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Budget Watch 

Experts See No Logic in Air Force Mothballing New Global Hawks 

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By Sandra I. Erwin and Dan Parsons 

Buried in a long list of Pentagon budget proposals for the next five years is the Air Force’s recommendation to retire a fleet of 18 brand-new Global Hawk Block 30 unmanned surveillance aircraft. Four of them haven’t even been delivered yet, and are already destined for the boneyard.

Air Force leaders have defended their decision, contending that the $67 million apiece Global Hawk has become too pricey, and that the Cold War era U-2 spy aircraft can still do the job. Further, they insist that axing the Block 30 version of the Global Hawk hardly means the end of the program, and several other models will be produced for the Air Force, the Navy and for foreign allies.

The termination of Global Hawk Block 30 is estimated to save the Air Force $2.5 billion over the next five years.

Although the Block 30 termination is a relatively trifling line item in the much bigger picture of Pentagon procurement decisions, experts are universally puzzled by the decision. Everyone gets that budgets are tight, but they still question the rationale.

Among the more mystifying questions: Why would the Air Force choose to retire a fleet of new aircraft at a time when its purported number-one equipment challenge is the aging of its fleet? How is it not a waste of taxpayer dollars to retire aircraft that are only a year or two old in which the United States invested at least a billion dollars? And how to explain that only 18 months ago Pentagon officials went to Capitol Hill and vehemently defended the aircraft as an essential weapon that Congress needed to fund even though it has huge cost overruns?

“It does not make a lot of sense,” said retired Air Force Lt. Gen. David Deptula, who oversaw intelligence programs. “Yes, Global Hawk had budget overruns,” he said. But the Air Force already has sunk huge amounts of money into the program and now it is mothballing that aircraft instead of trying to make productive use of the investment, he said. “I understand that these are tough decisions during tough budget times,” Deptula added. The four-decades-old U-2 is still capable, he said. But just two years ago the Air Force had a solid plan for transitioning all the U-2 missions to Global Hawk. Deptula at the time spearheaded an agreement with the Navy to share bases, training and logistics resources between the Global Hawk and the Navy’s variant, which is called BAMS (broad area maritime surveillance).

Deptula said the call ultimately came down to a “value judgment” as it is hard to see how flying the U-2 would be less costly than flying the Global Hawk.

Global Hawk two years ago was the poster child for runaway cost overruns in Pentagon programs. It was nearly terminated under the Nunn-McCurdy legislation that requires the Pentagon end programs that are more than 25 percent over budget. Defense officials went to great lengths to defend the program and convince Congress to keep it going. That was just 18 months ago, Deptula noted. “So it seems a little odd that in the short time since it became expendable.”

Peter W. Singer, director of the Brookings Institution’s 21st Century Defense Initiative and an unmanned aircraft expert, said these issues have to be viewed in perspective.

It is possible that the Air Force’s analysis in fact did show that the Global Hawk was more expensive to operate than the U-2, even though unmanned aircraft are supposed to save money as they do not require a pilot in the cockpit.

“It is not a law of physics that unmanned systems have to be cheaper than manned, it’s just a tendency,” Singer wrote. “In this case, the sensors, rather than the fact that it is unmanned seem to be what’s driving most of the problem, both in costs and performance,” Singer added. “It was getting to the point of costing more but performing less.”

Supporters of the program, rather than dwell on the 18 Global Hawks that are going away, should ponder the larger implications of the Air Force’s decision, Singer noted.

“I think the main lesson here is that an unmanned program can suffer from all the same problems that have troubled our acquisitions process overall,” he stated. “It too often cooks up that awful witches brew of over promise, underperformance, requirements creep, then extended timelines, escalating costs, spiraling into fewer platform purchases, Nunn McCurdy breaches and so on.”

An industry analyst pointed out that, like many other Pentagon budget choices, this one is about the “colors” of money. Both the Global Hawk and the U-2 serve the same purpose — taking pictures from high altitude — but each creates different budgetary repercussions, said Richard Aboulafia, of the Teal Group, a Virginia-based industry research firm.

The competition between the Global Hawk Block 30 to the U-2 is one between up-front versus back-end costs, he said. “Almost certainly, the Global Hawk would be more cost efficient to operate and maintain,” Aboulafia said. “If you retire those U-2s, you save on whatever it takes to keep them going. But that would be a savings from your [operations and maintenance] budget” and the Air Force now is more pressed to cut procurement spending. Cancellation of the program saves future procurement dollars.

The Air Force already owns the fleet of 33 U-2s and only has to pay to staff the program. The U-2 has an advantage currently because it is a manned system and autonomous drone technology has not caught up to the capabilities of a human pilot, Aboulafia said. Though training and paying pilots adds cost to the program, that expense is drawn from operational, not from procurement accounts.

On the flip side, he added, the Global Hawk Block 30 has three times the range and flight endurance of the U-2, and the advantages of flying without a pilot.

With Defense Department procurement budgets expected to ebb from about $130 billion to $99 billion per year, huge capital outlays are going to become tougher to justify, Aboulafia said.

A similar color-of-money conundrum is seen in the Air Force bomber fleet. The B-52 bomber, introduced in 1955, is still in service even after the Air Force sought to build modern alternatives such as Northrop Grumman’s stealthy B-2 bomber and Rockwell’s B-1 Lancer. The Air Force plans to fly the B-52 through 2040. Aboulafia called that an “extreme case.”

The 14 Block 30s the Air Force already owns will go into storage, along with the four new ones it will purchase in fiscal year 2013. A total $1.2 billion in brand new airplanes will be mothballed in favor of retooling the U-2, a design that was introduced in 1957. “You can’t even think about the up-front costs of having bought those assets, it’s in the past,” said Aboulafia. “If the Air Force had continued with the program, it still would have had to purchase enough Global Hawks to replace U-2s, which is huge procurement spending.”

Air Force Chief of Staff Gen. Norton Schwartz said he stands by the decision. “In a limited budget circumstance that we face, we have to compare what is the best value to the armed forces and obviously to the taxpayer. … And in this particular instance, the U-2 was the better bet.”

The manufacturer of the Global Hawk, Northrop Grumman Corp., is still under contract to produce four more Block 30 models. The company has not yet received any “stop work” orders, said a spokesman.

“Northrop Grumman is disappointed with the Pentagon’s decision, and plans to work with the Pentagon to assess alternatives to program termination,” said a company statement. “The aging U-2 program, first  introduced in the 1950s, places pilots in danger, has limited flight duration and provides limited sensor capacity.”

The company still anticipates a sizeable Global Hawk business from future Block 40 orders by the Air Force, the Navy’s BAMS and a new model to be purchased by the NATO alliance.       
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