Under scrutiny: soaring costs not likely to slow down global hawk.

• Author: Erwin, Sandra I.
• Position: UNMANNED AVIATION

The Global Hawk spy aircraft has become--in the eyes of its Defense Department supporters--a shining example of leap-forward technology. The aircraft also has emerged as a cautionary tale for what government auditors consider a high-risk and costly approach to building weapon systems.

At the same time that the Pentagon was enthusiastically endorsing Global Hawk in its quadrennial defense review in February, congressional investigators were questioning why the aircraft was 35 percent over budget and were recommending that the Defense Department slow down the program.

A key concern for the Defense Department during the past year has been whether Global Hawk would breach cost ceilings set in the so-called Nunn-McCurdy legislation. That law requires the Pentagon to justify to Congress why it needs to continue to buy a system whose price tag is anywhere from 15 percent to 50 percent higher than previous estimates.

In 2005, the Air Force informed the Defense Department that Global Hawk was running 18 percent above its projected cost. The Government Accountability Office--in response to a query from Sen. John Warner, R-Va., chairman of the Armed Services Committee--concluded that the aircraft in fact was 31 percent more expensive than its original estimate. The Pentagon swiftly rejected GAO'S findings, arguing that the agency had miscalculated the costs by including sensor upgrades and the redesign of the airframe as part of the price.

"The 31 percent increase is incorrect, because it includes retrofit costs that are not part of the approved acquisition program," says a Pentagon spokeswoman. The actual increase, the department calculates is 22.5 percent.

Most recently, GAO revised its costs projections for Global Hawk, citing a 35 percent jump from a March 2001 prices of $60.9 million to $82.3 million in January 2006. Each Global Hawk system includes the aircraft, ground stations and spares.

The Pentagon, meanwhile, announced in April that Global Hawk is one of 25 military systems whose unit cost increased by more than 50 percent from their original estimate. The program, nonetheless, is not technically a Nunn-McCurdy breach. A waiver in the law allows the Defense Department to measure its costs from a revised base estimate, rather than the original.

According to the updated data released by the Pentagon, Global Hawk total program costs increased from $6.5 billion to $7.8 billion. The added costs are attributed to labor, accounting changes, a...