Pentagon will not fund northrop's unmanned decoy. (Up Front).

In the wake of poor early test results, the Air Force has pulled the plug on Northrop Grumman Corp.'s Miniature Air-Launched Decoy program, dealing a blow to the company's status as the industry leader in unmanned aerial vehicles.

The Air Force will allow the Century City-based company to spend the remainder of a $50 million award to complete research and development of the MALD in the hope that the technology could have future applications.

But Pentagon officials have placed the program back on the drawing board and will allow other defense contractors to compete for a new round of R&D funding to design a better model of the decoy, which is fired from jet fighters and bombers to trick enemy air attacks.

"The progress on the program was not going that great," said Gloria Cales, an Air Force spokeswoman. "There were some tests that weren't good. We still have a need for a MALD-like system. But in light of the current program progress, we're going out and reexamining our long-term approach to it."

The decision follows the Navy's recent decision not to proceed further with Northrop's Fire Scout, a vertical takeoff and landing surveillance UAV that was judged less useful than the company's Global Hawk, prototypes of which are now in use over Afghanistan.

Performance of the Global Hawk has made Northrop the UAV leader. With a production cost of $10 million to $15 million each, the aircraft travels up to 65,000 feet in altitude at 350 miles per hour for up to 36 hours, carrying 2,000 pounds of payload.

The Air Force last week awarded Northrop its first production contract - a $101 million agreement - for the Global Hawk, softening the loss of the MALD program. Northrop will construct the Global Hawk in Palmdale and San Diego.

Leading capabilities

The Global Hawk's capabilities far outshine the only other UAV surveillance plane in use: General Atomics Aeronautical Systems Inc.'s Predator, of which 60 have already been delivered to the Air Force. That plane costs $3 million to $5 million each, but can only fly 25,000 feet above ground at 92 miles per hour for 24 hours, carrying a payload of 450 pounds.

Although the MALD or Fire Scout programs are not among Northrop's big-ticket defense items, the loss of two long-term production contracts is a blow to Northrop in the UAV field. Company officials wanted the MALD technology to be used as a springboard to win future military contracts.

"It's an opportunity lost," said Paul Nisbet, a partner in Newport, R.I.-based defense analysts JSA Research Inc. "It appears to eliminate potential future business. They still are the leader. (But) they don't want to lose any program."

Northrop was also among three defense firms beat out by Boeing Co. on a $170 million design and development contract for a Navy unmanned combat vehicle. In response, Northrop is developing, at its own unspecified expense, the Pegasus unmanned combat aircraft demonstrator.

The MALD program began with a $37 million award from the Defense Advanced Research Projects Agency, the Pentagon's research arm. The Air Force later kicked in $13 million in hopes that low-rate initial production would begin next month with the ultimate program objective calling for 3,000 MALDs at a cost of $75,000 each. Northrop had kicked in $16 million of its own funds on the development program.

Northrop was scheduled to flight test the MALD this June through September. Those plans are now uncertain.

"Whether Fire Scout or MALD continue into production, they have contributed to the on-going success of our efforts to design and build robust, reliable UAV systems' said Jim Hart, communications manager for Northrop's Integrated Systems sector, in a prepared statement. "We believe that Northrop Grumman's UAV programs have proved that UAVs are and will be integral elements of the future U.S. military force Structure".

The Fire Scout, like the Predator, has less capabilities than the Global Hawk, flying at a maximum altitude of only 20,000 feet at about 290 miles per hour for six hours, carrying a payload of slightly more than 100 pounds.

For that reason, the Navy said it has no current plans to purchase any more Fire Scouts after the last of the three vehicles Northrop is under contract to build are delivered next year. The company was awarded a combined $107.7 million contract for engineering and manufacturing development in early 2000 and the initial production last spring.