Northrop Grumman Goes Two for Two

29 September 2008 (Last Updated September 29th, 2008 18:30)

Richard B Gasparre takes a look at the US Navy's choice of the Northrop Grumman UAV.

Northrop Grumman Goes Two for Two

Maybe procurement protests aren't such a bad thing. If nothing else, they illuminate issues that otherwise get swept away with the tide.

Last month, The US Government Accountability Office (GAO) rejected a protest by Lockheed Martin over the US Navy's selection of Northrop Grumman's RQ-4N Global Hawk UAV for the broad-area maritime surveillance (BAMS) mandate. Lockheed Martin had teamed with the Aeronautical Systems division of General Atomics (GA-ASI) to compete for the BAMS contract; the LockMart / GA-ASI candidate was the Mariner, a navy-oriented version of GA-ASI's MQ-9 Reaper.

By permitting Northrop to begin the system design and development phase of BAMS, worth $2.3bn, the ruling effectively makes the Global Hawk the US military's standard for the UAV category that the USAF calls HALE (high altitude, long endurance). Although BAMS does not denote the same qualities as HALE, both categories generally require operations in the tropopause (50,000-70,000ft altitude) layer, also known as the tier 2+ layer for UAV classification purposes.

"Australia will now probably take the US Navy's cue and purchase the RQ-4N."

The GAO's decision has international ramifications that should further reinforce Northrop's control of the HALE niche for UAVs – regardless of institutional boundaries. In the naval arena, Australia will now probably take the US Navy's cue and purchase the RQ-4N. Moreover, the high degree of commonality between the ground-centric and maritime versions should allow Northrop to reduce unit costs for the Global Hawk portfolio across the board. International beneficiaries include not only the Australian Navy, but also the German Air Force, which is buying the Euro-Hawk version for signals intelligence. In turn, pan-national interoperability makes the Global Hawk the front-runner for Nato's potential acquisition of ground surveillance UAVs featuring the new MP-RTIP radar.

GAO finding sheds light on Gates's criticism of USAF

Aside from the performance scorecard (which is almost always the most important criterion in Navy procurement decisions), the GAO also examined past procurement performance (the Navy's second most important criterion) and found that the Global Hawk package also provided a meaningful advantage. In particular, the GAO criticised GA-ASI for significant problems across multiple contracts to supply Predator, Reaper and Gnat UAVs along with related ground control stations, to the US Air Force and Army.

The GAO report stated that the Navy, in its initial decision, had found very consistent customer dissatisfaction with GA-ASI's contract execution, especially in managerially intensive functions such as allocating workload, staffing projects and executing systems integration tasks. These shortcomings almost certainly contributed to the general UAV delivery problems highlighted by Defence Secretary Robert Gates in his criticism of USAF leadership earlier this year.

The BAMS decision marks the second time this year that the GAO has ruled in favour of Northrop against a competitor. The first case was the battle over the USAF's KC-X tanker mandate, in which the EADS / Northrop team unseated longstanding incumbent Boeing.

"The BAMS decision marks the second time this year that the GAO has ruled in favour of Northrop Grumman against a competitor."

Although the GAO's decision in the tanker case officially reopened the competition, the appeals ruling effectively ratified Northrop's advantage in that it upheld the USAF's emphasis on payload as long as it was made specific and permitted the USAF to extend the bidding deadline rather than restart the competition from scratch. When issued, the new 1 October deadline implied a revision period of a few weeks – hardly enough time to rebid a handheld UAV, much less a tanker.

In light of the government's handling of the tanker affair, LockMart's decision to protest the BAMS decision was an interesting choice, to put it mildly. As it turned out, Boeing at least had justifiable grounds for complaint. In contrast, LockMart's BAMS protest applied the old legal trick of 'belt and braces' reasoning: it both contested the Navy's findings and claimed that GA-ASI had substantially improved its contract fulfilment abilities. Ultimately, the GAO decision not only closes LockMart out of the US Navy's UAV space but also reinforces the notion that top-grossing US defence contractor may be losing its edge – as suggested by its problems in executing the Navy's littoral combat ship programme.

Northrop nails Navy niche

With the BAMS mandate in pocket, Northrop has clearly become the UAV incumbent for the Navy, at least in terms of shipping operations. Northrop's RQ-8A Fire Scout robotic helicopter is the Navy's vertical take-off UAV (VTUAV), which essentially overlaps the tier 1 / tier 2 altitude layer threshold. Given that Northrop is cooperating with General Dynamics Robotics in other UAV niches, its traditional big competitors, LockMart and Boeing, are apparently on the outside looking in as far as the Navy is concerned.