Unit Costs Surge for MQ-8 Fire Scout Drone

The cost increases for the Navy's MQ-8 Fire Scout unmanned chopper and the Air Force's Joint Precision Approach and Landing System may put the programs at risk of cancellation.

The Navy’s drone helicopter, the Air Force’s precision-landing system and the Army’s digital radio for ground troops are among the Pentagon’s weapons programs whose unit costs surged in the past year.

The Navy’s MQ-8 Fire Scout unmanned chopper developed by Northrop Grumman Corp. and the Air Force’s Joint Precision Approach and Landing System developed by Raytheon Co. had “critical” cost overruns of more than 50 percent over original projections, according to a summary of the Defense Department’s latest Selected Acquisition Reports.

The size of the increases triggered a law requiring congressional notification and may put the programs at risk of cancellation. Frank Kendall, the Pentagon’s top weapons buyer, will make a decision whether to re-certify the acquisition efforts “no later than June 17, 2014, as required by law,” according to the document released Thursday.

The Navy has already nixed plans to buy 17 more Fire Scouts over the next five years as part of its budget request for fiscal 2015, which begins Oct. 1. The move left the future of the program unclear.

Warren Comer, a spokesman for Falls Church, Va.-based Northrop, said Fire Scout has proven to be “highly successful” program. The company since 2011 has made three significant upgrades to the platform, including endurance, weapons and radar enhancements to support various types of missions, he said.

“These upgrades, originally contracted as separate rapid deployment efforts, are now being incorporated into the baseline program of record,” Comer said in an e-mail. “This allows the Fire Scout system to spend greater time supporting missions with fewer aircraft.”

In other acquisition efforts, the Navy’s E-3 Sentry Airborne Warning and Control System Block 40/45 Upgrade developed by Boeing Co. and the Army’s Joint Tactical Radio System’s Handheld, Manpack and Small Form Fit program developed by General Dynamics Corp. had “significant” overruns, according to the report.

The law, known as Nunn-McCurdy, was enacted in 1982 to give lawmakers a better sense of problems with weapons procurement, though rarely is the reporting process used to actually cancel programs.

The MQ-8 Fire Scout is an unmanned helicopter developed under the Vertical Takeoff and Landing Tactical Unmanned Aerial Vehicle program, or VTUAV. It’s designed to fly from warships and provide troops with surveillance and fire support.

The Navy plans to buy a total of 126 of the aircraft, including seven prototypes and 119 production models, for an overall cost of $3.47 billion — a 24-percent increase from the original estimate of $2.79 billion, according to the Pentagon report. The price tag increased despite a planned reduction in aircraft, from 177 to 126, or 51 vehicles.

The increase in unit cost was “due to an increased requirement for warfighter capabilities of the system and an overall reduction in the total air vehicle quantities being procured,” from 177 to 126, or 51 aircraft, the document states. Specific unit cost figures weren’t given, but based on the figures above, they increased more than 70 percent, from about $15.7 million per aircraft to about $27.5 million per aircraft.

In its fiscal 2015 budget request, the Navy “made a decision to streamline the maritime Intelligence, Surveillance and Reconnaissance portfolio by combining previously developed MQ-8 Fire Scout rapid deployment capabilities (endurance upgrade, radar, and weapons) into the Program of Record (POR),” Jamie Cosgrove, a Navy spokeswoman, said in an e-mail. “The Department determined that transitioning these capabilities was a cost-effective investment to support LCS missions,” she said, referring to the Littoral Combat Ship.

The Navy stopped production of the MQ-8B after buying 30 of the aircraft with the Schweizer 333 airframe, according to a separate Pentagon test report from earlier this year. The service wants to switch to the Bell 407 airframe for the MQ-8C, another version of the drone based in part on requirements from U.S. Special Operations Command.

While the service has successfully integrated the Advanced Precision Weapon Kill System, which converts unguided Hydra rockets into precision-guided missiles, on the Fire Scout, “additional sea-based testing is required before the Navy can field a sea-based, weaponized unmanned aerial system,” the test report states.

With more than 40 Fire Scouts in the inventory or on order, the Navy has indicated it has enough of the aircraft to support a reduced fleet of Littoral Combat Ships. Due in part to automatic budget cuts known as sequestration, the service cut the number of the surface vessels it planned to buy to 32 from 52.

(Story was updated to correct overall cost increase, and add unit cost figures and quotes from Navy spokeswoman beginning in the 10th paragraph.)

Associate Editor Brendan McGarry can be reached at brendan.mcgarry@monster.com.

About the Author

Brendan McGarry
Brendan McGarry is the managing editor of Military.com. He can be reached at brendan.mcgarry@military.com. Follow him on Twitter at @Brendan_McGarry.