Selected Acquisition Report (SAR)

RCS: DD-A&T(Q&A)823-424

MQ-9 Reaper Unmanned Aircraft System (MQ-9 Reaper)

As of FY 2017 President's Budget

Defense Acquisition Management

Information Retrieval
(DAMIR)

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Table of Contents

Common Acronyms and Abbreviations for MDAP Programs 3

Program Information 5
Responsible Office 5
References 5
Mission and Description 6
Executive Summary 7
Threshold Breaches 9
Schedule 10
Performance 12
Track to Budget 14
Cost and Funding 16
Low Rate Initial Production 27
Foreign Military Sales 28
Nuclear Costs 29
Unit Cost 30
Cost Variance 33
Contracts 37
Deliveries and Expenditures 43
Operating and Support Cost 44

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Common Acronyms and Abbreviations for MDAP Programs

Acq O&M - Acquisition-Related Operations and Maintenance

ACAT - Acquisition Category
ADM - Acquisition Decision Memorandum
APB - Acquisition Program Baseline
APPN - Appropriation
APUC - Average Procurement Unit Cost
$B - Billions of Dollars
BA - Budget Authority/Budget Activity
Blk - Block
BY - Base Year
CAPE - Cost Assessment and Program Evaluation
CARD - Cost Analysis Requirements Description
CDD - Capability Development Document
CLIN - Contract Line Item Number
CPD - Capability Production Document
CY - Calendar Year
DAB - Defense Acquisition Board
DAE - Defense Acquisition Executive
DAMIR - Defense Acquisition Management Information Retrieval
DoD - Department of Defense
DSN - Defense Switched Network
EMD - Engineering and Manufacturing Development
EVM - Earned Value Management
FOC - Full Operational Capability
FMS - Foreign Military Sales
FRP - Full Rate Production
FY - Fiscal Year
FYDP - Future Years Defense Program
ICE - Independent Cost Estimate
IOC - Initial Operational Capability
Inc - Increment
JROC - Joint Requirements Oversight Council
$K - Thousands of Dollars
KPP - Key Performance Parameter
LRIP - Low Rate Initial Production
$M - Millions of Dollars
MDA - Milestone Decision Authority
MDAP - Major Defense Acquisition Program
MILCON - Military Construction
N/A - Not Applicable
O&M - Operations and Maintenance
ORD - Operational Requirements Document
OSD - Office of the Secretary of Defense
O&S - Operating and Support
PAUC - Program Acquisition Unit Cost

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PB - President’s Budget
PE - Program Element
PEO - Program Executive Officer
PM - Program Manager
POE - Program Office Estimate
RDT&E - Research, Development, Test, and Evaluation
SAR - Selected Acquisition Report
SCP - Service Cost Position
TBD - To Be Determined
TY - Then Year
UCR - Unit Cost Reporting
U.S. - United States
USD(AT&L) - Under Secretary of Defense (Acquisition, Technology and Logistics)

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Program Information

Program Name
MQ-9 Reaper Unmanned Aircraft System (MQ-9 Reaper)

DoD Component
Air Force

Responsible Office

Col William Leister Phone: 937-904-6008

2640 Loop Road West Fax: 937-904-7099
Wright-Patterson Air Force Base, OH 45433-7106
DSN Phone: 674-6008
DSN Fax: 674-7099
[Link]@[Link] Date Assigned: September 1, 2013

References

SAR Baseline (Production Estimate)

FY 2011 President's Budget dated February 1, 2010

Approved APB
Defense Acquisition Executive (DAE) Approved Acquisition Program Baseline (APB) dated December 12, 2012

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Mission and Description

Mission:
The MQ-9 Reaper Unmanned Aircraft System (MQ-9 Reaper) is a multi-mission Hunter-Killer and Intelligence, Surveillance
and Reconnaissance (ISR) system, which provides the combat commander with a persistent capability to find, fix, track,
target, engage and assess Time Sensitive Targets. In the Hunter-Killer mission, the MQ-9 Reaper offers the commander a
choice of weapons including the Hellfire Air-to-Ground Missile, Laser Guided Bombs and Joint Direct Attack Munitions. In
the ISR role, the MQ-9 Reaper's ability to fly for up to 14 hours at altitudes up to 50,000 feet while carrying up to 3,000
pounds on the wings make it the platform of choice for a number of ISR and strike missions. This ability to support a wide
variety of operations results in a steady stream of requirements to develop new capabilities to support an expanding array of
missions. As a result of the combat deployment of the developmental system, the MQ-9 Reaper is supported and
maintained by Contractor Logistics Support personnel and organic Air Force personnel.

Description:
A MQ-9 Reaper system consists of aircraft, a Ground Control Station (GCS), a Satellite Communications terminal, support
equipment, and maintenance and operations personnel deployed for 24-hour operations. The aircraft is controlled by a pilot
who is located in a GCS. Control commands are transmitted from the GCS to the aircraft by a ground based datalink
terminal. The GCS incorporates workstations that allow operators to plan missions, control and monitor the aircraft,
accomplish reconnaissance missions, control weapons and exploit received images. The MQ-9 Reaper carries the Multi-
spectral Targeting System which integrates electro-optical, infrared, laser designator, and laser illuminator into a single
sensor package. The system is composed of four major components which can be deployed for worldwide operations. The
MQ-9 Reaper aircraft can be disassembled and loaded into a container for travel. The GCS is transportable in a C-130
Hercules (or larger) transport aircraft or installed in a fixed facility. The ground data terminal antenna provides line-of-sight
communications for takeoff and landing. The satellite communication system provides over-the-horizon control of the
aircraft. An alternate method of employment, Remote Split Operations, employs a mobile version of the GCS for launch and
recovery efforts. This system conducts takeoff and landing operations at the forward deployed location while the Continental
United States based GCS conducts the mission via extended communication links.

In March 2006, the Commander of Air Combat Command directed early fielding to meet operational needs. To meet the
early fielding date, the program was broken into two blocks with Block 1 providing initial capability to meet the early fielding
date and Block 5 completing the program to the Increment I requirements as described in the CPD. Consequently, the MQ-9
Reaper Increment I program is comprised of Block 1 and Block 5 aircraft. This SAR only includes Increment I
requirements. An MQ-9 Reaper Modernization program is being established in the future to incorporate additional
capabilities. The MQ-9 Reaper Modernization program will have separate requirement documents.

The MQ-9 Reaper's combat potential and demonstrated combat performance fueled the rapid growth of the program. The
MQ-9 Reaper program was initially managed as a Quick Reaction Capability program, a separate Program Office was
established in 2006 to restructure the program to support the Air Combat Command urgent request to field the system. The
MQ-9 Reaper has been actively flying combat missions in overseas contingency operations since September 2007.

The program is in concurrent capability development, procurement, combat operations and support. This situation resulted
from the MQ-9 Reaper's urgent beginnings in the weeks after September 11, 2001, its growth as a Hunter-Killer to support
overseas contingency operations, and the MQ-9 Reaper's evolution into the platform of choice for both ISR and Hunter-Killer
missions.

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Executive Summary

As of February 2016, the Air Force contracted with General Atomics Aeronautical Systems, Incorporated (GA-ASI) for a total
of 263 MQ-9 Reaper Unmanned Aircraft Systems (MQ-9 Reapers). There have been 207 aircraft delivered, which include
test and continuation training assets. Additionally, the MQ-9 Reaper has flown over 980,000 cumulative flight hours. This
SAR is based on the FY 2017 PB for the MDAP only, which set the total number of MQ-9 Reaper aircraft to 350.

Air Combat Command (ACC) declared IOC for the MQ-9 Reaper on December 21, 2015. The signed memorandum stated
the MQ-9 Reaper has met all required IOC capabilities as outlined in the MQ-9 Increment I, CPD.

In 2015, the Program Office (PO) successfully completed the execution of the Extended Range (ER) MQ-9 Reaper. ER
provides an extension of range and/or endurance over the current MQ-9 Reaper configuration, which allows for increased
time on station and/or mission radius. Air Force Special Operations Command is already using the ER aircraft operationally
and has amassed approximately 25,000 flight hours. ACC completed ER Operational Test in September 2015 and
approved fielding in November 2015. Based on warfighter requirements, the PO plans to retrofit the entire MQ-9 Reaper fleet
with ER capability.

As a result of the April 9, 2014 ACC Acquisition and Sustainment Review, the Air Force Service Acquisition Executive
(AFSAE), the Commander of Air Force Materiel Command, and the Commander of ACC directed the PO to develop an
acquisition strategy that blends the rigor of a traditional acquisition program with the agility of a Quick Reaction Capability
program. The intent of this direction is to enable the team to be even more responsive to rapidly-emerging warfighter
requirements. The AFSAE approved the MQ-9 Reaper Hybrid Acquisition Strategy Annex to the MQ-9 Acquisition Strategy
on April 6, 2015. The first hybrid procurement (e.g., Release 1) is already underway with the initial Request for Proposal
released December 10, 2015, and expected contract award is March 2016.

The Block 50 Ground Control Station (GCS) development program conducted an Integrated Baseline Review (IBR) in
August 2015. All actions were successfully completed, and the IBR was closed out in November 2015. The PO is on track
to conduct the Preliminary Design Review in June 2016.

The original design of the MQ-9 Reaper Block 1 aircraft electrical system contained a Starter-Generator (S-G) which serves
as the primary source of electrical power and a battery power backup system. During the timeframe from April 29, 2013
through December 31, 2015, there have been 96 recorded MQ-9 Reaper S-G failures which have resulted in the loss of 13
aircraft. The MQ-9 Reaper PO, through a Crisis Action Team, completed a root cause investigation. Initial results of the
investigation suggested several areas of concern to include manufacturing quality, brushes and brush box alignment,
commutator roundness, rotor balance, and Technical Order procedures, all of which have been addressed through
changes or procedures to the system. However, to date, no root cause has been found.

The PO has implemented a series of mitigation steps to address the S-G issue. First, to prevent loss of aircraft due to S-G
failure, the MQ-9 PO established the Electrical Safety Improvement Program (ESIP) to deliver a kit containing a Direct Drive
Brushless Alternator which is a back-up alternator that provides up to 10 hours of MQ-9 Reaper flight time should the S-G
fail. To date, 72 ESIP kits have been delivered to the Air Force and 41 have been installed on aircraft. The ESIP kit has
successfully provided return-to-base power for 17 aircraft S-G failures. Second, to address manufacturing quality issues,
the aircraft Original Equipment Manufacturer (OEM) is in the process of moving the S-G overhaul process to a new
maintenance, repair and overhaul facility. Third, GA-ASI has also identified a potential alternate generator and is in the
process of adding a second repair source. The PO is in the process of determining if this alternate S-G meets MQ-9
requirements and whether or not it would be a suitable replacement for the legacy OEM’s S-G.

In the December 2014 SAR, the PO had slipped the Follow-on Operational Test and Evaluation (FOT&E) completion date
by three months to April 2016 in order to address a High Outside Air Temperature (OAT) issue. The final phase of 904.6
software release completed Developmental Test on February 26, 2015, where the procedural changes addressing the
overheating issue were successfully exercised. The final Thermal Management hardware solution, consisting of an internal
plenum in the avionics bay, was verified during testing that completed in August 2015. Integrated testing indicated adequate

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performance of the key subsystems required for successful Block 5 flight operations in High OAT conditions. Final verified
and approved Flight Manual and Checklist documentation was delivered to Operational Test on November 2, 2015. FOT&E
start was delayed until January 27, 2016 based on the thermal management mitigations, overlapping test priorities, and
limited aircrew availability. A successful Block 5 Operational Test Readiness Review was held on December 3, 2015 where
the MQ-9 Block 5 weapon system was certified as ready for FOT&E by the PEO for Intelligence, Surveillance, &
Reconnaissance & Special Operations Forces. The PO continues to monitor the schedule closely to ensure it is tracking to
complete within the schedule thresholds approved at the December 2013 MQ-9 Configuration Steering Board.

Five FMS Letters of Offer and Acceptance (LOAs) were signed since the 2014 SAR totaling approximately $560M. The
French signed an LOA for three MQ-9 Reaper Block 5 aircraft and two Dual Control Mobile Ground Control System GCSs.
This will be the third system the French have acquired but the first MQ-9 Reaper Block 5. They also signed an LOA for
continued Air Worthiness documentation to support the MQ-9 platform. Spain signed an LOA for four MQ-9 Reaper Block 5
aircraft and two Mobile GCSs. This will be the first MQ-9 Reaper Block 5 acquisition for Spain. Spain also signed an LOA
providing funding for Air Worthiness documentation, which was signed, to support the Air Worthiness Certification Spain
must provide to their Air Worthiness Authority to fly aircraft in their airspace. Lastly, the United Kingdom signed an LOA to
continue CLS support for the MQ-9 Reaper Block 1 platform.

There are no significant software-related issues with this program at this time.

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Threshold Breaches

APB Breaches Explanation of Breach

Schedule
The MILCON APPN breach was previously reported in the December
Performance 2012 SAR.
Cost RDT&E
Procurement The Follow-On Test and Evaluation and FRP schedule breaches
MILCON were previously reported in the December 2013 SAR.
Acq O&M
The Program Office is working to update the APB to clear these
O&S Cost breaches.
Unit Cost PAUC
APUC

Nunn-McCurdy Breaches
Current UCR Baseline
PAUC None
APUC None
Original UCR Baseline
PAUC None
APUC None

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Schedule

Schedule Events
SAR Baseline Current APB
Current
Events Production Production
Estimate
Estimate Objective/Threshold
Milestone B ACAT II Feb 2004 Feb 2004 Feb 2004 Feb 2004
Milestone C ACAT II Block 1 Feb 2008 Feb 2008 Feb 2008 Feb 2008
IOT&E for Block 1 May 2008 May 2008 May 2008 May 2008
RAA Sep 2010 Jun 2012 Jun 2012 Jun 2012
Milestone C ACAT ID Increment 1, Block 5 Mar 2011 Nov 2012 Nov 2012 Nov 2012
(Ch-1)
FOT&E for Increment I Block 5 Nov 2012 Nov 2013 Oct 2014 Sep 20161
(Ch-2)
FRP Decision for Increment I Block 1 and 5 Mar 2013 Jul 2014 Jun 2015 N/A1
1
APB Breach

Change Explanations
(Ch-1) The current estimate for FOT&E for Increment I Block 5 changed from April 2016 to September 2016 based on
thermal management mitigations in work, overlapping test priorities, and limited aircrew availability. The Program Office
worked with the test community and the user to address all three of these issues resulting in successful IOC. The Program
Office held an Operational Test Readiness Review on December 3, 2015 and received approval from the PEO Intelligence,
Surveillance, & Reconnaissance & Special Operations Forces to enter FOT&E. The last test event is projected to be
completed in August 2016 with the final test report being delivered by September 30, 2016 which is within the schedule
threshold approved at the December 2013 MQ-9 Configuration Steering Board.
(Ch-2) The FRP event changed from TBD to N/A as a result of the August 2013 Air Force Review Board approving the
removal of the FRP milestone. The FRP milestone was removed because the program reached maximum production rate
in FY 2011; It will be replaced by an In Progress Review. In addition, the program will already have delivered and contracted
for the majority of production aircraft at the time of the baselined FRP date.

Notes

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RAA includes two fixed GCSs, two mobile GCSs, six PMAI Block 1 aircraft, technical orders, support equipment, initial and
readiness spares packages, and logistics support.

The August 2013 Air Force Review Board approved the removal of the FRP milestone and it will be replaced by an In
Progress Review. The FRP milestone was removed because the program reached maximum production rate in FY 2011.
In addition, the program will already have delivered and contracted for the majority of production aircraft at the time of the
baselined FRP date.

Acronyms and Abbreviations

FOT&E - Follow-On Test and Evaluation
GCS - Ground Control Station
IOT&E - Initial Operational Test and Evaluation
PMAI - Primary Mission Aircraft Inventory
RAA - Required Assets Available

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Performance

Performance Characteristics
SAR Baseline Current APB
Demonstrated Current
Production Production
Performance Estimate
Estimate Objective/Threshold
Hunter
The system’s The system’s The system’s DT ongoing for The system's capability
capability must allow a capability must allow a capability must allow a KPP; AFOTEC must allow a targeting
targeting solution at the targeting solution at a targeting solution at a IOT&E did not solution at a direct
weapon’s maximum direct attack weapon’s direct attack weapon’s evaluate KPP attack weapon's
range. maximum range maximum range due to system maximum range.
availability; Full
KPP evaluation
deferred to
future FOT&E
Killer
System must be System must be System must be AFOTEC IOT&E System must be
capable of computing a capable of computing capable of computing a found KPP capable of computing a
weapon’s release a weapon’s release weapon’s release operationally weapon’s release point,
point, passing required point, passing required point, passing required effective and passing required
information, at the information, at the information, at the suitable information, at the
required accuracy, to required accuracy, to required accuracy, to required accuracy, to
the weapon and the weapon and the weapon and the weapon and reliably
reliably releasing the reliably releasing the reliably releasing the releasing the weapon
weapon upon weapon upon weapon upon upon command.
command. command. command.
Net Ready: The system must support Net-Centric military operations. The system must be able to enter
and be managed in the network, and exchange data in a secure manner to enhance mission effectiveness.
The system must continuously provide survivable, interoperable, secure, and operationally effective
information exchanges to enable a Net-Centric military capability.
The System must fully The System must fully The System must fully JITC certified The System must fully
support execution of all support execution of all support execution of KPP; JITC support execution of all
operational activities operational activities joint critical operational certification is operational activities
identified in the identified in the activities identified in renewed for identified in the
applicable joint and applicable joint and the applicable joint and each software applicable joint and
system integrated system integrated system integrated update system integrated
architectures and the architectures and the architectures and the architectures and the
system must satisfy system must satisfy system must satisfy system must satisfy the
the technical the technical the technical technical requirements
requirements for Net- requirements for Net- requirements for for Net-Centric military
Centric military Centric military transition to Net- operations to include 1)
operations to include 1) operations to include Centric military DISR mandated GIG IT
DISR mandated GIG IT 1) DISR mandated operations to include 1) standards and profiles
standards and profiles GIG IT standards and DISR mandated GIG IT identified in the TV-1, 2)
identified in the TV-1, profiles identified in the standards and profiles DISR mandated GIG
2) DISR mandated GIG TV-1, 2) DISR identified in the TV-1, KIPs identified in the
KIPs identified in the mandated GIG KIPs 2) DISR mandated GIG KIP declaration table, 3)
KIP declaration table, identified in the KIP KIPs identified in the NCOW-RM Enterprise

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3) NCOW-RM declaration table, 3) KIP declaration table, Services 4) IA

Enterprise Services 4) NCOW-RM Enterprise 3) NCOW-RM requirements including
IA requirements Services 4) IA Enterprise Services 4) availability, integrity,
including availability, requirements including IA requirements authentication, confiden
integrity, authenticat- availability, integrity, including availability, -tiality, and nonrepu-
ion, confidential-ity, and authenticat-ion, integrity, authenticat- diation, and issuance of
nonrepudiat-ion, and confidential-ity, and ion, confidential-ity, and an ATO by the DAA,
issuance of an ATO by nonrepudiat-ion, and nonrepudiat-ion, and and 5) Operationally
the DAA, and 5) issuance of an ATO by issuance of an IATO by effective information
Operationally effective the DAA, and 5) the DAA, and 5) exchanges; and
information exchanges; Operationally effective Operationally effective mission critical
and mission critical information information exchanges; performance and IA
performance and exchanges; and and mission critical attributes, data
information assurance mission critical performance and IA correctness, data
attributes, data performance and IA attributes, data availability, and
correctness, data attributes, data correctness, data consistent data
availability, and correctness, data availability, and processing specified in
consistent data availability, and consistent data the applicable joint and
processing specified in consistent data processing specified in system integrated
the applicable joint and processing specified in the applicable joint and architecture views.
system integrated the applicable joint and system integrated
architecture views. system integrated architecture views.
architecture views.

Requirements Reference
Capability Production Document (CPD) dated January 29, 2007

Change Explanations
None

Acronyms and Abbreviations

AFOTEC - Air Force Operational Test and Evaluation Center
ATO - Approval to Operate
DAA - Designated Approval Authority
DISR - Department of Defense Information Technology Standards Registry
DT - Developmental Testing
FOT&E - Follow-On Operational Test and Evaluation
GIG - Global Information Grid
IA - Information Assurance
IATO - Interim Approval to Operate
IOT&E - Initial Operational Test and Evaluation
IT - Information Technology
JITC - Joint Interoperability Test Command
KIP - Key Interface Profile
NCOW-RM - Net-Centric Operations and Warfare Reference Model
TV-1 - Technical Standards Profile

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Track to Budget

General Notes
Program Element 0205219F includes funds not associated with the MDAP. This report only reflects funds associated with
the MDAP.

RDT&E

Appn BA PE
Air Force 3600 07 0205219F
Project Name
675246 MQ-9 Development and Fielding
675249 (Shared)
Air Force 3600 07 0305205F
Project Name
674755 (Shared) (Sunk)
Air Force 3600 07 0305219F
Project Name
675143 PREDATOR (Shared) (Sunk)

Procurement

Appn BA PE
Air Force 3010 07 0205219F
Line Item Name
000075 Other Production Charges (Shared)
Air Force 3010 06 0205219F
Line Item Name
000999 Initial Spares (Shared)
Air Force 3010 05 0305205F
Line Item Name
PRDT01 MQ-1 Mods (Shared) (Sunk)
Air Force 3010 04 0305205F
Line Item Name
PRDTA1 Aircraft Procurement (Shared) (Sunk)
Air Force 3010 04 0205219F
Line Item Name
PRDTB1 MQ-9
Air Force 3010 05 0205219F
Line Item Name
PRDTB2 MQ-9 Mods
MILCON

Appn BA PE

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Air Force 3300 01 0205219F

Project Name
BHD000 MQ-9 Operations (Sunk)
KWRD143 RPA Fixed Ground Control Station Facility
RKMF113 Add RPA Weapons School Facility (Sunk)

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Cost and Funding

Cost Summary

Total Acquisition Cost

BY 2008 $M BY 2008 $M TY $M

Appropriation SAR Baseline Current APB SAR Baseline Current APB

Current Current
Production Production Production Production
Estimate Estimate
Estimate Objective/Threshold Estimate Objective
RDT&E 778.8 1365.1 1501.6 1248.3 809.9 1488.8 1346.8
Procurement 9824.0 10175.3 11192.8 9221.7 10866.0 11765.5 10591.4
Flyaway -- -- -- 6831.6 -- -- 7863.5
Recurring -- -- -- 6831.6 -- -- 7863.5
Non Recurring -- -- -- 0.0 -- -- 0.0
Support -- -- -- 2390.1 -- -- 2727.9
Other Support -- -- -- 976.5 -- -- 1129.8
Initial Spares -- -- -- 1413.6 -- -- 1598.1
MILCON 148.5 53.3 58.6 72.31 158.9 55.6 77.3
Acq O&M 0.0 0.0 -- 0.0 0.0 0.0 0.0
Total 10751.3 11593.7 N/A 10542.3 11834.8 13309.9 12015.5
1
APB Breach

Confidence Level
Confidence Level of cost estimate for current APB: 50%

The Service Cost Position, signed September 10, 2012, to support the MQ-9 Reaper program Milestone C decision is built
upon a product-oriented work breakdown structure, based on historical actual cost information to the maximum extent
possible, and based on assumptions that are consistent with actual demonstrated contractor and government
performance.

It is difficult to calculate mathematically the precise confidence levels associated with life-cycle cost estimates prepared
for Major Defense Acquisition Programs (MDAPs). Based on the rigor in methods used in building estimates, the strong
adherence to the collection and use of historical cost information, and the review of applied assumptions, we project that it
is about equally likely that the estimate will prove too low or too high for execution of the program described.

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Total Quantity
SAR Baseline
Current APB
Quantity Production Current Estimate
Production
Estimate
RDT&E 3 3 3
Procurement 388 401 347
Total 391 404 350

Quantity Notes
Procurement quantity is the number of MQ-9 Reaper aircraft. Ground Control Stations (GCS) and other equipment costs
are included, but not used as a unit of measure.

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Cost and Funding

Funding Summary

Appropriation Summary
FY 2017 President's Budget / December 2015 SAR (TY$ M)
To
Appropriation Prior FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Total
Complete
RDT&E 958.7 122.7 115.1 95.7 54.6 0.0 0.0 0.0 1346.8
Procurement 5710.1 945.8 744.7 457.5 509.3 359.5 314.8 1549.7 10591.4
MILCON 74.1 0.0 0.0 3.2 0.0 0.0 0.0 0.0 77.3
Acq O&M 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
PB 2017 Total 6742.9 1068.5 859.8 556.4 563.9 359.5 314.8 1549.7 12015.5
PB 2016 Total 6817.4 1013.1 1033.3 1000.0 694.6 387.6 315.7 1044.5 12306.2
Delta -74.5 55.4 -173.5 -443.6 -130.7 -28.1 -0.9 505.2 -290.7

Funding Notes
"To Complete" procurement costs in the table above primarily include retrofit costs and GCS Block 50 costs.

Quantity Summary
FY 2017 President's Budget / December 2015 SAR (TY$ M)
FY FY FY FY FY FY To
Quantity Undistributed Prior Total
2016 2017 2018 2019 2020 2021 Complete
Development 3 0 0 0 0 0 0 0 0 3
Production 0 290 33 24 0 0 0 0 0 347
PB 2017 Total 3 290 33 24 0 0 0 0 0 350
PB 2016 Total 3 284 29 24 21 3 0 0 0 364
Delta 0 6 4 0 -21 -3 0 0 0 -14

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Cost and Funding

Annual Funding By Appropriation

Annual Funding
3600 | RDT&E | Research, Development, Test, and Evaluation, Air Force
TY $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2002 -- -- -- -- -- -- 7.8
2003 -- -- -- -- -- -- 12.8
2004 -- -- -- -- -- -- 20.9
2005 -- -- -- -- -- -- 56.8
2006 -- -- -- -- -- -- 10.1
2007 -- -- -- -- -- -- 34.0
2008 -- -- -- -- -- -- 55.9
2009 -- -- -- -- -- -- 38.6
2010 -- -- -- -- -- -- 102.8
2011 -- -- -- -- -- -- 136.6
2012 -- -- -- -- -- -- 106.7
2013 -- -- -- -- -- -- 130.9
2014 -- -- -- -- -- -- 103.3
2015 -- -- -- -- -- -- 141.5
2016 -- -- -- -- -- -- 122.7
2017 -- -- -- -- -- -- 115.1
2018 -- -- -- -- -- -- 95.7
2019 -- -- -- -- -- -- 54.6
Subtotal 3 -- -- -- -- -- 1346.8

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Annual Funding
3600 | RDT&E | Research, Development, Test, and Evaluation, Air Force
BY 2008 $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2002 -- -- -- -- -- -- 8.9
2003 -- -- -- -- -- -- 14.4
2004 -- -- -- -- -- -- 22.9
2005 -- -- -- -- -- -- 60.7
2006 -- -- -- -- -- -- 10.5
2007 -- -- -- -- -- -- 34.4
2008 -- -- -- -- -- -- 55.4
2009 -- -- -- -- -- -- 37.8
2010 -- -- -- -- -- -- 99.3
2011 -- -- -- -- -- -- 129.6
2012 -- -- -- -- -- -- 99.5
2013 -- -- -- -- -- -- 120.0
2014 -- -- -- -- -- -- 93.4
2015 -- -- -- -- -- -- 126.7
2016 -- -- -- -- -- -- 108.2
2017 -- -- -- -- -- -- 99.7
2018 -- -- -- -- -- -- 81.4
2019 -- -- -- -- -- -- 45.5
Subtotal 3 -- -- -- -- -- 1248.3

March 23, 2016

UNCLASSIFIED 20
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FY 2002 RDT&E includes $7.8M (TY$) of Defense Emergency Response Funds.

March 23, 2016

UNCLASSIFIED 21
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MQ-9 Reaper December 2015 SAR

Annual Funding
3010 | Procurement | Aircraft Procurement, Air Force
TY $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2002 4 60.4 -- -- 60.4 -- 60.4
2003 4 36.8 -- -- 36.8 -- 36.8
2004 5 67.7 -- -- 67.7 2.8 70.5
2005 5 85.8 2.2 -- 88.0 5.3 93.3
2006 2 32.2 33.0 -- 65.2 44.7 109.9
2007 12 109.4 50.6 -- 160.0 151.6 311.6
2008 28 214.2 51.7 -- 265.9 80.5 346.4
2009 24 212.3 138.4 -- 350.7 186.4 537.1
2010 24 263.8 24.1 -- 287.9 245.6 533.5
2011 48 429.8 51.9 -- 481.7 140.3 622.0
2012 48 515.4 177.8 -- 693.2 211.6 904.8
2013 39 583.2 145.4 -- 728.6 150.5 879.1
2014 23 292.0 68.5 -- 360.5 143.4 503.9
2015 24 416.1 130.0 -- 546.1 154.7 700.8
2016 33 595.9 134.6 -- 730.5 215.3 945.8
2017 24 375.7 152.8 -- 528.5 216.2 744.7
2018 -- 99.2 217.4 -- 316.6 140.9 457.5
2019 -- 112.3 260.8 -- 373.1 136.2 509.3
2020 -- 103.8 126.3 -- 230.1 129.4 359.5
2021 -- 88.7 163.5 -- 252.2 62.6 314.8
2022 -- 143.5 218.2 -- 361.7 77.4 439.1
2023 -- 127.6 149.0 -- 276.6 76.3 352.9
2024 -- 160.2 34.7 -- 194.9 52.1 247.0
2025 -- 164.9 8.7 -- 173.6 45.3 218.9
2026 -- 154.2 8.5 -- 162.7 42.4 205.1
2027 -- 31.5 5.2 -- 36.7 6.7 43.4
2028 -- 28.8 4.8 -- 33.6 9.7 43.3
Subtotal 347 5505.4 2358.1 -- 7863.5 2727.9 10591.4

March 23, 2016

UNCLASSIFIED 22
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Annual Funding
3010 | Procurement | Aircraft Procurement, Air Force
BY 2008 $M

Fiscal Non End

Quantity End Item Non
Year Item Total Total Total
Recurring Recurring
Recurring Flyaway Support Program
Flyaway Flyaway
Flyaway
2002 4 68.0 -- -- 68.0 -- 68.0
2003 4 40.8 -- -- 40.8 -- 40.8
2004 5 73.1 -- -- 73.1 3.0 76.1
2005 5 90.0 2.3 -- 92.3 5.5 97.8
2006 2 32.9 33.7 -- 66.6 45.7 112.3
2007 12 108.9 50.4 -- 159.3 150.9 310.2
2008 28 209.8 50.6 -- 260.4 79.0 339.4
2009 24 204.6 133.4 -- 338.0 179.6 517.6
2010 24 249.2 22.8 -- 272.0 232.1 504.1
2011 48 399.8 48.3 -- 448.1 130.5 578.6
2012 48 472.1 162.9 -- 635.0 193.9 828.9
2013 39 523.7 130.7 -- 654.4 135.1 789.5
2014 23 258.6 60.7 -- 319.3 127.0 446.3
2015 24 363.7 113.6 -- 477.3 135.2 612.5
2016 33 511.4 115.4 -- 626.8 184.8 811.6
2017 24 316.3 128.6 -- 444.9 182.0 626.9
2018 -- 81.9 179.5 -- 261.4 116.4 377.8
2019 -- 90.9 211.1 -- 302.0 110.2 412.2
2020 -- 82.4 100.2 -- 182.6 102.7 285.3
2021 -- 69.0 127.2 -- 196.2 48.6 244.8
2022 -- 109.4 166.4 -- 275.8 59.0 334.8
2023 -- 95.4 111.5 -- 206.9 57.0 263.9
2024 -- 117.4 25.4 -- 142.8 38.3 181.1
2025 -- 118.5 6.3 -- 124.8 32.6 157.4
2026 -- 108.7 6.0 -- 114.7 29.8 144.5
2027 -- 21.7 3.6 -- 25.3 4.7 30.0
2028 -- 19.5 3.3 -- 22.8 6.5 29.3
Subtotal 347 4837.7 1993.9 -- 6831.6 2390.1 9221.7

March 23, 2016

UNCLASSIFIED 23
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MQ-9 Reaper December 2015 SAR

FY 2002 Procurement includes $29.1M (TY$) of Defense Emergency Response Funds.

End Item Recurring Flyaway related costs include aircraft, Multi-spectral Targeting System-B (MTS-B) and government
furnished equipment, as well as retrofit costs associated with aircraft and MTS-B.

Non End Item Recurring Flyaway costs include retrofit, GCS and communications. Retrofits include GCS and other
miscellaneous communications and sensor retrofits.

Cost Quantity Information

3010 | Procurement | Aircraft Procurement, Air Force
End Item
Recurring
Fiscal Flyaway
Quantity
Year (Aligned With
Quantity)
BY 2008 $M
2002 4 81.1
2003 4 44.6
2004 5 90.1
2005 5 106.8
2006 2 39.7
2007 12 163.5
2008 28 315.8
2009 24 281.0
2010 24 299.8
2011 48 558.5
2012 48 589.0
2013 39 636.7
2014 23 363.1
2015 24 385.8
2016 33 543.7
2017 24 338.5
2018 -- --
2019 -- --
2020 -- --
2021 -- --
2022 -- --
2023 -- --
2024 -- --
2025 -- --
2026 -- --
2027 -- --
2028 -- --
Subtotal 347 4837.7

March 23, 2016

UNCLASSIFIED 24
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MQ-9 Reaper December 2015 SAR

Annual Funding
3300 | MILCON | Military Construction, Air Force
TY $M
Fiscal
Year Total
Program
2009 44.5
2010 2.7
2011 8.4
2012 --
2013 --
2014 18.5
2015 --
2016 --
2017 --
2018 3.2
Subtotal 77.3

March 23, 2016

UNCLASSIFIED 25
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MQ-9 Reaper December 2015 SAR

Annual Funding
3300 | MILCON | Military Construction, Air Force
BY 2008 $M
Fiscal
Year Total
Program
2009 43.0
2010 2.6
2011 7.8
2012 --
2013 --
2014 16.3
2015 --
2016 --
2017 --
2018 2.6
Subtotal 72.3

March 23, 2016

UNCLASSIFIED 26
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MQ-9 Reaper December 2015 SAR

Low Rate Initial Production

Item Initial LRIP Decision Current Total LRIP

Approval Date 11/21/2012 11/21/2012
Approved Quantity 48 62
Reference Milestone C ADM Milestone C ADM
Start Year 2013 2013
End Year 2014 2014

The Current Total LRIP Quantity is more than 10% of the total production quantity due to Congressional approval to procure
39 Block 5 aircraft in FY 2013 and 23 in FY 2014. The change from the initial LRIP quantity to current LRIP quantity is due to
14 aircraft added to the FY 2013 and FY 2014 profile; eight aircraft added by Congress in FY 2014 and approval to purchase
six additional aircraft based on budget.

The MQ-9 Reaper program was broken into two blocks; Block 1 aircraft, providing initial capability to meet the early fielding
directed by Congress, and Block 5 aircraft which provides additional power, a redesigned avionics bay, and encrypted
communications. The program procured 195 Block 1 aircraft prior to the planned procurement of 155 Block 5 aircraft
starting in FY 2013. The LRIP quantities reported in the table above reflect the procurement of Block 5 aircraft only.

March 23, 2016

UNCLASSIFIED 27
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MQ-9 Reaper December 2015 SAR

Foreign Military Sales

Date of Total
Country Quantity Description
Sale Cost $M
Spain 12/21/2015 4 168.3 FMS case SP-D-SAA provides funding for four MQ-
9 Reaper Block 5 aircraft, two Mobile Ground
Control Stations (MGCS), various support
equipment, and Contractor Logistics Support
(CLS).
Spain 12/21/2015 0 5.8 FMS case SP-D-GAI provides funding for studies
and site surveys for airworthiness certifications.
France 12/7/2015 3 116.6 FMS case FR-D-SAC provides funding for three
MQ-9 Block 5 aircraft, two MGCS, and assorted
support equipment.
France 12/7/2015 0 5.7 FMS case FR-D-GAI provides funding for technical
assistance support of the MQ-9 Reaper Block 5
aircraft, for Tech Assistance support, and for
airworthiness certifications.
United Kingdom 11/12/2015 0 63.5 FMS case UK-D-QBQ provides funding for CLS.
United Kingdom 12/10/2014 0 64.1 FMS case UK-D-GAY provides funding for CLS.
Netherlands 9/30/2014 0 3.1 FMS case NE-D-GAO provides funding for
airworthiness certification as well as a site survey.
Germany 12/26/2013 0 1.0 FMS case GY-D-GAX provides funding for
airworthiness documents, manpower, and travel.
France 8/9/2013 3 340.5 FMS case FR-D-STE provides funding for the
purchase of three aircraft, one MGCS, CLS, and
support equipment.
United Kingdom 11/10/2011 5 70.1 FMS case UK-D-SMK provides funding for the
purchase of five aircraft, four MGCSs, and assorted
sensors and support equipment.
Italy 11/20/2008 6 181.5 FMS case IT-D-SAG provides funding for the
purchase of six aircraft, three MGCSs, CLS, and
assorted support equipment.
United Kingdom 10/4/2007 4 69.1 FMS case UK-D-SMJ provides funding for the
purchase of four aircraft, one MGCS, and spares.
United Kingdom 2/14/2007 2 374.9 FMS case UK-D-SMI provides funding for the
purchase of two aircraft, two MGCSs, CLS, and
assorted support equipment.

Notes

March 23, 2016

UNCLASSIFIED 28
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MQ-9 Reaper December 2015 SAR

Nuclear Costs

None

March 23, 2016

UNCLASSIFIED 29
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MQ-9 Reaper December 2015 SAR

Unit Cost

Unit Cost Report

BY 2008 $M BY 2008 $M

Item Current UCR % Change

Current Estimate
Baseline
(Dec 2015 SAR)
(Dec 2012 APB)
Program Acquisition Unit Cost
Cost 11593.7 10542.3
Quantity 404 350
Unit Cost 28.697 30.121 +4.96
Average Procurement Unit Cost
Cost 10175.3 9221.7
Quantity 401 347
Unit Cost 25.375 26.576 +4.73

BY 2008 $M BY 2008 $M

Item Original UCR % Change

Current Estimate
Baseline
(Dec 2015 SAR)
(Feb 2012 APB)
Program Acquisition Unit Cost
Cost 11541.3 10542.3
Quantity 404 350
Unit Cost 28.568 30.121 +5.44
Average Procurement Unit Cost
Cost 10402.1 9221.7
Quantity 401 347
Unit Cost 25.940 26.576 +2.45

The FY 2017 PB reduced the number of aircraft from the baselined 404 to 350. The aircraft reduction was the primary driver
of unit cost growth in both the PAUC and APUC.

March 23, 2016

UNCLASSIFIED 30
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MQ-9 Reaper December 2015 SAR

Unit Cost History

BY 2008 $M TY $M
Item Date
PAUC APUC PAUC APUC
Original APB Feb 2012 28.568 25.940 32.396 29.604
APB as of January 2006 N/A N/A N/A N/A N/A
Revised Original APB N/A N/A N/A N/A N/A
Prior APB Feb 2012 28.568 25.940 32.396 29.604
Current APB Dec 2012 28.697 25.375 32.945 29.340
Prior Annual SAR Dec 2014 29.614 26.225 33.808 30.163
Current Estimate Dec 2015 30.121 26.576 34.330 30.523

SAR Unit Cost History

Current SAR Baseline to Current Estimate (TY $M)

Initial PAUC Changes PAUC
Production Current
Estimate Econ Qty Sch Eng Est Oth Spt Total Estimate
30.268 0.279 1.517 0.225 3.024 -3.155 0.000 2.172 4.062 34.330

Current SAR Baseline to Current Estimate (TY $M)

Initial APUC Changes APUC
Production Current
Estimate Econ Qty Sch Eng Est Oth Spt Total Estimate
28.005 0.302 1.263 0.199 1.514 -3.041 0.000 2.281 2.518 30.523

March 23, 2016

UNCLASSIFIED 31
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MQ-9 Reaper December 2015 SAR

SAR Baseline History

SAR SAR SAR
Current
Item Planning Development Production
Estimate
Estimate Estimate Estimate
Milestone A N/A N/A N/A N/A
Milestone B N/A N/A Feb 2004 Feb 2004
Milestone C N/A N/A Feb 2008 Feb 2008
IOC N/A N/A Sep 2010 Jun 2012
Total Cost (TY $M) N/A N/A 11834.8 12015.5
Total Quantity N/A N/A 391 350
PAUC N/A N/A 30.268 34.330

The Milestone C schedule event above reflects the ACAT II Block 1 Milestone C decision. On November 21, 2012 the USD
(AT&L) signed an ADM approving the ACAT ID Increment 1, Block 5 Milestone C and delegating MDA to the Air Force.

Milestone Required Assets Available is used in lieu of IOC and was completed on June 30, 2012.

March 23, 2016

UNCLASSIFIED 32
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MQ-9 Reaper December 2015 SAR

Cost Variance

Summary TY $M
Item RDT&E Procurement MILCON Total
SAR Baseline (Production 809.9 10866.0 158.9 11834.8
Estimate)
Previous Changes
Economic -7.4 +156.9 +4.3 +153.8
Quantity -- -474.3 -- -474.3
Schedule -- +60.6 -- +60.6
Engineering +530.1 +414.3 +3.2 +947.6
Estimating +38.9 -1049.4 -89.1 -1099.6
Other -- -- -- --
Support -31.3 +914.6 -- +883.3
Subtotal +530.3 +22.7 -81.6 +471.4
Current Changes
Economic -4.0 -52.0 -0.1 -56.1
Quantity -- -235.6 -- -235.6
Schedule +9.5 +8.5 -- +18.0
Engineering -- +110.9 -- +110.9
Estimating +1.1 -6.0 +0.1 -4.8
Other -- -- -- --
Support -- -123.1 -- -123.1
Subtotal +6.6 -297.3 -- -290.7
Total Changes +536.9 -274.6 -81.6 +180.7
CE - Cost Variance 1346.8 10591.4 77.3 12015.5
CE - Cost & Funding 1346.8 10591.4 77.3 12015.5

March 23, 2016

UNCLASSIFIED 33
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MQ-9 Reaper December 2015 SAR

Summary BY 2008 $M
Item RDT&E Procurement MILCON Total
SAR Baseline (Production 778.8 9824.0 148.5 10751.3
Estimate)
Previous Changes
Economic -- -- -- --
Quantity -- -347.7 -- -347.7
Schedule -- -6.4 -- -6.4
Engineering +457.5 +289.4 +2.7 +749.6
Estimating +31.1 -1022.9 -78.9 -1070.7
Other -- -- -- --
Support -27.3 +730.8 -- +703.5
Subtotal +461.3 -356.8 -76.2 +28.3
Current Changes
Economic -- -- -- --
Quantity -- -193.7 -- -193.7
Schedule +7.4 +15.2 -0.1 +22.5
Engineering -- +49.6 -- +49.6
Estimating +0.8 +9.4 +0.1 +10.3
Other -- -- -- --
Support -- -126.0 -- -126.0
Subtotal +8.2 -245.5 -- -237.3
Total Changes +469.5 -602.3 -76.2 -209.0
CE - Cost Variance 1248.3 9221.7 72.3 10542.3
CE - Cost & Funding 1248.3 9221.7 72.3 10542.3

Previous Estimate: December 2014

March 23, 2016

UNCLASSIFIED 34
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MQ-9 Reaper December 2015 SAR

RDT&E $M
Base Then
Current Change Explanations
Year Year
Revised escalation indices. (Economic) N/A -4.0
Adjustment for current and prior escalation. (Estimating) +1.8 +2.0
Schedule delays due to Air Force funding adjustments in FY 2014 and FY 2015 which -7.0 -7.8
resulted in the inability to begin Multi-Transit Operations development and delayed initial
design reviews of Ground Control Station (GCS) Block 50 Development. (Schedule)
Schedule adjustment due to Air Force funding adjustments which will enable the ramp up of +14.4 +17.3
Technology Maturity efforts for Hybrid Release 1. (Schedule)
Revised estimate due to OSD levied funding adjustment in FY 2016. (Estimating) -0.7 -0.7
Revised estimate due to the removal of funds for the MQ-9 Reaper Modernization Program. -0.3 -0.2
(Estimating)
RDT&E Subtotal +8.2 +6.6

Procurement $M
Base Then
Current Change Explanations
Year Year
Revised escalation indices. (Economic) N/A -52.0
Adjustment for current and prior escalation. (Estimating) +12.5 +14.4
Quantity variance resulting from a decrease of 14 MQ-9 Reapers from 361 to 347. -193.7 -235.6
(Quantity)
Acceleration of procurement buy profile from FY 2018 and FY 2019 to FY 2013 and FY 0.0 -9.9
2014; primarily due to the movement of six aircraft (three in each affected year) .
(Schedule)
Additional schedule variance due to delays in the Block 50 GCS production program from +15.2 +18.4
FY 2016 to FY 2018. (Schedule)
Revised estimate due to the removal of funds for the MQ-9 Reaper Modernization Program. -31.9 -53.4
(Estimating)
Revised estimate due to addition of Overseas Contingency Operations for six additional +28.8 +33.0
GCSs in support of Government Owned Contractor Operated stand-up. (Estimating)
Additional funding for 21 Block 50 GCSs requirements. (Engineering) +49.6 +110.9
Adjustment for current and prior escalation. (Support) +4.5 +4.9
Decrease in Other Support due to decrease in production line shut down estimated cost. -46.6 -42.4
(Support)
Decrease Initial Spares resulting from a decrease of 14 aircraft. (Support) (QR) -83.9 -85.6
Procurement Subtotal -245.5 -297.3

(QR) Quantity Related

MILCON $M
Base Then
Current Change Explanations
Year Year
Revised escalation indices. (Economic) N/A -0.1
Adjustment for current and prior escalation. (Estimating) +0.1 +0.1
Revised estimate as a result of a delay in required storage facility for Block 50 GCS. -0.1 0.0

March 23, 2016

UNCLASSIFIED 35
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MQ-9 Reaper December 2015 SAR

(Schedule)
MILCON Subtotal 0.0 0.0

March 23, 2016

UNCLASSIFIED 36
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MQ-9 Reaper December 2015 SAR

Contracts

Contract Identification
Appropriation: RDT&E
Contract Name: MQ-9 System Development and Demonstration Bridge DO 49
Contractor: General Atomics Aeronautical Systems, INC.
Contractor Location: 14200 Kirkham Way
Poway, CA 92064
Contract Number: FA8620-05-G-3028/49
Contract Type: Cost Plus Incentive Fee (CPIF)
Award Date: July 17, 2009
Definitization Date: July 17, 2009

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
39.3 N/A N/A 107.5 N/A N/A 157.5 157.7

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to contract overruns,
rebaselining and contract modifications.

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/29/2016) -42.2 -0.9
Previous Cumulative Variances -34.6 -4.4
Net Change -7.6 +3.5

Cost and Schedule Variance Explanations

The unfavorable net change in the cost variance is due to unplanned/unscheduled on-wing certification events and test and
evaluation support to incorporate software change requests. Unrecoverable cost variances have been captured in three
overrun modifications totaling $46.8M. They were awarded in November 2011 for $5.9M, February 2014 for $12.1M, and
October 2014 for $28.8M. Total contract variance to date is $-42.2M.

The favorable net change in the schedule variance is due to completion of contract events. Development testing has
completed and Follow-On Test & Evaluation (FOT&E) began January 27, 2016.

Notes
This contract is more than 90% complete; therefore, this is the final report for this contract.

March 23, 2016

UNCLASSIFIED 37
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MQ-9 Reaper December 2015 SAR

Contract Identification
Appropriation: Procurement
Contract Name: MQ-9 CY11 Spares & Support Equipment
Contractor: General Atomics Aeronautical Systems, INC.
Contractor Location: 14200 Kirkham Way
Poway, CA 92064
Contract Number: FA8620-10-G-3038/1
Contract Type: Firm Fixed Price (FFP)
Award Date: July 12, 2012
Definitization Date: July 12, 2012

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
120.6 N/A N/A 138.6 N/A N/A 138.6 138.6

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to engineering change
orders and contract modifications.

Cost and Schedule Variance Explanations

Cost and Schedule Variance reporting is not required on this (FFP) contract.

Notes
This contract is more than 90% complete; therefore, this is the final report for this contract.

March 23, 2016

UNCLASSIFIED 38
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MQ-9 Reaper December 2015 SAR

Contract Identification
Appropriation: Procurement
Contract Name: Block 30 GCS Retrofit
Contractor: General Atomics Aeronautical Systems, INC.
Contractor Location: 14200 Kirkham Way
Poway, CA 92064
Contract Number: FA8620-10-G-3038/14
Contract Type: Cost Plus Incentive Fee (CPIF)
Award Date: September 29, 2011
Definitization Date: September 29, 2011

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
65.0 N/A N/A 65.7 N/A N/A 64.7 64.6

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to engineering change
orders and contract modifications.

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/29/2016) +1.5 -1.5
Previous Cumulative Variances +4.7 -0.5
Net Change -3.2 -1.0

Cost and Schedule Variance Explanations

The unfavorable net change in the cost variance is due to a quality configuration issue with the sizing of the display monitor;
a corrective action plan was implemented and closed in October 2015. Contract is expected to complete with an underrun.

The unfavorable net change in the schedule variance is due to a quality configuration issue with sizing of the display monitor
which is preventing the production orders from closing. A contract modification is expected to extend the period of
performance to September 2016.

Notes
This contract is more than 90% complete; therefore, this is the final report for this contract.

March 23, 2016

UNCLASSIFIED 39
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MQ-9 Reaper December 2015 SAR

Contract Identification
Appropriation: Procurement
Contract Name: FY13 MQ-9 Reaper Production
Contractor: General Atomics Aeronautical Systems, INC.
Contractor Location: 14200 Kirkham Way
Poway, CA 92064
Contract Number: FA8620-10-G-3038/50
Contract Type: Fixed Price Incentive(Firm Target) (FPIF)
Award Date: October 15, 2013
Definitization Date: December 12, 2014

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
213.8 233.4 24 213.8 233.4 24 214.4 215.6

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/29/2016) -4.7 -1.1
Previous Cumulative Variances +4.5 +8.9
Net Change -9.2 -10.0

Cost and Schedule Variance Explanations

The unfavorable net change in the cost variance is due to material dollars that have come in for partial bomb racks but credit
will not be claimed until the entire unit is received. No impact expected to delivery schedule.

The unfavorable net change in the schedule variance is due to Government directed reprioritization of labor to accelerate the
Electrical Safety Improvement Program kit production ahead of the MQ-9 Reaper Block 5 aircraft production.

March 23, 2016

UNCLASSIFIED 40
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MQ-9 Reaper December 2015 SAR

Contract Identification
Appropriation: Procurement
Contract Name: FY14 MQ-9 Reaper Production
Contractor: General Atomics Aeronautical Systems, INC.
Contractor Location: 14200 Kirkham Way
Poway, CA 92064
Contract Number: FA8620-10-G-3038/77
Contract Type: Fixed Price Incentive(Firm Target) (FPIF)
Award Date: February 04, 2015
Definitization Date: February 04, 2015

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
221.0 237.1 24 292.9 313.4 32 293.1 292.9

Target Price Change Explanation

The difference between the Initial Contract Price Target and the Current Contract Price Target is due to an additional eight
aircraft being added to the contract in May 2015.

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/29/2016) +2.3 +10.5
Previous Cumulative Variances 0.0 0.0
Net Change +2.3 +10.5

Cost and Schedule Variance Explanations

The favorable cumulative cost variance is due to savings in program management due to a slower ramp up in staffing than
anticipated.

The favorable cumulative schedule variance is due to the early distribution of seven engines. There is no expected impact to
the overall delivery schedule.

March 23, 2016

UNCLASSIFIED 41
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MQ-9 Reaper December 2015 SAR

Contract Identification
Appropriation: RDT&E
Contract Name: BLK 50 GCS Development (DO 89)
Contractor: General Atomics Aeronautical Systems, INC.
Contractor Location: 14200 Kirkham Way
Poway, CA 92064
Contract Number: FA8620-10-G-3038/89
Contract Type: Cost Plus Fixed Fee (CPFF)
Award Date: April 10, 2014
Definitization Date: April 10, 2014

Contract Price
Initial Contract Price ($M) Current Contract Price ($M) Estimated Price At Completion ($M)
Target Ceiling Qty Target Ceiling Qty Contractor Program Manager
141.4 N/A 7 141.4 N/A 7 206.2 209.2

Contract Variance
Item Cost Variance Schedule Variance
Cumulative Variances To Date (1/29/2016) -0.1 +1.0
Previous Cumulative Variances -- --
Net Change -0.1 +1.0

Cost and Schedule Variance Explanations

The unfavorable cumulative cost variance is due to the delayed start in program execution. The replanned discrete tasks
commenced in November 2015 and no additional overrun is projected at this time.

The favorable cumulative schedule variance is due to the program being ahead of schedule on several key tasks to
complete Preliminary Design Review (PDR) two months early.

General Contract Variance Explanation

Block 50 Ground Control Station development program conducted an Integrated Baseline Review (IBR) of the program in
August 2015. All actions related to the IBR have been successfully closed and the program is executing to an approved
baseline. As part of the IBR closure the contractor submitted an Over Target Baseline of $65M and a Period of Performance
extension of approximately 38 months.

Notes
This is the first time this contract is being reported.

March 23, 2016

UNCLASSIFIED 42
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MQ-9 Reaper December 2015 SAR

Deliveries and Expenditures

Deliveries
Percent
Delivered to Date Planned to Date Actual to Date Total Quantity
Delivered
Development 3 3 3 100.00%
Production 214 204 347 58.79%
Total Program Quantity Delivered 217 207 350 59.14%

Expended and Appropriated (TY $M)

Total Acquisition Cost 12015.5 Years Appropriated 15
Expended to Date 4727.3 Percent Years Appropriated 55.56%
Percent Expended 39.34% Appropriated to Date 7811.4
Total Funding Years 27 Percent Appropriated 65.01%

The above data is current as of February 10, 2016.

Ten aircraft have been conditionally accepted. Actual aircraft deliveries are less than planned due to contractor manpower
issues for aircraft integration, as well as Secure Triple-Link Modem Assembly (STMA) diminishing manufacturing sources &
material shortages (DMSMS). In order to facilitate these deliveries, the Government supplied STMAs via Government
Furnished Equipment (GFE). This GFE solution is a temporary fix until a new Generation 3 STMA is fully qualified which is
anticipated for February 2016. Further aircraft deliveries are pending fielding of operational flight program software and the
qualification of the Generation 3 STMA.

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MQ-9 Reaper December 2015 SAR

Operating and Support Cost

Cost Estimate Details

Date of Estimate: November 24, 2015
Source of Estimate: POE
Quantity to Sustain: 350
Unit of Measure: Aircraft
Service Life per Unit: 20.00 Years
Fiscal Years in Service: FY 2002 - FY 2044

The O&S costs are from the current POE which is based on historical costs and estimated future costs through 2044.
The O&S estimate includes all CAPE elements as detailed in the table on the following page. The MQ-9 Reaper has been
flying operations since 2006.

Historical costs are obtained from monthly Contractor Logistics Support (CLS) cost reports, Air Force Total Ownership
Cost (AFTOC) actuals, and other data sources. Future costs are based on flying hour projections, manpower projections,
number of operating locations, and applicable rates and factors. Flying hours are based on the number of anticipated
Combat Air Patrols (CAPs). The total MQ-9 Reaper life cycle flying hours are based on the Air Combat Command (ACC)
MQ-9 Reaper standup plan, ACC projected flight hours per CAP, and the defined MQ-9 Reaper life cycle. The attrition rate
is based upon the official Air Force Studies and Analysis MQ-9 Reaper attrition model. Quantity of aircraft per CAP will
continue to vary based on mission requirements and future operations.

Unit-Level Manpower costs are estimated using manpower projections. Unit Operations cost factors include fuel, training
munitions, and temporary duty costs. Maintenance costs include Operational-level, Depot-level (D-level), and
Government Furnished Equipment repair. Sustaining support includes D-level sustaining engineering and program
management and system specific training derived from actual costs from the AFTOC database, and converted to a cost
per flying hour. Continuing System Improvements costs include Reliability & Maintainability Enhancements and Software
Maintenance supported via the CLS contract. Indirect Support costs are based on factors from Air Force Instruction 65-
503 table A56-1, which were applied against manpower projections.

Sustainment Strategy
Sustainment of the MQ-9 Reaper systems is currently provided through CLS contracts with General Atomics,
Aeronautical Systems Incorporated (GA-ASI), and Raytheon. The CLS contracts include program management, logistics
support, configuration management, technical manuals, software maintenance, engineering technical services,
contractor field service representative support, contractor inventory control point, spares management, depot repair, flight
operations support, reliability and maintainability studies, maintenance data collection/entry and depot field maintenance.
Supported organizations include ACC, Air National Guard, Air Force Special Operations Command, Air Education and
Training Command. The Program Office (PO) is working to transition portions of CLS to a Public Private Partnership that
leverages original equipment manufacturer and organic capabilities. Currently, the Air Force Sustainment Center has
entered into a Public Private Partnership Agreement with GA-ASI and the Fleet Readiness Center-Southeast has entered
into a Public Private Partnership Agreement with Raytheon for depot repair on certain components for the MQ-9
Reapers and Multi-Spectral Targeting System, respectively.

Antecedent Information
The antecedent program for the MQ-9 Reaper is the MQ-1 Predator. The MQ-1 Predator O&S costs are based on the
current POE which utilizes the same methodology as the MQ-9 Reaper O&S estimate. The MQ-1 Predator O&S costs

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MQ-9 Reaper December 2015 SAR

are based on 268 aircraft and a service life of 21 years, with a planned divestiture of the program within the FYDP.

The MQ-1 Predator total BY 2008 O&S figure may be computed by multiplying the average cost per flying hour for each
cost element category (totaling $3.523K) by the total flying hours of the MQ-1 Predator program (2,025,397). The total MQ
-1 Predator O&S figure increased from the figure reported in the December 2014 SAR due to the extension of the planned
divestiture of the MQ-1 Predator to within the current FYDP. From a cost per flying hour perspective the MQ-9 Reaper's
costs vary slightly from its antecedent program, the MQ-1 Predator.

Annual O&S Costs BY2008 $M

MQ-9 Reaper MQ-1 Predator (Antecedent)
Cost Element
Average Annual Cost Per Aircraft Avg Annual Cost Per Aircraft
Unit-Level Manpower 1.588 0.409
Unit Operations 0.325 0.291
Maintenance 1.262 0.413
Sustaining Support 1.398 0.027
Continuing System Improvements 0.161 0.119
Indirect Support 0.696 0.071
Other 0.000 0.000
Total 5.430 1.330

The average cost per flying hour for a MQ-9 Reaper is $3.538K. The flying hour projection is based on the updated flying
hour profile received from ACC. The PO utilized a bottoms-up cost estimating approach to estimate the MQ-9 Reaper life
cycle cost.

Total O&S Cost $M

MQ-9 Reaper
Item MQ-1 Predator
Current Production APB (Antecedent)
Current Estimate
Objective/Threshold
Base Year 47215.4 51936.9 38011.0 7135.5
Then Year 65058.9 N/A 54763.5 N/A

The total O&S cost was derived through: i) analysis of manpower projections, and ii) actual historical data and estimated
out year data. The total O&S costs do not include disposal costs.

Equation to Translate Annual Cost to Total Cost

The average annual cost per aircraft is derived by dividing the total life cycle cost by the number of aircraft and number of
years the program is in operation. $38,011.0M (BY life cycle cost) / 350 (total aircraft) / 20 (years in operation) = $5.43M

O&S Cost Variance

BY 2008
Category Change Explanations
$M
Prior SAR Total O&S Estimates - Dec 41626.0
2014 SAR
Programmatic/Planning Factors 0.0
Cost Estimating Methodology -3615.0 Revised flying hour calculation methodology, resulting in a
decrease of projected flying hours.

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MQ-9 Reaper December 2015 SAR

Cost Data Update 0.0

Labor Rate 0.0
Energy Rate 0.0
Technical Input 0.0
Other 0.0
Total Changes -3615.0
Current Estimate 38011.0

Disposal Estimate Details

Date of Estimate: November 24, 2015
Source of Estimate: POE
Disposal/Demilitarization Total Cost (BY 2008 $M): Total costs for disposal of all Aircraft are 19.2

The MQ-9 Reaper disposal cost estimate is based on the current POE and assumes cold storage. The estimate utilizes
various factors such as aircraft quantity and weights to calculate shipping costs, demolition costs, and disposal of
hazardous materials.

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