US demand is growing for sea-based “contractor-owned, contractor-operated” (COCO) intelligence services from uncrewed air system (UAS) developers, while demand for land-based services has waned, according to an industry executive.
Chris Mallon, Textron Systems vice-president for tactical mission systems, says his company has been performing intelligence, surveillance and reconnaissance (ISR) missions under COCO deals for the US Navy (USN) since 2012, when it started with land-based operations.
While Textron has recently seen less demand for land-based COCO ISR services, the company’s maritime services work has expanded from supporting one ship in 2018 to now operating from seven, Mallon told FlightGlobal on 8 April at the Sea-Air-Space conference near Washington DC. “We’re seeing the maritime side growing,” Mallon adds.
Contractors on COCO ISR service deals perform a range of aerial intelligence-gathering functions, including supplying aircraft and personnel, preparing equipment for deployment, installing kits on ships and operating the aircraft. Textron Systems provides some services with its Aerosonde UAS.
Once Textron Systems’ UAS are aboard ships and declared operational, Mallon says the company is on call day and night. Operations are usually scheduled, but Mallon says it is available for urgent missions, with a 30min call-out target.
Textron’s COCO services are currently operational on two USN Expeditionary Sea Bases, two Arleigh Burke-class guided-missile destroyers, and two Littoral Combat Ships, with a third being outfitted.
The Pentagon’s demand for COCO ISR services boomed from 2001-2021 during counter-insurgency efforts in Iraq and Afghanistan. The US military needed more ISR hours than could be fulfilled by its own unmanned fleet, notes Brandon Tattersall, principal analyst of Elemental Strategic Consulting.
Tattersall says so-called “Group 2”-category UAS performed a variety of ISR missions in Iraq and Afghanistan, such as conducting “pattern of life” analyses over specific areas, overseeing ground operations, providing route reconnaissance and inspecting targets of interest.
But COCO ISR services have been greatly reduced on land since the US drawdown from Afghanistan that culminated in 2021. Due to UAS range limitations and the reduction of ground forces, there are fewer locations from which to base the aircraft, and fewer troops to support them.
Only four or five unclassified land sites remain active, Tattersall says, compared to more than 30 in 2020.
In the maritime domain, the US Naval Air Systems Command (NAVAIR) is running several sites aboard USN ships. Tattersall says these are primarily operated by Textron Systems and Boeing subsidiary Insitu.
Additionally, the US Coast Guard (USCG) held a COCO ISR services competition for both Group 2 UAS and for more capable Group 3 types, the service said on 9 April. That programme is in the source-selection process.
Despite fewer COCO ISR services contracts available since the Afghanistan drawdown, opportunities remain lucrative. Mallon says each task order is worth $10-50 million.
While these contracts can be financially rewarding, they do include risk.
Matthew Graczyk, chief executive of autonomous aircraft developer Pterodynamics, says COCO profit margins can be large but that penalties for failing to perform can also be severe. Similarly, Mallon says COCO ISR contractors can be penalised 5-15% of a contract’s value if mission-reliability rates fail to meet specified thresholds.
Despite risks, UAS developers remain attracted to COCO opportunities.
Ron Tremain, executive director of Coast Guard affairs at Airbus Helicopters Inc, says COCO is advantageous to industry because it affords opportunities to provide immediate operations to users without the constraints common with formal acquisition programmes. COCO, he adds, can allow a chance to rapidly field new technologies, and the contracts can enable quick growth as operations sometimes expand swiftly.
Mallon says Textron Systems’ ability to rapidly integrate payloads allows it to excel in COCO work.
“You have to be safe to fly… but once you get that safety case made, we can move relatively quickly,” he says.
A NAVAIR request for information issued in April 2023 announced an initiative to broaden industry partnership on COCO services. The request also revealed the service’s intent to procure, on a competitive basis, COCO services necessary to provide UAS ISR services for the USN and US Marine Corps’ small tactical UAS programme office.
Insitu and Textron Systems are vying for the requirement, offering land- and sea-based ISR services under fixed-price contracts that would expire in March 2026. Insitu did not respond to a request for comment.
Shield AI is also likely competing for future COCO ISR services awards from the USN or USCG. Brandon Tseng, Shield AI co-founder and president, says the company has performed thousands of hours of COCO ISR services. On 4 April, it flew 44 sorties of its V-Bat tail-sitting UAS, many of which were during COCO operations, Tseng adds.
“We want to put every V-Bat on a ship,” he says. ”If those programmes are about putting V-Bats on ships, then we are probably pursuing that.”
