ACS Update: Lockheed Drops ERJ-145, Shifts to Bombardier Jet
In a previous article, DID dissected “The Kerfuffle Around the Shuffle.” We covered the 3 different US reconnaissance aircraft that the $8 billion Aerial Common Sensor (ACS) spy plane program would replace, and went over the ACS’s bidding history. Then DID looked at various players and possible strategies at work as the program hit a major roadblock, and the “winner” Lockheed faced a possible air platform change. As DID noted at the time, all options presented serious risks and headaches for Lockheed – even as Northrop-Grumman pushed for a reopening of the bid process.
While no official change has been made, reports in the Wall St. Journal, ABC News, and CNN are noting that an air platform change is indeed in the works; it just wasn’t the one most people were expecting. As DID noted, Lockheed’s original choice seemed to involve a switch from the Embraer ERJ-145 to the much larger ERJ-190 regional jet. Instead, however, Lockheed has chosen an even more expensive Canadian option. Bombardier’s Global Express long range business jet isn’t as large as the ERJ-190, but offers much longer range and station time – and an additional benefit as well. It may seem like a strange choice, especially since it seems to give ammunition to Northrop-Grumman and General Dynamics to push for a rebid. Yet there is a logic to it…
First, a quick recap. The US Army suspended funding for the ACS program in September 2005; Lockheed was given 60 days to offer a workable plan after the Embraer ERJ-145 proved too small due to estimation mistakes which DID explained. Lockheed is now fighting for three things:
- To maintain the program itself. The $8 billion ACS has been touted as a possible victim of budget pressures, and the setback with the ERJ-145 has the US Navy debating whether or not to pull its $2 billion in funding from the project if the result doesn’t meet their needs as an EP-3 Aries replacement. Lockheed needed to come up with a proposal that conveyed safety and security, in order to lower the political “target profile” of the ACS and reassure the Navy.
- To maintain its status as the competition winner. Northrop-Grumman Corp, which Lockheed outbid last year, could protest if the contract changes are so significant that they can argue a rebid opportunity is justified. They collaborated with General Dynamics subsidiary Gulfstream on the bid, and a change that effectively brought in a new class of aircraft would provide ammunition for a rebid that let both parties compete on the basis of that new class.
- To maintain its profitability of the program. A platform switch means a lot of do-over work, and that means negotiation with the US Army on who should pay for it. Which could easily make the ACS a marginally profitable or even an unprofitable program.
On the surface, the Bombardier Global Express offers all kinds of challenge opportunities. Unlike the Embraer ERJ-145, with a price tag of $10-12 million, the Global Express has a price tag of around $40 million per plane. Not only is that more than the ERJ-145, it’s more expensive than the ERJ-190 – an option the US Army had refused for cost reasons, according to the Wall Street Journal. Furthermore, the Global Express competes with the General Dynamics Gulfstream G550, a comparably-priced but US-built long range business jet that’s the basis of Israel’s future “Nachshon” SIGINT/ELINT aircraft and other specialty platforms.
Northrop-Grumman, who bid the less expensive and capable G450 in the original competition, could argue for a full ACS recompete on something approaching even ground: the Bombardier Global Express vs. the G550.
Yet the Bombardier Global Express has a few ace cards of its own to play. One is the British ASTOR program’s Sentinel R1, an in-service aircraft based on the Global Express that’s performing a similar surveillance/ ELINT/ SIGINT role for the USA’s closest defense partner, with an array of radar and sensors similar to those that the ACS program is seeking. Lockheed argues that because the Global Express has already been modified in this way and has undergone hundreds of hours of flight tests, the higher cost per plane is offset by the program’s reduced design, integration, and testing efforts. The slightly-smaller G550 cannot yet make this claim.
In addition, Lockheed ACS bid subcontractor L-3 Communications, who would install the electronics on the ACS, performed the same role in the British ASTOR program. This too, is a positive feature. It’s unclear whether Raytheon Co., the ASTOR’s prime contractor and radar supplier, would also gain a role in the revised ACS bid.
Finally, the Global Express offers benefits that stretch beyond the program’s financial considerations. If the USA were to accept the Bombardier Global Express as the new ACS platform, the result would be substantial platform commonality with the British Sentinel R1 and therefore greater interoperability with its British ally. With the big two on board, the prospects for allied purchases of the resulting low R&D, high interoperability platform would improve considerably.
Lockheed, of Bethesda, MD and the Montreal, Canada based Bombardier have worked intensively in recent weeks to make the case for this jet switch. The Global Express meets Lockheed’s first and third criteria excellently well, offering a low-risk platform alternative that requires much less rework and so supports both contractor profitability and timely delivery.
If these project benefits plus the interoperability argument are strong enough, they may even cover Lockheed’s second objective and make a recompete seem unproductive. There are reports that the program officer overseeing the ACS spy-plane program has endorsed the switch.
Just in case, however, there are other reports that have Lockheed offering a Plan B that removes some of the planned sensors et. al from the original ACS ERJ-145, allowing everything to fit and preserving all apsects of the program’s cost structure.
Until an Army endorsement is official and the program demonstrates that it has the confidence and support of the US Congress, many outcomes are still possible.
DID will continue to cover this acquisition program, which has all the makings of a great defense procurement case study.
UPDATE: It wasn’t enough. Read “$8B ACS Spy Plane Program Shot Down by Pentagon.”