For proposed spending on the MQ-9 Reaper and other unmanned systems in Fiscal Year 2017, click here.
For our Defense Spending on Drones project, click here.
By Dan Gettinger
The MQ-9 Reaper is a medium-altitude long-endurance surveillance and strike drone. General Atomics Aeronautical Systems, Inc., the primary contractor for the program, is responsible for manufacturing the aircraft and the ground control system. Other contractors include Raytheon, which supplies some of the advanced sensors on the drone, and L-3 Communications, which provides training simulators and satellite communication infrastructure. While the U.S. Air Force (USAF) is the primary U.S. Government recipient of the MQ-9 Reaper, other military departments such as the Missile Defense Agency and Special Operations Command (USSOCOM) invest procurement and research funding in the Reaper. Outside of the military, NASA and the Customs and Border Protection also operate Reaper variants.
We have dived into the Department of Defense budget documents to find out exactly how much the U.S. military is spending on the Reaper and where those funds are going. The Reaper’s funding can be divided into two broad categories: Air Force spending that directly impacts Reaper operations and spending on associated programs that are relevant to the Reaper. The Air Force has proposed allocating approximately $1.1 billion in spending for the MQ-9 Reaper in Fiscal Year 2016, a sum that could see an extra $170 million if the National Defense Authorization Act is signed into law. When combined with other Reaper-relevant spending—which includes spending by other departments besides the Air Force, procurement of the Hellfire missile munitions, and other research programs that will impact the future development of the Reaper—the total is estimated at around $1.94 billion for FY16.
Within the Air Force, each type of spending—procurement, research, operations and maintenance, and construction—is detailed in multiple budget documents. In addition to these documents, the Air Force regularly publishes assessments of changes to the costs of the program as well as analysis of general defense spending changes.
- Department of Defense Budget Documents
- Air Force Budget Document Library
- April 2014 MQ-9 Selected Acquisition Report
- DOD Summary of Selected Acquisition Reports
- Performance of the Defense Acquisition System: 2015 Annual Report
- Compendium of Program Manager Reports for FY15
- Inspector General Report on Reaper Procurement Quantities
- FY16 National Defense Authorization Act
The U.S. Air Force Air Combat Command initiated the MQ-9 Reaper (then known as the MQ-9 Predator B) program on May 2, 2002. Although a handful of aircraft were purchased in the following years for testing and development, it wasn’t until 2006 that the Pentagon began ramping up production. At the time, Reaper procurement was still combined with its predecessor, the MQ-1 Predator. In a program justification document published on July 14, 2006, the Air Force estimated that the combined MQ-1/9 acquisition program would cost $3.75 billion and produce a total of 378 drones—256 Predators and 126 Reapers. In the following years, however, the procurement goals for the Reaper and cost estimates varied according to shifting priorities, demand from commanders, and funding availability. The first Reaper squadron, the 42nd Attack Squadron, was activated on November 6, 2006 and became operational in 2007. In FY08, when the Air Force purchased a set of four Reapers, the MQ-9 program was separated from the Predator program and consolidated under its own title.
The biggest jolt to the program came in 2011 when then-Secretary of Defense Robert Gates set a goal of 65 drone Combat Air Patrols—each consisting of four Predator or Reaper aircraft—by 2013; Gates emphasized that goal in testimony to the House Armed Services Committee in February 2011. In 2012, the U.S. Air Force established a baseline estimate of how many drones it planned to acquire—391—and how much the entire program is estimated to cost—$10.75 billion. The demand for the drones peaked in 2013, when the Air Force planned to purchase a total of 401 Reapers throughout the lifetime of the program. In 2014, after an Inspector General’s report criticized the Air Force for incorrectly estimating how many Reapers it needed to purchase, the numbers dipped to 349 for FY15. In the proposed budget for FY16, the Air Force estimates that the Reaper program will produce 364 aircraft by 2019.
At this point in the life of the acquisition program, however, there appears to be a greater emphasis within the Air Force budgets on improving existing aircraft, and advancing technological capabilities than on procuring as many drones as possible. In an assessment published by the Department of Defense on September 23, 2015, Colonel William S. Leister, the program manager for MQ-9 Reaper acquisition, identified several worrying trends in the development of the aircraft and ground control systems. “The program sprinted for so long, there are bound to be insidious artifacts lurking in the system that we missed; some may be significant,” Leister writes. One early issue with the Block 5 aircraft—the latest generation of the Reaper—was that the avionics and other internal systems could not handle hot weather operations. According to Leister, although this problem was quickly solved by General Atomics, other issues like an abrupt mid-flight loss of electrical power caused by starter-generator failure continued to plague the program. A special point of contention that Leister had with General Atomics was with the development of the newest ground control stations—the GCS Block 50—which he describes as producing “less than stellar results.”
Two projects within the Reaper acquisition program have experienced precipitous increases in costs. These were identified in the “Performance of the Defense Acquisition System: 2015 Annual Report” released by Undersecretary of Defense of Acquisition, Technology, and Logistics Frank Kendall on September 16, 2015 as the Multi-Spectral Targeting System (MTS-B) and the MQ-9 System Development and Demonstration Bridge (SDD), which experienced total cost growth of 797 percent and 327 percent, respectively. According to the April 2014 Selected Acquisition Report (SAR) for the MQ-9, a periodic summary of the program required by Congress, the MTS-B project had difficulty developing and integrating the Tri-Beam Emission and Receiver, the laser on the drone that identifies targets for destruction that is manufactured by Raytheon. The increases to the MQ-9 SDD, a General Atomics project to provide system improvements to the aircraft, is due to “contract overruns, rebaselining and contract modifications,” according to the 2014 MQ-9 SAR.
In spite of these issues and unlike other acquisition programs, the Reaper program as a whole has not experienced tremendous cost overruns, at least in the years since a baseline for the project was established in 2012. Since then, costs have risen by 8.3 percent, according to the annual summary of Selected Acquisition Reports released by the Pentagon in December 2014. This number reflects the change during the years since the baseline was established in 2012 and not the total change since the first Reapers were purchased. The Reaper program finances run quite low in comparison to the costs of the Navy’s MQ-8C Fire Scout drone, which have risen by 64.7% in the years since a baseline was established for that program, and the Air Force’s RQ-4 Global Hawk drone, which is up by 88.6%. A major reduction in the planned procurement goals from the baseline’s 391 to the current 364 helped bring costs down. The savings from this reduction have been partially offset, however, by modifications to the Reapers, production delays, and requirement changes. The lifetime cost of the Reaper program is up from $10.75 billion in 2012 to $12.31 billion as of December 2014, with $6.82 billion having been already spent prior to FY16.
According to these figures, the estimated life of the Reaper acquisition program is a little over halfway complete with 75 percent of the aircraft having been bought and paid for. Considering that the Air Force plans on operating the drones through 2044, there are other costs associated with maintaining and upgrading the aircraft that factor into the total cost of the program. The budget documents for FY16 help explain some of these associated programs and the technologies that define this generation of Reapers.
Procurement is the largest item in the program budget. It covers three broad areas: purchase of the aircraft and GCS, modifications, and repairs and spare parts. Between the three main areas, the Air Force plans on spending $884.8 million, or 79 percent of the Air Force’s Reaper budget and 46 percent of all Reaper-relevant spending across the military. Fiscal Year 2016 will see progress in a few major procurement areas. In the modification realm, the Air Force plans on spending $89.72 million for a modification that will add 10 hrs in flight time to the range of 36 MQ-9 aircraft. The Air Force also plans on initiate purchasing of the Block 50 GCS, the prototypes of latest ground control stations.
- The Air Force plans to buy 29 MQ-9 Reapers at a cost of $14.5 million per airframe for a total of $420 million, and 10 ground control stations at $3.17 million per for a total of $31.7 million.
- Delivery of ground control stations takes around one year, and delivery of aircraft takes two years. In other words, the Reaper aircraft that are ordered in August 2016, are estimated to be delivered in June 2019.
- The purchasing and modification items consist of multiple sub-categories and programs. For example, procurement of the aircraft ($420 million) and GCS ($31.7 million) also includes funding for training simulators ($10.2 million), satellite communications equipment ($3 million), the cost of managing the program ($60.5 million), and other costs like production support and support equipment. Repairs and spare parts spending is not itemized in the budget.
- Spending lines change from year-to-year. The Air Force may purchase several ground control stations one year, and zero the next according to evolving needs. This is also because costs rise when the number of orders are low.
- Some procurement programs have parallel research and development (RDT&E) spending. This is particularly true of the Block 5 Reaper aircraft, which has a dedicated research spending line for improving the capabilities of the newest generation of advanced drones.
Beyond the Air Force’s drone budget, there are other procurement spending lines that impact the total spending on the Reaper. Foremost among these is the procurement of Hellfire missiles, the primary munition on the Reaper. Spending on the Hellfire by the Air Force is anticipated to increase dramatically in FY16, with $703.92 million allocated—more than the total amount that the Air Force plans on spending on new Reaper aircraft and over four times as much as was spent on Hellfires last year. According to the Air Force’s budget justification, this increase is due to the need to replenish the stocks of the missile that were expended in Afghanistan and the campaign against ISIL in Iraq and Syria.
Research, Development, Testing, and Evaluation (RDT&E)
Spending on research is divided into two broad categories: spending that directly supports the operation and development of the platform and spending that contributes to the future development of the platform and other related systems.
- The Air Force has allocated $123.4 million on Reaper-specific research. There are a number programs that this funding supports. A majority of this funding, 79 percent, goes toward developing and testing the latest generation of Reaper aircraft and ground control systems. The Block 5 Reaper aircraft is the successor to the Block 1 and contains updated communications security, greater weapons and payload capabilities, improved electrical output, among other changes. The Block 50 GCS is the successor to the Block 30 and features a bank of touch screens, a gaming controller, maps with 3D graphics, and other features. The new GCS could reduce the need for a sensor operator (the drone pilot’s co-operator) in the future.
- Secondary to the Reaper-specific research are myriad smaller research programs that support the development of current and future remotely piloted aircraft. Although the funding for these programs is much lower than for developing the Block 5 aircraft, these programs are likely to have a greater impact on the growth of the technology over the long term. For example, the Air Force has allocated $19.7 million to developing a capable sense-and-avoid system, which will be essential for drone operations in crowded airspaces. Other items include $1.58 million for exploring how a human operator can control multiple drones at once in a dynamic environment. These programs amount to a total of $60 million in addition to research funding for Reaper-relevant spending.
In addition to the Air Force research, the U.S. Special Operations Command and the Missile Defense Agency also invest funds into developing the capabilities of the MQ-9 Reaper.
- USSOCOM has allocated $18.2 million towards researching special operations-specific mission kits, which may include advanced sensors and weapons that are not on conventional Air Force drones. Read on: “Diaries from the Shadows: Drones and Special Forces in the War on Terror”
- The MDA has allocated $28.2 million for an ongoing program that researches ways of using drones to identify and track incoming ballistic missiles.
The Air Force has allocated $73 million for construction projects such as hangars, maintenance facilities, and intelligence processing centers for the MQ-9 Reaper.
- A portion of this budget is goes toward facilities for Air National Guard units that are transitioning from flying other aircraft to the MQ-9 Reaper. However, not all of these units are flying drones inside the United States; of the two ANG construction projects, only one—for the New York Air National Guard—provides “bed down” facilities, meaning that the drones will be based on site. The Arkansas Air National Guard will receive funding to improve their capability in flying the drones overseas. Read on: “National Guard Drones”
- The Air Force plans on building a new drone base in Agadez, Niger. The base at Agadez will complement current facilities in Niamey, Niger in providing facilities to enable drone operations in eastern and northern Africa.
Overseas Contingency Operations
On October 7, 2015, the Senate passed the FY16 National Defense Authorization Act (NDAA), a bill that sets the priorities for defense spendings for next year. President Obama has vowed to veto the FY16 NDAA due to a major disagreement with Republicans over the Overseas Contingency Operations (OCO) budget, a fund intended to support combat operations that is separate from the Pentagon’s base budget. The OCO is controversial because the Republican-led Congress, in an effort to avoid going above the budget caps known as sequester that were established by the 2011 Budget Control Act, have transferred some spending items from the Pentagon’s baseline budget to the OCO in the FY16 NDAA. The Obama administration and the Pentagon have argued that continuing the OCO budget has a destabilizing effect on the military’s ability to plan for the long-term.
Besides Hellfire missile procurement, the Pentagon’s FY16 proposed budget contained few items within MQ-9 spending that fell under the OCO. The FY16 NDAA does not make major changes to this decision. The OCO share has not always been so low. In the FY12 NDAA, Congress transferred the entire $719.6 million budget for purchasing MQ-9 systems from the base fund to the OCO.
For proposed spending on the MQ-9 Reaper and other unmanned systems in Fiscal Year 2017, click here.
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