The average cost for one of Northrop Grumman’s Global Hawk has risen more than 25 percent because the U.S. Air Force cut the order by about 14 percent in its 2012 budget request.
After reviewing the $11.1 billion Global Hawk programme last year, the Air Force said the per-plane cost had increased 11 percent to $100.8 million since the programme began in 2000. Michael Donley, the Air Force secretary, didn’t give the new cost per plane in his letter to Congress, dated April 6.
“The primary driver of this average procurement unit cost increase is the fiscal year 2012 budget decision to decrease the Global Hawk procurement quantities from 77 to 66 aircraft,” Donley said. More details will be provided in the so-called selected acquisition report to be released soon, Donley said.
The primary reason for the cost increase is the “reduction of Block 40 quantities from 22 to 11 aircraft due to budget pressures,” Northrop spokesman Randy Belote said in an e-mail. Block 40 refers to the current batch of drones being bought by the Air Force.
Other factors include the addition of “two sensor depot centres, increased spares, and initial operational test and evaluation costs,” Belote said. The cost increase of more than 25 percent would trigger the 1982 Nunn-McCurdy law, which requires the Pentagon to certify to Congress the programme’s importance to national security and to justify why it shouldn’t be cancelled.
Source: Bloomberg