missions flown, it represented 55 percent of the time-critical data on air defense targets. The sole Global Hawk “located at least 13 surfaceto-air missile batteries, 50 SAM launchers, 300 canisters and 70 missile transporters; it also imaged 300 tanks, 38 percent of Iraqi’s armored force—a remarkable display of the air vehicle’s capability. The Joint Forces Air Component Commander credited the Global Hawk with accelerating the defeat of the Iraqi Republican Guard, shortening the duration of the war and reducing casual ties, exceeding the combatant commander’s expectations.” 36

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During Operation Iraqi Freedom, the Air Force used a reach-back capability. The UAV and its sensors were remotely operated from Beale Air Force Base (AFB), California. This was estimated to reduce the Global Hawk logistics footprint by more than 50 percent. The crew used Internet-style chat rooms to provide effective C2 over a system that was spread across the globe.

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85 Ibid. 57 86 Ibid. 57-58

GLOBAL HAWK: PROGRAM MANAGEMENT Global Hawk’s success increased the desire for greater capabilities The 2002 restructure was driven by urgency to support operations in the Middle East and the need for more advanced surveillance capabilities. The program manager was tasked with setting a new baseline and quickly delivering the advanced RQ-4B to the warfighter. The overall impact resulted in a different program than had initially justified the Air Force’s 2001 decision to begin system development and low-rate production. In 2005 then Secretary of Defense Donald Rumsfeld directed the retirement of the Lockheed U-2 Dragon Lady. Where many in the Pentagon were suspect of Global Hawk and other UAV surveillance technologies, Rumsfeld’s decision marked a key milestone in the Department of Defense’s (DoD) shift toward unmanned combat systems. The Cold War era U-2 still provided capabilities not incorporated in the Global Hawk RQ-4A, such as the full suite of high altitude multi-INT collection capability, including signals intelligence (SIGINT) and either optical camera photography, Electro-optical Infrared (EO/ IR) imagery, or Synthetic Aperture Radar (SAR). After much discussion and debate within and between the Air Force and OSD, Lt. Gen. David Deptula, the Service’s deputy chief of staff for Intelligence Surveillance and Reconnaissance (ISR), established a High Altitude Transition (HAT) plan in 2006. Under this plan, the Global Hawk Block 30 would replace the U-2. A tentative schedule was outlined for this overall transition, but the final approval would be made by Congress. In 2007, the National Defense Authorization Act required that the Secretary of Defense prove that the retirement of the U-2 would not compromise existing aerial intelligence capabilities. However, Global Hawk’s Nunn-McCurdy breach and delayed development schedule sparked a battle over manned versus unmanned aerial surveillance systems, delaying Rumsfeld’s previous decision to phase out the U-2. This debate lingered within Congress and the DoD and was used as justification for the cancellation of Block 30.

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GLOBAL HAWK: BUDGET & FUNDING As a result of the Nunn-McCurdy Breach review, the program office rebaselined the program in 2007 with fixed content and criteria. The fixed content was defined by a set of validated and approved reference documents including:87 Capability Development Document (CDD) approved and validated by the Joint Requirements Oversight Committee (JROC) in July 2006. This requirements document supersedes the original 2001 Operational Requirements Document (ORD) and earlier version of the CDD. Cost Analysis Requirements Description (CARD) prepared by the Aeronautical Systems Center, Reconnaissance Systems Wing, Global Hawk Systems Group at Wright-Patterson AFB. The current version of the CARD was submitted in March 2006, and approved by the Air Force Program Executive Officer for Aircraft (AFPEO/AC). Test and Evaluation Master Plan (TEMP) Revision B, initially submitted October 2006, finalized in September 2007 by the Assistant Secretary of the Air Force (Acquisition); the Director, Operational Test and Evaluation; and the Deputy Secretary of Defense (C3ISR & IT Acquisition). Acquisition Program Baseline (APB) agreement document – dated 27 March 2007. Acquisition Strategy Report (ASR) Change 3, dated 15 June 2007 and signed by the Defense Acquisition Executive (DAE) on 3 July 2007.

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The program had been plagued by schedule delays and the new APB schedule established several key features including: Block 20/30 combined IOT&E completed by November 2009, Block 40 IOT&E completed by February 2011, and 3 to 4 months allotted for block IOT&E events. (See Exhibit 1 for 2007 APB schedule)

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87 Global Hawk: Root Cause Analysis of Projected Unit Cost Growth, (Alexandria: Institute for Defense Analysis, March 2011), 6.

GLOBAL HAWK: EXHIBITS EXHIBIT 1

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New cost estimates were also included, with the following key features: quantity increased from 51 aircraft to 54 aircraft, APUC estimate increased from ~$57 million to ~$91 million (objective), and no separate quantities or baseline estimates for the defined blocks. (See Exhibit 2 for Acquisition Program Baseline Estimates)

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Acquisition Program Baseline Cost Estimate

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The program did not submit a SAR in 2008, but the 2009 SAR reported a 20% increase in the estimated APUC since the 2007 rebaseline. David Van Buren, then USAF Undersecretary of Acquisition, remarked that “testing and delivery has been slower than expected. I am not happy with the pace of that program and we are not happy with the cost of the air vehicle.” Northrop senior management resisted criticism, arguing that “while there have been cost spikes within production lots due to the quantity procured within each lot, overall cost of the air vehicle and the sensors is trending down, as the company predicted and expected.” The post-Nunn McCurdy rebaseline did not adequately address the root cause of increasing development costs, which resulted in continued increase in overall procurement cost.88 88

RQ-4AB Global Hawk Select Acquisition Report (Washington: December 2010), 17-27. “War of Words Rages over Global Hawk” Flight International (June 29. 2010). “Global Hawk High-Altitude Long-Endurance Unmanned Aerial System (RQ-4) Air Force Programs (Washington, 2011), 222-225; “Defense Acquisition Board Approves Plan for Global Hawk Program,” Inside the Air Force (November 25, 2005).

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APPENDIX 3

ACKNOWLEDGMENTS

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ACKNOWLEDGMENTS NDBI STUDY TEAM

The authors and the University of Tennessee’s National Defense Business Institute would like to thank all who contributed their thoughts, time and support to this study. The analysis and findings presented here are solely the responsibility of NDBI and the authors. Principal Contributor: National Defense Business Institute Principle Investigator - Mr. J. David Patterson Team Lead - Dr. David O’Brien Program Lead - Mr. Andrew W. McRee Esq. Subject Matter Experts - Mrs. Judy Stokley, General Ted Bowlds (ret.), Mr. John Allen Team Members - Mrs. Melanie Faizer, Mr. Blake Renfro, Mr. Chris Hedgepeth, Mr. Nolan Sherrill

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