Pentagon weighs buy of unmanned plane at lower cost. (Up Front).

Northrop Grumman Corp. and the Pentagon have worked out differences over the troubled Global Hawk program clearing the way for purchase of up to 51 of the unmanned reconnaissance planes.

Defense officials had balked at paying the estimated $48.3 million for each aircraft, a price that had ballooned from the original $15 million. The cost is now pegged at $35 million to $40 million per plane, an amount more acceptable to the Pentagon, sources said. Northrop reduced the price by cutting the number of sensors aboard each plane.

Congress has approved delivery of two Air Force planes this year, and Northrop and Pentagon officials are currently in negotiations for six additional planes--four for the Air Force and two for the Navy - to be delivered in 2004 and 2005.

Air Force officials hope to gain House and Senate approval for a multi-year contract to make six planes per year beginning in 2007, with procurements increasing to nine annually by 2012.

"The cost hike was driven by Air Force requirements to get maximum flexibility," said Air Force. Col. Scott Coale, director of the Global Hawk program at Wright-Patterson Air Force Base near Dayton, Ohio. "We put every (sensor) capability on every vehicle. When we realized what the cost was, we took a step back from maximum flexibility."

The sensors provide the aircraft's surveillance capabilities using infrared and still photography images, as well as signals that are beamed to satellites and then down to ground stations for processing. (The Air Force also wants to buy 10 ground stations, which consist of mission control as well as launch-and-recovery components.)

The skyrocketing cost of the Northrop program resulted in Pentagon officials threatening to re-bid the sensors portion of the contract or scrapping the Global Hawk altogether and upgrading Lockheed Martin Corp.'s U-2 spy plane to match Global Hawk's capabilities.

That created a dilemma for Northrop and its prime subcontractor, Raytheon Co., whose El Segundo unit makes the sensors and radars. Northrop wants to secure its status as an industry leader in the UAV (unmanned aerial vehicle) market.

Pushing tar sensors

Northrop officials were reluctant to point any fingers at its customers, but it told the Air Force that its continuous orders to upgrade the sensors and radar package were the reason for the escalating costs, which had risen to $73.6 million including a ground station. "They were putting a lot of sensors on the Global Hawk," said Pat Mullaney, director of communications for Northrop's Integrated Systems unit.

A joint committee of Northrop and Air Force officials devised a "missionized" approach to the program, meaning that each Global Hawk would be made for specific types of missions rather than loading each plane with all types of sensors.

It also recommended that the Air Force continue to pursue a multi-year contract and an increased production rate as a means of further keeping costs manageable.

If Northrop can do that, one analyst said, the Air Force would ultimately buy hundreds of Global Hawks after the last of the 51 planes rolls off the production line.

The Global Hawk provides surveillance of enemy territory without risking human life in the event one or more planes is shot down or crashes. Its sensors can detect and send back still images to command centers of ground targets and enemy aircraft.

As part of the agreement, Northrop is reconfiguring the plane to hold a 3,000-pound payload, up from the current 2,000 pounds on the demonstration vehicles. The new Global Hawks will be able to fly at speeds up to 400 miles per hour for as long as 28 hours.

Despite the agreement, some Pentagon officials would like to see a bidding process for the sensor package, which is the most expensive portion of the plane, said Loren Thompson, a defense analyst for the Arlington, Va.-based Lexington Institute, a conservative think tank.

"There is general agreement in the Pentagon that the Global Hawk is a revolution in war fighting," said Thompson. "However, the full benefits of the revolution can't be realized unless the sensor package is made more affordable."

Air Force officials were impressed by the performance of Global Hawk prototypes flying over Afghanistan last year - despite the fact that one of the vehicles crashed - that they ordered upgrades to make the plane 's capabilities similar and in some cases better than the U-2. (As early as fiscal 2006, for instance, the Global Hawk will have a radar system that's capable of tracking moving ground targets.)

RELATED ARTICLE: Global Hawk

Type of aircraft: Unmanned reconnaissance

Primary contractor: Northrop Grumman Corp.

Cost: $35 million-$40 million each

Anticipated number in fleet: 51 planes

Maximum speed: 400 miles per hour

Maximum length of flight: 28 hours

Maximum altitude: 65000 feet

Maximum payload: 2000 pounds

Payload: Electra-optical, infrared and electronic intelligence sensors, air-to-ground radar system.

Source: Northrop Grumman Corp.