Defense Acquisitions: Matching Resources with Requirements Is Key
to the Unmanned Combat Air Vehicle Program's Success (30-JUN-03, 
GAO-03-598).							 
                                                                 
The Department of Defense (DOD) is developing a new unmanned	 
combat air vehicle (UCAV) that can suppress enemy air defenses	 
and conduct other air-to-ground attacks, particularly against	 
heavily defended targets. Because it may perform these missions  
at a relatively low cost, the UCAV could be used to replace some 
of DOD's aging tactical aircraft fleet. A key to UCAV's success  
will lie in DOD's ability to match users' needs, or requirements,
with the developer's resources (technology and design knowledge, 
money, and time) when product development begins. Our work shows 
that doing so can prevent rework and save both time and money.	 
Therefore, we assessed DOD's ability to make this match. GAO	 
conducted its work on the basis of the Comptroller General's	 
authority and addresses the report to the Subcommittee on	 
Tactical Air and Land Forces, House Committee on Armed Services  
because of its interest and jurisdiction in the program.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-03-598 					        
    ACCNO:   A07441						        
  TITLE:     Defense Acquisitions: Matching Resources with	      
Requirements Is Key to the Unmanned Combat Air Vehicle Program's 
Success 							 
     DATE:   06/30/2003 
  SUBJECT:   Air warfare					 
	     Aircraft						 
	     Combat readiness					 
	     Defense capabilities				 
	     Defense cost control				 
	     DOD Unmanned Combat Air Vehicle			 
	     X-45A Aircraft					 
	     X-45B Aircraft					 
	     X-45C Aircraft					 
	     X-47B Aircraft					 

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GAO-03-598

Report to the Subcommittee on Tactical Air and Land Forces, Committee on
Armed Services, House of Representatives

United States General Accounting Office

GAO

June 2003 DEFENSE ACQUISITIONS

Matching Resources with Requirements Is Key to the Unmanned Combat Air
Vehicle Program*s Success

GAO- 03- 598

The UCAV program*s original performance objectives posed manageable
challenges to build an affordable, highly survivable, and lethal weapon
system. The Air Force, however, added requirements for electronic attack
and increased flying range after DOD accelerated the program*s product
development schedule by 3 years. These changes widened the gap between the
customer*s requirements and the developer*s resources, specifically time,
reducing the probability that the program would deliver production
aircraft on cost, on schedule, and with anticipated performance
capabilities.

DOD has recently decided to adopt a new joint service approach to UCAV
development that provides more time to close the requirements* resource
gap before product development starts. It appears DOD may add new content
because it is proposing to build a new prototype that would be a larger
air vehicle, capable of flying and carrying out combat missions for longer
periods of time. To reduce technical risk, DOD anticipates delaying the
start of product development for several years in order to address new
requirements.

As a gap between resources and requirements widened in 2002, risks
projected for the start of product development with UCAV*s 15
technologies, processes and system attributes increased significantly. The
new joint plan brings the risks back down. This action also allows
competition back into the UCAV development effort.

DOD will still face challenges in controlling joint, multimission
requirements and ensuring that both services continue to provide funds for
the program while also funding other large aircraft investments. If these
challenges are not met, the gap between requirements and resources could
resurface. DOD*s role will continue to be instrumental in helping to
negotiate requirements, assure resources are in place, and make difficult
program trade- offs.

Risk Levels Projected at Start of Product Development under Different UCAV
Plans

The Department of Defense (DOD) is developing a new unmanned combat air
vehicle (UCAV) that can

suppress enemy air defenses and conduct other air- to- ground attacks,
particularly against heavily defended targets. Because it may perform
these missions at a relatively low cost, the UCAV could be used to replace
some of DOD*s aging tactical aircraft fleet. A key to

UCAV*s success will lie in DOD*s ability to match users* needs, or
requirements, with the developer*s resources (technology and design
knowledge, money, and time) when product development begins. Our work
shows that doing so can prevent rework and save both time and money.
Therefore, we assessed DOD*s ability to make this match.

GAO conducted its work on the basis of the Comptroller General*s authority
and addresses the report to the Subcommittee because of its interest and
jurisdiction in the program.

We recommend that DOD develop a joint UCAV acquisition approach that
balances requirements and resources at the start of product development.
We also recommend that the Secretary formalize the UCAV management role
performed by his office, ensure that the services are fully involved in
the process, and work to develop an efficient approach to transition the
UCAV to the product development phase so the needs of the war fighter can
be met more quickly. www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 598. To
view the full product, including the scope

and methodology, click on the link above. For more information, contact
Paul Francis at (202) 512- 2811 or francisp@ gao. gov. Highlights of GAO-
03- 598, a report to the

Subcommittee on Tactical Air and Land Forces, Committee on Armed Services,
House of Representatives June 2003

DEFENSE ACQUISITIONS

Matching Resources with Requirements Is Key to the Unmanned Combat Air
Vehicle Program*s Success

Page i GAO- 03- 598 UCAV Program's Success Letter 1 Results in Brief 2
Background 3 Importance of Matching Resources with Requirements before

Product Development 5 Gap between UCAV Resources and Requirements Was
Increased in 2002 7 Recent DOD Decision to Restructure Program Can Reduce
Risks 14 Conclusion 19 Recommendations for Executive Action 19 Agency
Comments and Our Evaluation 20 Scope and Methodology 20 Appendix I
Comments from the Department of Defense 22

Tables

Table 1: Current Risk Level of UCAV Technologies, Processes, and System
Attributes 9 Table 2: Chronology of Changes to the Air Force UCAV
Acquisition

Program Schedule Since 2000 11 Table 3: Comparisons of UCAV Variants 14
Figures

Figure 1: Boeing X- 45A Demonstrator in Flight 4 Figure 2: Computer
Rendition of the Boeing X- 45B Prototype 5 Figure 3: Timing of the Match
between Customer Requirements and Resources 7 Figure 4: Effect of
Accelerated Product Development Start on Program Risk 13 Figure 5:
Computer Rendition of the Boeing X- 45C 15 Figure 6: Computer Rendition of
the Northrop Grumman X- 47B 16 Figure 7: Effect of Delayed Product
Development Start on

Program Risk 17 Contents

Page ii GAO- 03- 598 UCAV Program's Success Abbreviations

DARPA Defense Advanced Research Projects Agency SEAD suppression of enemy
air defenses UCAV Unmanned Combat Air Vehicle

This is a work of the U. S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. It may contain
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copyright holder may be necessary should you wish to reproduce copyrighted
materials separately from GAO*s product.

Page 1 GAO- 03- 598 UCAV Program's Success

June 30, 2003 The Honorable Curt Weldon Chairman The Honorable Neil
Abercrombie Ranking Minority Member Subcommittee on Tactical Air and Land
Forces Committee on Armed Services House of Representatives

The Department of Defense (DOD) is in the initial stages of developing a
new unmanned air vehicle capable of suppressing enemy air defenses and
carrying out other types of air- to- ground attacks, particularly against
heavily defended targets. Because of its potential to perform these
missions at a relatively low cost, this new air vehicle could foster
efforts to replace DOD*s aging tactical aircraft fleet.

The air vehicle is being developed under the Unmanned Combat Air Vehicle
(UCAV) program. This is an advanced technology demonstration program,
still in a pre- acquisition phase, with two demonstrator UCAVs

being flown to assess technologies and capabilities. Launch of a formal
product development program was expected to occur next fiscal year but has
since been delayed. We conducted our work on the basis of the Comptroller
General*s authority and have addressed the report to you because your
expressed interest in the program as a committee of jurisdiction.

The start of product development* signified by a Milestone B decision*
represents the point at which program managers make a commitment to DOD
and the Congress that the UCAV will perform as required and be delivered
on time and within estimated costs. Our work has shown that programs are
more likely to succeed if program managers are able to achieve a match
between user needs, which eventually become requirements, and resources
(technology, design and production

knowledge, money, and time) at the start of product development.
Conversely, if they do not match requirements with resources, cost
overruns and schedule delays are likely to occur, reducing DOD*s buying
power in other areas.

United States General Accounting Office Washington, DC 20548

Page 2 GAO- 03- 598 UCAV Program's Success

Consequently, this report analyzes requirements 1 and schedule changes
made during pre- acquisition and their effects on DOD*s ability to achieve
this match. The report also assesses a recent decision to expand the
program* both in terms of the military services that will be involved with
it and in terms of the design and capability of the air vehicle* and that

decision*s effect on DOD*s ability to match requirements to resources. Our
report focuses on the UCAV program managed by the Air Force and the
Defense Advanced Research Projects Agency (DARPA). DARPA has also been
working with the Navy on a UCAV, but until recently its transition to the
product development phase was further off in the future. We did not assess
the Navy*s effort except to the extent that it was included in the
recently established joint program. From 2000 through 2002, decisions to
get more capability in less time

widened the gap between UCAV resources and requirements. The UCAV
program*s original requirements posed significant, but manageable
challenges to build an air vehicle that is affordable throughout its life
cycle, highly survivable, and lethal. Subsequently, however, the Air Force
added requirements for an electronic attack mission and increased flying
range. Also, DOD accelerated the program*s product development schedule by
3 years. Those actions widened the gap between requirements and resources
and increased the challenge for the development program.

DOD has recently decided to adopt a new joint Air Force and Navy approach
to UCAV development that provides more time to close the requirements-
resource gap before product development starts. Details concerning the new
acquisition strategy behind this approach have not yet been worked out.
However, the program could increase requirements

since DOD is proposing to develop a new prototype that would essentially
be a larger air vehicle, capable of carrying out combat missions for
longer periods of time. DOD currently anticipates delaying product
development by several years in order to address new requirements. This
delay would help to reduce technical risks, but initial fielding of the
new air vehicle would be delayed as well. Having the Air Force and the
Navy work jointly on a UCAV program is more efficient than two separate
programs. At the

1 Formal requirements for the UCAV program have not yet been established.
However, program objectives based on customer expectations have been
established for specific missions the UCAV is expected to perform. We
refer to these as requirements in this report. Results in Brief

Page 3 GAO- 03- 598 UCAV Program's Success

same time, the participation of two services will increase the challenges
of sustaining funding and managing requirements.

GAO is making recommendations to the Secretary of Defense on maintaining
flexibility to make the tradeoffs necessary to bring and keep the UCAV*s
requirements and resources in balance and to ensure his office maintains
the constructive role it has played in the program so far.

DOD has been successfully using unmanned air vehicles such as the Global
Hawk and Predator to gather intelligence and perform surveillance and
reconnaissance missions for military purposes. Beginning in the mid-
1990s, DOD began to conceive of a different type of unmanned air vehicle*
the unmanned combat air vehicle or UCAV* which would be capable of
performing dangerous, lethal combat missions, including suppression of
enemy air defenses (SEAD). 2 Unlike other unmanned air vehicles, UCAVs
would carry weapons as well as electronic jammers to confuse enemy radars.
DOD also envisioned that the air vehicle would operate more autonomously
than other unmanned air vehicles, requiring little or no human input from
ground stations to complete their missions or change flight paths. In
addition, UCAVs would be stealthy and capable of flying in groups or with
manned aircraft.

The potential of these weapons has garnered high interest from both
Congress and DOD. In the fiscal year 2001 Defense Authorization Act,
Congress set a goal that by 2010, one- third of DOD*s deep strike force be
unmanned in order to perform this dangerous mission. 3 In addition to the
potential for saving lives on risky missions, the UCAV could provide
mission capability at less cost than manned aircraft. Program officials
initially aimed for the UCAV*s acquisition cost to be one- third of the
joint strike fighter and operations and support costs to be at least 75
percent lower. Because of the promise of unmanned air vehicles, the Office
of Secretary of Defense has established a joint- service unmanned air
vehicles task force to help promote the development and fielding of these
systems, including making sure that there is multiservice cooperation.
This task

2 Suppression of enemy air defenses (SEAD) missions are those directed at
destroying or interrupting the ability of ground- based missiles, either
fixed or mobile, to locate, target, and/ or destroy U. S. aircraft.

3 Pub. L. No. 106- 398, Sec. 220 (2000). Background

Page 4 GAO- 03- 598 UCAV Program's Success

force is responsible for outlining the future of DOD*s unmanned air
vehicles. In the late 1990s, DARPA and the Air Force began pre-
acquisition efforts

to conduct advanced technology demonstrations to show the technical
feasibility of using UCAVs to penetrate deeply into enemy territory to
attack enemy targets. Boeing Corporation was selected in 1999 to develop
and demonstrate two demonstrator UCAVs* designated X- 45A. (See fig. 1.)

Figure 1: Boeing X- 45A Demonstrator in Flight

The DARPA- Air Force UCAV original plan also called for building and
demonstrating two prototypes during the pre- acquisition phase, called X-
45B, that are larger and incorporate low observable technology. (See fig.
2.) These air vehicles were expected to be more representative of the
operational air vehicle that the Air Force planned to field. Initially,
the Air Combat Command, which establishes mission and performance

requirements, determined that the X- 45B should be focused on performing
SEAD missions within the air superiority mission area. This decision was
made to address the limited inventory of current assets in the air
superiority mission area and to counter the challenges and deficiencies
associated with conducting SEAD missions.

Page 5 GAO- 03- 598 UCAV Program's Success

Figure 2: Computer Rendition of the Boeing X- 45B Prototype

As of February 2003, 55 of 160 planned demonstrations have been completed.
Most of the demonstrations designed to validate the basic flight
characteristics of the air vehicle have been completed. Only a small
number of the demonstrations needed to validate the ability of a single
air vehicle to perform a preemptive destruction mission have been
completed. The more demanding demonstrations* those designed to
demonstrate

technologies and software for highly autonomous, multivehicle operations
(with both manned aircraft and unmanned air vehicles), and the more
difficult aspects of the SEAD mission against mobile targets* have not
begun.

The product development decision that DOD is approaching for its UCAV
program represents a commitment by the product developer to deliver a
product at established cost, schedule, and performance targets and
identifies the amount of resources that will be necessary to do so. Our
studies of leading companies have shown that when requirements and
resources were matched before product development was started, the more
likely the development was able to meet performance, cost, and schedule
objectives. 4 When this took place later, programs encountered

4 U. S. General Accounting Office, BEST PRACTICES: Better Matching of
Needs and Resources Will Lead to Better Weapon System Outcomes, GA0- 01-
288 (Washington, D. C.: Mar. 8, 2001). Importance of

Matching Resources with Requirements before Product Development

Page 6 GAO- 03- 598 UCAV Program's Success

problems such as increased cost, schedule delays, and performance
shortfalls.

A key to achieving this match is to ensure that the developer has the
resources* technology, design and production knowledge, money, and time*
needed to design, test, manufacture, and deliver the product. It is not
unusual for a customer to initially want a high- performing product that
does not cost much or take too long to develop. But such an expectation

may exceed the developer*s technology or engineering expertise, or it may
be more costly and time- consuming to create than the customer is willing
to accept. Therefore, a process of negotiations and trade- offs is usually
necessary to match customer requirements and developer resources before
firming requirements and committing to product development. Our work has
shown that successful programs will not commit to product development
until needed technologies are ready to satisfy product requirements. In
other words, technology development is separated from product development.
If technology is not sufficiently mature at the beginning of a product
development program, the program may need to spend more time and money
than anticipated to bring the technology to the point to which it can meet
the intended product*s performance requirements. 5 Testing is perhaps the
main instrument used to gauge technology maturity.

Testing new technologies before they enter into a product development
program, as DOD is doing now by demonstrating the two X- 45A
demonstrators, enables organizations to discover and correct problems
before a considerable investment is made in the program. By contrast,
problems found late in development may require more time, money, and
effort to fix because they may require more extensive retrofitting and
redesign as well as retesting. These problems are further exacerbated when
the product development schedule requires a number of activities to

be done concurrently. The need to address one problem can slow down other
work on the weapon system.

Figure 3 illustrates the timing of the match between a customer*s
requirements and a product developer*s resources for successful and
problematic programs we have reviewed.

5 U. S. General Accounting Office, BEST PRACTICES: Better Management of
Technology Development Can Improve Weapon System Outcomes, GAO/ NSIAD- 99-
162 (Washington, D. C.: July 30, 1999).

Page 7 GAO- 03- 598 UCAV Program's Success

Figure 3: Timing of the Match between Customer Requirements and Resources

During 2002, significant requirements were added to the UCAV program after
the schedule was accelerated by 3 years. This step put the program at
considerable risk because it increased the gap between requirements and
resources. The program added two new requirements* one for electronic
attack capability and one for increased flying range* while reducing a
critical resource, time, to mature key UCAV technologies. As a result, the
Air Force and DARPA anticipated that most of the 15 key technologies,
system attributes, or processes supporting the aircraft*s basic
capabilities would move from all low risk to mostly medium risk of
achieving desired functionality by the time a product development decision
was reached; one would be at high risk.

The UCAV program*s original requirements were difficult to meet because
they posed significant but manageable technical challenges to building an
air vehicle that is, at once, affordable throughout its life cycle, highly
survivable, and lethal. In the last year, both air vehicle and mission Gap
between UCAV Resources and

Requirements Was Increased in 2002

UCAV Requirements Increased During 2002

Page 8 GAO- 03- 598 UCAV Program's Success

equipment requirements were increased. The original requirements called
for a UCAV that would have  a low life- cycle cost, survivable design; 
a mission control station that can fly single or multiple UCAVs at

one time;  a secure command, control, and communications network; 
completely autonomous vehicle operation from takeoff to landing;  off-
board and on- board sensors with which to locate targets; and  human
involvement in targeting, weapons delivery, and target damage assessment.

Once these requirements were established, the UCAV contractor identified
15 technologies, processes, and system attributes the UCAV would have to
possess to meet those requirements. These elements became a way to gauge
the level of knowledge (in terms of risk) that the contractors had. Right
now, technologies that support some of these capabilities, such as
autonomous operation, are not yet mature. We used their risk assessments
and criteria for the 15 technologies, processes, and system attributes to
determine current system integration risk as well as technology risk. We
believe technology readiness levels would have provided a more precise
gauge of technology maturity, but program officials did not provide them.
6 Currently, 10 technologies, processes, and system attributes are

considered to be medium risk by the Air Force and DARPA. Medium risk means
that there is a 30 to 70 percent probability of achieving the desired
functionality for the initial operational UCAV. Moreover, 5 are currently
considered to be high risk, that is, there is less than 30 percent
probability of achieving their functionality. Table 1 provides the current
risk level of the 15 UCAV technologies, processes, and system attributes
for original UCAV objectives.

6 A good indicator of technology risk is technology readiness level, which
is used by NASA and some Air Force programs to define the level of risk
from a technology given its level of demonstration.

Page 9 GAO- 03- 598 UCAV Program's Success

Table 1: Current Risk Level of UCAV Technologies, Processes, and System
Attributes

Characteristics currently at medium risk Characteristics currently

at high risk

 Affordable air vehicle unit/ recurring flyaway cost

 Survivable air vehicle integration

 Weapons suspension and release  Advanced targeting and engagement
process

 Dynamic distributed mission/ vehicle control

 Low observable maintainability

 Advanced cognitive aids integration, mission planning  Adaptive,
autonomous operations

 Force integration, interoperability, and information assurance

 Affordable large- scale software

 Secure, robust communication capability  Coordinated multivehicle
flight/ motion

 Affordable operating and support cost, and integrated vehicle health
management  Mobility, rapid deployment, and

footprint

 Sortie rate, turn time, and ground Operations

Source: DOD.

Originally, the UCAV program was tasked with providing an air vehicle that
would perform both preemptive and reactive SEAD missions against fixed and
mobile targets that are extremely demanding from both a mission and
capability perspective. The reactive mission is more demanding than the
preemptive mission because the UCAV will have less time to find and engage
mobile targets. When DOD decided to accelerate delivery of the initial
UCAVs, the program was relieved of meeting the requirement for reactive
SEAD, making for a better balance between requirements and available
resources. However, requirements were subsequently added that increased
the challenge of matching requirements with resources. These requirements
include an electronic attack mission and increased combat range and
endurance.

 Electronic attack: DOD*s electronic attack mission is currently
performed by the Navy*s aging EA- 6B Prowler aircraft. Electronic attack
confuses enemy radars with electronic jammers. In 2001, the Navy conducted
an analysis of alternatives for replacing the Prowler.

Page 10 GAO- 03- 598 UCAV Program's Success

Air Combat Command planners determined that the UCAV could fill portions
of this role quickly and added the requirement to the program. As
currently structured, the program does not plan to demonstrate electronic
attack technologies on UCAV demonstrator or prototype vehicles before
product development begins. According to program officials, the biggest
additional challenge associated with this change is the integration of
existing electronic attack technologies into a

low observable air vehicle. Program officials are also concerned that
downsizing and repackaging current electronic warfare technology to fit
into a smaller space, with sufficient cooling and power, and incorporating
antennas and other apertures into the low observable signature of the UCAV
may pose additional challenges. Program officials also stated that the
addition of electronic attack adds

uncertainty to overall program costs. It may reduce the number of initial
UCAVs planned for initial production because additional work will be
required to integrate this capability into air vehicles, given the current
schedule and funding.

 Longer range and endurance: According to program officials, Air Force
leadership would like to have a larger UCAV with longer range and greater
endurance than that currently being designed in the X- 45B to perform
strategic lethal strike and nonlethal intelligence, surveillance, and
reconnaissance missions. However, increasing UCAV*s range forced the
program to abandon a key design concept expected to lower operating and
support costs significantly over that of a manned aircraft* one of the
program*s original critical requirements. The initial UCAV concept was a
design that allowed the wings to be detached from the air vehicle and
stored in a crate for up to 10 years, a concept which was expected to
contribute to a greater than 75 percent reduction in operation and support
costs. When needed, the UCAV

could be shipped to the theater of operations, assembled, and readied for
use. Adding range and endurance required redesigning the air vehicle with
fixed or permanently attached wings, in order that the inside of the wings
could be used as fuel tanks. This would allow the UCAV to carry more fuel
and give it the ability to fly farther. Since the wings would no longer be
detachable, the long- term storage approach had to be abandoned.

The schedule for the UCAV program has changed several times during the
pre- acquisition phase. In 2000, the Air Force anticipated that product
development would start in 2007 and initial deliveries would begin in
2011. After several schedule changes, the Air Force set product
development in

2004 and initial delivery of aircraft in 2007. (See table 2.) The net
effect of Schedule Compression

Created Greater Technical and Cost Risks

Page 11 GAO- 03- 598 UCAV Program's Success

the changes was a 3- year reduction in time to mature technologies before
product development. This reduction created the potential for costly and
time- consuming rework in product development since the Air Force would
still be in the process of maturing technologies as it undertook other
product development activities. Moreover, the concurrency that comes with
the schedule changes would have left little room for error.

Table 2: Chronology of Changes to the Air Force UCAV Acquisition Program
Schedule Since 2000 Program strategy as of

End of technology and military utility demonstrations (FY) Start product

development (FY) Initial deliveries (FY) UCAV capabilities

2000 2007 2007 2011 Preemptive SEAD; reactive SEAD

2001 2006 2005 2010 Preemptive SEAD; reactive SEAD

Explanation of change: To meet Air Force expectations for delivering
capabilities to the war fighter earlier than 2011, the product launch date
was moved up by 2 years to 2005 and initial delivery up 1 year to 2010.

2002 2006 2003 2007 Preemptive SEAD

Explanation of change: The schedule was changed by direction of the Office
of the Secretary of Defense to further accelerate delivery of initial
operational UCAVs to the customer. The program attempted to balance this
decision by deferring the most challenging requirements for conducting
reactive SEAD against mobile targets to a future version of UCAV.

Late 2002 2006 2004 2007 Preemptive SEAD;

Electronic attack; Extended range Explanation of change: The timeline was
changed to address added requirements for electronic attack and extended
range. While 1 year was added to the start of product development, the
date for initial deliveries did not change.

Source: GAO presentation of program data.

Under the original schedule, the UCAV program would essentially have 3
more years prior to the beginning of product development to test and
mature technologies. As a result, all 15 of the technologies, processes,
and system attributes would be at low risk by the launch of product
development indicating a match between requirements and resources. By
contrast, under the late 2002 schedule, the program would not have enough
time to mature technologies to a low risk prior to the launch of product
development in 2004. In fact, most technologies, processes, and system
attributes would still be either medium or high risk by the time product
development was launched indicating that requirements exceeded resources.

The overlap of technology development and product development, introduced
by the acceleration of product development, also raised risks for the UCAV
program. The late 2002 schedule allowed less time for discovering and
correcting problems that may have arisen during

Page 12 GAO- 03- 598 UCAV Program's Success

technology demonstrations prior to product development launch.
Importantly, all of the air vehicle military utility demonstrations would
have been completed after the beginning of product development. Under the
original schedule most of these demonstrations would have been completed
prior to the start of product development.

Increasing the overlap of technology development and product development
added risk to the program. Problems found during those demonstrations
might have to be fixed during product development* problems made more
likely given the lower maturity level of the key technologies. Figure 4
shows that the concurrency between technology development and product
development increased by approximately 18 months under the late 2002
schedule* from a 6- month approximate overlap to a 24- month approximate
overlap. Also, this acceleration increased the program risk for the start
of product development from all low to mostly medium risk for the 15
technologies, processes, and system attributes being tracked.

Page 13 GAO- 03- 598 UCAV Program's Success

Figure 4: Effect of Accelerated Product Development Start on Program Risk

As figure 4 indicates, the UCAV technology and product development phases
had been shortened from a plan with little concurrency between technology
and product development to a plan with significant concurrency between the
two. The push to deliver the product sooner compressed the time in which
technologies will be matured and integrated into the UCAV weapon system.
The resulting approximate 24- month overlap between technology and product
development caused by accelerating the beginning of UCAV*s product
development program had the potential to create *late cycle churn,* or the
scramble to fix significant problems discovered late. We have found that
when problems are

Page 14 GAO- 03- 598 UCAV Program's Success

uncovered late in product development, more time and money is required to
rework what is already finished. 7 The Office of the Secretary of Defense
recently restructured the UCAV

program to a joint program structure to meet the needs of the Navy as well
as the Air Force. The Office of the Secretary of Defense cancelled plans
to build the X- 45B prototypes and now anticipates that the joint UCAV
program will focus on a family of vehicles derived from the larger Boeing
X- 45C and Northrop Grumman X- 47B prototypes designs. The details of the
program are still being decided, but it appears likely that while content
will increase, the start of product development will be delayed. This
approach represents a substantial improvement over the late 2002 plan in
that it lowers risks significantly. However, keeping requirements and
resources in balance and funding intact until product development starts
will be a challenge.

The proposed prototypes will be larger than the X- 45A or X- 45B and thus
more capable of supporting requirements for greater combat range and
endurance. Also, both the proposed X- 45C and X- 47B prototypes will have
a larger wing area, allowing them to carry increased payload and internal
fuel. Just as the X- 45B would have been more capable than the X- 45A, the
X- 45C is projected to be more capable than the X- 45B as shown in Table 3

below. We did not obtain specific data on the X- 47B prototype.

Table 3: Comparisons of UCAV Variants X- 45A X- 45B X- 45C

Weight 12,000 lb. 21,000 lb. (approx.) 35,000 lb. Length 26.3 ft. 32 ft.
36 ft. Wingspan 33.8 ft. 47 ft. 48 ft. Payload 1,500 lb. 2,000 lb. 4,500
lb. Ceiling 35,000 ft. 40,000 ft. 40,000 ft. Speed 0.75 Mach 0.85 Mach
0.85 Mach Endurance/ combat radius 450 NM w/ 30 minutes loiter 850 NM w/
30 minute

loiter (w/ added internal fuel)

1100* 1300 NM w/ 30 minute loiter Source: DOD.

7 U. S. General Accounting Office, Best Practices: A More Constructive
Test Approach Is Key to Better Weapon Systems Outcomes, GAO/ NSIAD- 00-
199 (Washington, D. C.: July 31, 2000). Recent DOD Decision

to Restructure Program Can Reduce Risks

Page 15 GAO- 03- 598 UCAV Program's Success

Further, by adopting a design that increases internal space on the air
vehicle, DOD could more readily incorporate electronic attack equipment
and other sensors and avionics. In addition, the plan would reintroduce
competition into the UCAV program by assessing two different designs. This
competition would increase DOD*s ability to pursue the best technical
solution. On the other hand, acquisition cost for the larger air vehicles
are expected to increase as will operating and support costs due to the
abandonment of the storage- in- the- box concept. Also, meeting the Navy*s
need for carrier- based operations could place additional demands on the
air vehicle design. Figures 5 and 6 show illustrations of Boeing and
Northrop Grumman proposed joint UCAV designs.

Figure 5: Computer Rendition of the Boeing X- 45C

Page 16 GAO- 03- 598 UCAV Program's Success

Figure 6: Computer Rendition of the Northrop Grumman X- 47B

In addition, more time will be added under the joint program to conduct
demonstrations by delaying the start of product development by several
years. Some of this added time* up to a year* will be needed to develop
and deliver the new prototypes. As shown in figure 7, delaying the

beginning of product development could reduce technical risks since DOD
would have more time to test prototypes.

Page 17 GAO- 03- 598 UCAV Program's Success

Figure 7: Effect of Delayed Product Development Start on Program Risk

However, these delays may postpone initial operational capability beyond
what DOD and the Congress originally anticipated, which was at the end of
the decade. But recognizing this upfront to put the program on a sounder
footing may be preferable to proposing a higher risk approach* like the
2002 plan* that is more susceptible to unplanned delays.

Drawing on the experience of the UCAV to date as well as other programs,
DOD will face challenges in keeping the requirements for the new joint
design balanced with available resources. One challenge relates to
requirements. As mentioned above, more demands could be made of the air
vehicle to meet the needs of both the Air Force and the Navy. Prior to the
new joint approach, the Navy*s top mission for the UCAV has been
conducting intelligence, surveillance, and reconnaissance. When
considering the Air Force*s missions of reactive and preemptive SEAD and
electronic attack, it is foreseeable that the program will face pressures
to

Page 18 GAO- 03- 598 UCAV Program's Success

meet multiple missions. One approach to meeting this challenge is to delay
the start of product development until resources* such as technology
maturity* are available to meet all requirements. This would delay the
program significantly and could raise funding issues. Alternatively,
adhering to an evolutionary acquisition approach and developing the
different mission capabilities in sequence could meet the challenge, so
that the initial capability can be fielded sooner.

Another challenge relates to funding. Past and present programs have been
susceptible to such funding issues. Moreover, other programs that dwarf
the UCAV program* such as the F- 22 and the Joint Strike Fighter* will be
competing for investment funds at the same time.

We have found in earlier work 8 that although the Office of the Secretary
of Defense provides some funding for advanced technology development
efforts, the military services and defense agencies are ultimately
responsible for financing the acquisition and support of equipment or
items that result from the efforts. At times, however, the military
services have not wanted to fund the transition process. This action
either slowed down the acquisition process or resulted in no additional
procurements. Specifically, military services have not wanted to fund
technologies focusing on meeting joint requirements because those
technologies do not directly affect their individual missions, and there
are specific projects that they would prefer to fund. At the same time,
Office of the Secretary of Defense officials told us that they lack a
mechanism for ensuring that decisions on whether to acquire items with
proven military utility are made at the joint level, and not merely by the
gaining organizations, and that these acquisitions receive the proper
priority.

The UCAV has already experienced some funding challenges. Recently, during
preparations for the fiscal year 2004 budget cycle, the Air Force budget
proposal eliminated all UCAV funding beyond that needed to finish work on
two prototypes already on contract. The Air Force based this

action on its belief that the X- 45B UCAV was too small for the role the
Air Force believed was most needed.

8 U. S. General Accounting Office, DEFENSE ACQUISITIONS: Factors Affecting
Outcomes of Advanced Concept Technology Demonstrations, GAO- 03- 52
(Washington, D. C.: Dec. 2, 2002

Page 19 GAO- 03- 598 UCAV Program's Success

To keep the UCAV program on track, the Office of the Secretary of Defense
stepped in to resolve requirements and funding challenges and maintained a
strong oversight over it. While the Office of the Secretary

of Defense increased the challenge by accelerating the delivery date for
the first UCAVs, it allowed the Air Force to defer the reactive SEAD
requirement and fended off more radical changes to the UCAV*s missions. In
addition, the Office of the Secretary of Defense has taken the lead in
brokering the agreement on the joint program proposal, adding development
time to the proposal and working out a joint effort that could

result in a single design for the Air Force and Navy. Sustaining the role
played by the Office of the Secretary of Defense is likely to be important
to meeting future challenges the UCAV may face.

UCAVs offer a potential for DOD to carry out dangerous missions without
putting lives at stake and to find cost- effective ways of replacing DOD*s
aging tactical aircraft fleet. However, up until recently, pre-
acquisition decisions had collectively increased requirements and reduced
resources, putting the program in a riskier position to succeed. The
decision to create a joint program could make for a better program if the
gap between resources and requirements can be closed. The joint program
faces a challenge in managing the demands of multimission requirements
with the desire to field an initial capability in a reasonable time.
Accepting increased requirements and accelerating fielding at the same
time, as was previously done, will hinder the ability of the joint UCAV
program to succeed. The program also faces the challenge of sustaining
funding support from both services at a time when it is competing against
other large aircraft investments. Regardless of which direction the new
program takes, the role played by the Office of the Secretary of Defense
will

continue to be instrumental in helping to negotiate requirements, to
assure the right resources are provided, and to make further difficult
tradeoff decisions throughout the program.

We recommend the Secretary of Defense develop an acquisition approach for
the joint UCAV program that enables requirements and resources to be
balanced at the start of product development. This approach should provide
mechanisms for brokering the demands of multiple missions, for ensuring
that the product developer maintains a voice in assessing the resource
implications of requirements, and for preserving the integrity of
evolutionary acquisition. Reinstating the use of technology readiness
levels may be very valuable in facilitating necessary tradeoffs.
Conclusion

Recommendations for Executive Action

Page 20 GAO- 03- 598 UCAV Program's Success

We also recommend that the Secretary formalize the management role
performed by his office and the attendant authority to perform that role;
ensure that the services are fully involved in the process; and work to
develop an efficient approach to transitioning the UCAV from DOD*s
technology development environment to the services* acquisition
environment so the needs of the war fighter can be met more quickly.

DOD provided us with written comments on a draft of this report. The
comments appear in appendix I. DOD provided separate technical comments,
which we have incorporated as appropriate.

DOD concurred with our recommendation that the Secretary of Defense
develop an acquisition approach for the joint UCAV program that enables
requirements and resources to be balanced at the start of product
development. It has directed the formation of a Joint Systems Management
Office to define near- term requirements and to conduct robust operational
assessments. DOD partially concurred with our recommendation that the
Secretary

formalize a management role performed by his office and the attendant
authority to perform that role; ensure that the services are fully
involved in the process; and work to develop an efficient services*
acquisition environment so the needs of the war fighter can be met more
quickly. DOD noted that the Secretary is organizing the management
function as he deems suitable. DOD did state that the department*s UAV
Planning Task

Force would continue to provide oversight over all DOD UCAV program
activities. We believe this is important because it was this organization
that was instrumental in refocusing the DOD UCAV effort into a joint
program that we believe will significantly improve the probability of
successfully fielding UCAVs.

To achieve our objectives we examined Air Force UCAV program solicitations
and agreements, the demonstration master plan, trade studies, technology
demonstration plans and results, status of critical technologies, plans to
further enhance maturity of critical technologies, and plans to move UCAV
to the Air Force for product development. We interviewed DARPA and Air
Force program managers and technical support officials at DARPA program
offices in Arlington, Virginia, and the Air Force*s Research Lab and
Aeronautical Systems Center at Wright Patterson Air Force Base, Dayton,
Ohio, to document current development efforts and the maturity status of
critical technologies and other attributes. Agency Comments

and Our Evaluation Scope and Methodology

Page 21 GAO- 03- 598 UCAV Program's Success

To determine options that may be available to UCAV program managers in
making changes to requirements or resources, we examined the program*s
risk assessments of its 15 technologies, processes, and system attributes
to identify risk associated with beginning product development at
different points in time. We interviewed Air Force Air Combat Command
officials at Langley Air Force Base, Virginia, concerning UCAV
requirements, and air staff officials in Arlington, Virginia, concerning
program objectives and resources. We also interviewed a number of
officials from the Office of Secretary of Defense having responsibility
for UCAV oversight and funding. We conducted our work from February 2002
through May 2003 in

accordance with generally accepted government auditing standards. We are
sending copies of this report to the Secretary of Defense, the Secretaries
of the Air Force and Navy, the Director of the Office of Management and
Budget and other congressional defense committees. We will also provide
copies to others on request. In addition, the report will be available at
no charge on the GAO Web site at http:// www. gao. gov.

Please contact me at (202) 512- 2811 if you or your staff has any
questions concerning this report. Key contributors to this report were
Mike Sullivan, Jerry Clark, Matt Lea, Kris Keener, Travis Masters,
Cristina Chaplain, Lily Chin, Bob Swierczek, and Maria- Alaina Rambus.

Paul Francis Director, Acquisition and Sourcing Management

Appendix I: Comments from the Department of Defense

Page 22 GAO- 03- 598 UCAV Program's Success

Appendix I: Comments from the Department of Defense

Appendix I: Comments from the Department of Defense

Page 23 GAO- 03- 598 UCAV Program's Success (120125)

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