Pentagon IG: BAMS suffering from lack of oversight

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The US Navy is mishandling its new high-altitude surveillance unmanned air vehicle programme, says a Pentagon inspector general (IG) report, after failing to validate more than $329 million in bills from Northrop Grumman and being unable to reach a work-sharing agreement with the US Air Force.

If the problems persist, "the BAMS program is at risk for increased costs, schedule delays and not meeting the needs of the war fighter," the IG says.

Northrop won the $1.2 billion Broad Area Maritime Surveillance contract in April 2008 with the offering of a navy-specific version of the USAF's RQ-4 Global Hawk high-altitude, long-endurance UAV. A revision in February 2009 took the deal's total value to $1.8 billion. The IG estimates the eventual value of BAMS at $19 billion, with 40 UAVs to be deployed at five bases around the world.

As both services use the same Global Hawk airframe, manufactured in the same factory, BAMS is expected to share more than $150 million in manufacturing equipment. But according to the report, dated 23 December 2010, the US Naval Air Systems Command (NAVAIR) has still not finalised a property-sharing agreement, which should have covered more than 5,000 specialised tools and test equipment.

NAVAIR contracting officials and programme managers also failed to properly manage and review 39 invoices from Northrop prior to payment, approving bills for $329 million without any serious accounting detail, the IG says. Bills for $206,000 for unallowable travel expenses also slipped thorough the cracks and were paid, according to the report.

The root of many of the problems is that BAMS contracting officials did not comply with federal and defence policies, nor were they properly trained, the IG says.

Industry sources say some of the information in the report is outdated by months, or even years in some cases. While the IG report cites a lack of training for NAVAIR contract managers, the navy says contracting officials have received their training as well as additional training in December.

The IG recommends NAVAIR speeds cost audits for spending already incurred and conducts an administrative review of BAMS contracting officials, as well as completing the shared-cost agreements with the air force and Northrop.

Northrop, which faced down complaints from various Pentagon procurement officials last year that the Global Hawk programme was too pricey, says it is already working with both services to bring down costs and manage BAMS through the current system development and low-rate production phase.