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Watchdog faults U.S. Navy approach to building unmanned carrier planes

WASHINGTON (Reuters) - The Government Accountability Office on Thursday faulted the U.S. Navy's plan to spend $3.7 billion to develop, build and field a new unmanned carrier-based warplane without subjecting the program to a rigorous review until 2020.

In a report for lawmakers, the congressional research agency criticized the Navy's plan to skip a "Milestone B" review until after initial deployment of the plane in 2020, arguing that this strategy would limit Congress' ability to oversee the program and hold it accountable for schedule, cost and performance.

Major acquisition programs are required by the Pentagon to undergo a comprehensive review after its preliminary design has been approved. At that "Milestone B" review, senior defense officials look at the military requirements and independent cost estimates for the program, and certify that it has reasonable cost and schedule estimates.

In this case, the Navy has argued that it can put off the Milestone B review until after 2020 because the Unmanned Carrier-Launched Airborne Surveillance and Strike (UCLASS) plane is a technology-development project.

Lockheed Martin Corp, Northrop Grumman Corp, Boeing Co and privately-held General Atomics have all expressed interest in bidding for the UCLASS program. The Navy has awarded the four companies preliminary contracts for early designs and plans to issue a formal request for proposals in 2014.

The Navy plans to deploy from 6 to 24 unmanned planes for use on up to four aircraft carriers during the initial phase of the UCLASS program. It would use the planes mainly for surveillance and reconnaissance missions, especially at night, complementing the manned fighters on board the carriers.

The GAO report said the Navy's approach would exempt the program from cost-growth thresholds and periodic reports on its cost, schedule and performance, giving lawmakers less oversight.

The report recommended requiring the Navy to hold a Milestone B review, and suggested lawmakers should limit funding for the program if the Navy refuses to comply.

It said it had suggested the Milestone B review in a draft report sent to the Navy, but Navy leaders rejected that recommendation.

"The system development and early production activities included in the Navy's UCLASS acquisition strategy go well beyond technology development and requirements refinement, and thus warrant oversight commensurate with a major weapon system development program," the report said.

The GAO report said the program also faced possible cost increases and schedule delays because the Navy was not budgeting the full amount needed for the system through 2020. The agency also noted the Navy planned to award a contract in eight months, when such contract awards normally took 12 months.

It said the program was also highly dependent on other weapons systems and software being developed for other programs, which heightened the risk of delays.

(Reporting by Andrea Shalal-Esa; Editing by Philip Barbara)

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