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Overtaxed

La Jolla–based General Atomics Aeronautical Systems, Inc., owned by La Jolla millionaires Linden and Neal Blue, has made millions of dollars on its best-known product, the Predator unmanned aerial vehicle, which has seen service over battlefields from Bosnia to Afghanistan. But the company’s lucrative franchise may be threatened by a recent review by the U.S. Government Accountability Office. The review was conducted after defense contractor Lockheed Martin, which had partnered with General Atomics to sell a specially outfitted version of the Predator to the Navy, protested the $1.1 billion contract’s award to competitor Northrop Grumman, maker of the Global Hawk, another unmanned aerial vehicle.

On August 8 the Government Accountability Office denied Lockheed’s protest, citing in part a long list of performance problems at General Atomics. According to the report, the choice of General Atomics, which would have done about half the work under Lockheed Martin’s proposal, “was determined to represent a high risk” that the project would come in late and over budget. Citing a December 10, 2007 Army evaluation of another Predator contract, the report said that General Atomics “has resisted hiring adequate engineering and technical staff to address all of the tasks they are currently contracted to perform.” It added that the company “had not met contracted…delivery schedules” and that “senior management continues to obligate the company without fully reviewing and understanding the current workload and commitments.”

The report concluded that General Atomics’ “engineering staff appears to be technically [competent], but in most cases are not empowered at the appropriate levels to make the necessary decisions to push the task forward in a timely manner to maintain schedule.” As a result, the review said, “as the program continues, and [General Atomics] takes on additional contracts, we are concerned about [General Atomics’] ability to successfully manage and deliver products to all customers on time and within cost.”

General Atomics issued a brief written response to the Government Accountability Office’s assertions, saying, “we don’t see the need to prolong the discussion.” The statement added that the company’s “record of delivering sophisticated and combat-proven aircraft to the war fighter speaks for itself.”

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La Jolla–based General Atomics Aeronautical Systems, Inc., owned by La Jolla millionaires Linden and Neal Blue, has made millions of dollars on its best-known product, the Predator unmanned aerial vehicle, which has seen service over battlefields from Bosnia to Afghanistan. But the company’s lucrative franchise may be threatened by a recent review by the U.S. Government Accountability Office. The review was conducted after defense contractor Lockheed Martin, which had partnered with General Atomics to sell a specially outfitted version of the Predator to the Navy, protested the $1.1 billion contract’s award to competitor Northrop Grumman, maker of the Global Hawk, another unmanned aerial vehicle.

On August 8 the Government Accountability Office denied Lockheed’s protest, citing in part a long list of performance problems at General Atomics. According to the report, the choice of General Atomics, which would have done about half the work under Lockheed Martin’s proposal, “was determined to represent a high risk” that the project would come in late and over budget. Citing a December 10, 2007 Army evaluation of another Predator contract, the report said that General Atomics “has resisted hiring adequate engineering and technical staff to address all of the tasks they are currently contracted to perform.” It added that the company “had not met contracted…delivery schedules” and that “senior management continues to obligate the company without fully reviewing and understanding the current workload and commitments.”

The report concluded that General Atomics’ “engineering staff appears to be technically [competent], but in most cases are not empowered at the appropriate levels to make the necessary decisions to push the task forward in a timely manner to maintain schedule.” As a result, the review said, “as the program continues, and [General Atomics] takes on additional contracts, we are concerned about [General Atomics’] ability to successfully manage and deliver products to all customers on time and within cost.”

General Atomics issued a brief written response to the Government Accountability Office’s assertions, saying, “we don’t see the need to prolong the discussion.” The statement added that the company’s “record of delivering sophisticated and combat-proven aircraft to the war fighter speaks for itself.”

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I can only assume that the December 2007 Army contract review was done under the umbrella of the Boeing-SAIC Future Combat Systems initiative, designed to provide a comprehensive re-making of Army combat brigades into brigade combat teams (BCT) armed with remote sensors, unmanned weapons systems, and complete computer integration for seamless training, strategic deployment, tactics, and logistics.

Full implementation and roll-out on the FCS BCT timeline is not before 2015. Individual FCS systems are now being field-tested overseas now.

Any concerns regarding General Atomics' ability to manage and deliver on multiple military/naval contracts go directly to the heart of arguments regarding this nation's ability to effectively manage the two major overseas commitments we have now in Iraq and Afghanistan, as well as this nation's future preparedness to meet additional global strategic demands, homeland security concerns, and catastrophic incident complexes of national significance under the National Response Framework as they may arise.

If memory serves, Iraq and Afghanistan are two hot topics in the recent days of the presidential campaign...

For an unclassified overview of FCS BCT ("Approved for public release; distribution is unlimited"):

https://www.fcs.army.mil/news/pdf/FCS_White_Paper_APR08.pdf

Sept. 12, 2008

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