The Price Of Power -- Sticking To Its Guns:
Why the Pentagon Is
Often Slow to Pursue
Promising Weapons
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Resistance and Neglect Kept
Drones From Soaring,
Despite Their Advantages
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The 'Arsenal Ship' Torpedoed

[Third in a series on military spending]

One night during the war in Kosovo, a band of Serb soldiers took control of a bridge, blocked the way with an armored vehicle, and began harassing would-be crossers. What they didn't know was that their undoing hovered overhead in the form of a giant mechanical bug.

The Predator, an unmanned U.S. aircraft, surveyed the scene from 20,000 feet and beamed an image of the Serb checkpoint and its precise coordinates back to NATO commanders in Italy. However, the Predator wasn't designed to finish the job; for that, an American fighter pilot was dispatched to bomb the checkpoint.

All told, the U.S. used roughly two dozen Predators and similar unmanned aerial vehicles, or UAVs, to fly missions during the 78-day war in Kosovo. Nine were shot down. "Those UAVs were willing to die for their country," says Gen. Michael Ryan, the Air Force's chief of staff.

UAVs have been viable alternatives to piloted planes since shortly after Francis Gary Powers's U-2 was shot down over the Soviet Union in May 1960. These drones can fly lower, longer and into more hazardous, missile-riddled airspace than any pilot would dare.

But the Defense Department has yet to fully exploit UAVs. Over the past 20 years, the Pentagon's spending on drones has totaled $2 billion -- roughly equal to what it pays for a single B-2 bomber and one-tenth of what it soon plans to spend every year on manned combat aircraft. With modest recent boosts, the Defense Department intends to spend $620 million on developing and buying UAVs next year, compared with the $3.1 billion the Air Force wanted for the controversial F-22 fighter. As a result, the UAV technology in current use remains far short of its potential, not yet capable of bombing runs and other more-advanced missions like those that claimed two manned fighter jets over Kosovo.

Ten years after the Cold War ended, the U.S. military's arsenal of weaponry remains dominated by big-ticket weapons such as tanks, aircraft carriers and fighter jets -- hardware that would have been especially useful if the standoff with the Soviets had ever turned hot. Today, this arsenal siphons spending from innovative equipment that many inside and outside the defense establishment say America must invest in to retain its military edge as the nature of modern warfare evolves. Among other types of equipment, experts point to UAVs and the so-called arsenal ship -- a mobile launch pad with a small crew and all manner of missiles -- as prime examples of equipment that is as high in potential as it is low in priority.

"The real problem with the Defense Department isn't fiscal, it's strategic," says Andrew Krepinevich of the nonprofit Center for Strategic and Budgetary Assessments in Washington. "It's not that they don't have enough money; it is how they spend the money they have."

FAVORING THE STATUS QUO

Several forces conspire to stifle unconventional weapons proposals. Most obvious is the easy familiarity of the big guns, planes and ships that helped make this the American Century. Rivalries among the services and within each branch tend to favor the status quo, too, as does the defense establishment's innate conservatism, which manifests itself in risk-aversion, impatience and intolerance of failure. And beyond the Pentagon, entrenched business interests, old-fashioned congressional pork-barreling and political intrigue have proved to be powerful agents working against change.

The impact of these forces is evident in the history of UAVs, which have been the wave of the future for the past quarter of a century. Military strategists love the idea. Former Pentagon acquisition chief Paul Kaminski predicts that the next century could bring an end to manned combat aircraft altogether. Congress has repeatedly signaled its approval. Backers also have included some Air Force higher-ups, including Gen. Ryan, the chief of staff, and his father, who served as the service's top officer 30 years ago.

But consider what happened in 1993 when Congress, five years after unsuccessfully prodding the Air Force and the rest of the Pentagon to take UAVs more seriously, created the Defense Airborne Reconnaissance Office to oversee development of unmanned aircraft throughout the military. The office met continual resistance from Air Force officials who pushed for ever more-advanced manned fighters, to the point where the Pentagon now plans to spend $340 billion on 3,700 of them over 30 years -- even though the U.S. remains unchallenged in the air.

Gen. Kenneth Israel, who ran the new office, frequently found himself playing defense. Lobbying for funds on Capitol Hill, he would see his message muddied by military officials who wanted money for manned aircraft. Inside the Pentagon, the same crowd would question his data. At one meeting, he detailed how much money the Air Force could save by using UAVs for reconnaissance, instead of manned U-2s and SR-71s. A colleague stated flatly that he didn't believe the figures.

"In a typical work year, I had about 250 meetings, and most of them were just like this," says Gen. Israel, now retired and working with defense consultants Burdeshaw Associates Ltd. in Bethesda, Md. "It was a struggle every day to make people aware of what UAVs could do." The pilot-dominated Air Force hierarchy, he adds, has always been biased against UAVs. "Critics determined that the best way to slow down a bold and innovative idea was to load it down with cultural innuendoes and inaccurate comparisons between manned and unmanned aircraft," he says.

Air Force Gen. David Nagy, who oversees acquisitions of UAVs and other equipment, acknowledges that "there's been a lot of skepticism" in the service toward UAVs, but, he adds, "There's a recognition now that there's plenty of room for manned and unmanned."

Pilotless reconnaissance aircraft got their first big tryout a few years after Mr. Powers parachuted from his U-2 into an international incident. To cut pilot losses, the Pentagon deployed unmanned vehicles called Lightning Bugs over Southeast China and North Vietnam. Launched over the Gulf of Tonkin from a C-130 cargo plane and piloted by joystick by engineers from maker Ryan Aeronautical, the jet-powered drones flew 3,500 missions during the Vietnam War.

Some were used to spy. Others scattered leaflets from President Nixon, urging North Vietnamese combatants to "please quit this foolishness." An early U.S. drone snapped the first photo of a still top-secret version of a Soviet MiG fighter. Another drone had eyes and teeth painted on the front and was nicknamed the Tomcat. A few played chicken with enemy fighters.

But a political power-play helped deny the program wider support, industry executives and military historians say. Washington officials, tightly controlling the war from the Pentagon, insisted that they view the resulting black-and-white reconnaissance photos first, so they could relay orders back to Southeast Asia. That caused delays, which diminished UAVs' usefulness and made them a harder sell once the war was over and the U.S. slashed defense spending. Meanwhile, the Air Force and the Navy were increasingly -- and justifiably -- worried that they were being outdone by advances in Soviet fighter aircraft, so the services pushed hard for new fighters and bombers, especially those employing stealth capabilities.

"It wasn't difficult for someone wearing a white scarf to decide where they wanted to put their funding requirements. If the money was limited, they'd put it into manned aircraft," recalls Norm Sakamoto, a Ryan Aeronautical vice president involved in UAV work since the late 1950s.

Other times, geopolitical concerns came into play. While the war was still under way, Ryan Aeronautical engineers designed a radar-evading, highflying, long-range UAV to spy on the Chinese. By the early 1970s, the U.S. was almost ready to deploy 27 of these Compass Arrows. But according to military historians, President Nixon killed the program to help pave the way for normalized relations with the Chinese after his historic summit meeting with Mao Tse-tung.

After that, the Army and the Navy periodically dabbled in UAVs. With no U.S. alternative, the Navy in the mid-1980s bought an Israeli-designed UAV system, called the Pioneer. After the Navy bombed Fayluka Island just east of Kuwait City during the Gulf War, some Iraqis tried to surrender to a Pioneer flying overhead. Another drone used in the Persian Gulf, developed in less than a month by Northrop Grumman Corp., was made to look like U.S. fighter aircraft on Iraqi radar; in the early hours of the air war, these drones flushed out Iraqi antiaircraft defenses so that real F-16s could bomb them.

Unpopular new programs often fall victim to the Pentagon's longstanding aversion to the risk of failure. After winning a joint Army-Navy competition against McDonnell Douglas Corp. (since acquired by Boeing Co.) in the early 1990s, TRW Inc. set to work building the Hunter, a sophisticated drone that had to be able to survey a battlefield from 150 miles away. But three test-flights ended in crashes, and the product was delivered 10 months late. The Pentagon grew impatient and killed the project, though TRW, as required by its contract, eventually fixed the problem and delivered several usable Hunters. Some were later used to train personnel to fly UAVs, while others sat unused in an Arizona depot until commanders desperate for UAVs to fly reconnaissance missions in Kosovo dusted them off.

The Hunter's successor, the Outrider, succumbed to "goldplating," whereby multiple requirements are piled on a proposed weapon by various branches until it becomes untenable or is overtaken by technology. Alliant Techsystems Inc., based in Hopkins, Minn., won the contract to build the Outrider and worked on it for two years as the services kept asking for new gadgetry. The Army, seeking a cheap way to track enemy movements, wanted the Outrider to be small and simple, but the Navy wanted it to incorporate costly and somewhat bulkier new technology allowing it to take off and land vertically like a helicopter, industry executives say.

"It was a complete failure to assume the mission requirements of the Marine Corps or Navy would be the same as the Army," says Katrina Herrick, a defense consultant who has studied UAVs for more than a decade. "They ended up with a system that couldn't meet anyone's needs and was canceled" in June 1998. Pentagon officials privately concede that an accumulation of too many disparate requirements did in the program. (The Pentagon has since ditched the one-UAV-fits-all approach and is letting the individual services procure their own systems in the future.)

Another factor working against UAVs was directly related to their biggest benefit. Big-ticket projects such as fighter jets and aircraft carriers employ lots of people, and the defense industry sprinkles that work in key congressional districts to sustain political support. That wasn't the case with UAVs, which are cheaper and require fewer people to build them, industry executives say.

Eventually, however, the other services' interest in UAVs compelled Air Force officials to become more engaged in the effort. The Predator, the aircraft used in Kosovo, was a turning point. The Hunter and Outrider programs were all but dead, and the Army had little money to support a UAV program itself. Meanwhile, Gen. Israel's airborne reconnaissance office had begun developing the Predator and was looking for a branch to bring it to fruition. So the Army cut a deal with the Air Force in the mid-1990s: The Army would let the Air Force run the show as long as it took the program seriously and let the Army have unfettered battlefield access to Predators, Army and Air Force officials say.

Without a single drone in hand, the Air Force started training two new UAV squadrons. Built in six months by San Diego-based General Atomics Aeronautical Systems Inc., the Predator was adapted from a classified program known as the Gnat, which it vaguely resembles. It has a 28-foot wingspan, two squat fins in the back near its propeller and a rounded nose that holds a camera and radar that can see through smoke and clouds. It is piloted remotely by operators sitting in a camouflaged Humvee equipped with two big satellite dishes and other gadgets that relay signals and images from the aircraft to battlefield commanders.

Even before testing was finished, the Predator was in heavy demand. U.S. officials working with the United Nations were desperate for UAVs to help monitor Iraqi weapons programs after the Gulf War, but the only test models already had been drafted for service in Bosnia. "There weren't enough Predators to go around, and that hurt" inspection efforts, says Scott Ritter, for eight years a top U.N. weapons inspector in Iraq.

Later, they proved indispensable for spying on targets in Kosovo and enforcing no-fly zones in Iraq, where together they have flown almost 1,000 missions totaling 8,500 hours. They also were used to make sure people had been evacuated in anticipation of an attack, to locate mass graves and, in the end, to verify that the Serbs were retreating as required by the peace accord. The Air Force now plans to deploy 12 Predator systems, each of which comes with four UAVs and costs $24 million, and General Atomics is at work on an upgraded version.

"The culture is changing," says Nick Yorio, director of UAV programs at TRW. "The one thing fighter pilots like less than UAVs is being shot down over enemy territory."

After the Kosovo war ended in June, Defense Secretary William Cohen signaled the shift: "We are at a crucial juncture in airborne reconnaissance," he wrote in a memo, comparing today's drones to manned aircraft 40 years ago. "We cannot overlook the value of the UAV industrial base."

The Air Force traces the about-face to recent advances that allow UAVs to pinpoint target locations, to transmit precise imagery quickly and to be built more cheaply. "It's where money came together with capability," says Gen. Ryan of the Air Force. The Pentagon was also prodded by recent incidents of pilots being shot down over Iraq and Bosnia.

Now, more sophisticated UAVs are on the horizon. The Global Hawk, currently being tested by Ryan Aeronautical (acquired this year by Northrop), is a white, Boeing 737-size, dolphin-shaped drone. It can fly halfway around the world, hover at an altitude of 12 miles for 38 hours, survey an area the size of Illinois, photograph something as small as a Stetson and release a decoy if it senses an antiaircraft threat. The Defense Advanced Research Projects Agency is developing "micro UAVs" that are no longer than six inches and weigh less than three ounces. Lockheed Martin Corp. wants to make one that lets soldiers see over the next hill or around the next corner.

Next, the Pentagon will edge further into the fighter pilot's domain with bomb-dropping drones. Boeing this year won the $131 million Darpa contract to develop and test such weapons, which are expected to cost less than one-third the price of a roughly $35 million Joint Strike Fighter, the Pentagon's next ground-attack jet.

But most of these smart UAVs are years from deployment -- bomber drones won't be available until sometime around 2010 -- largely because the concept remains underfunded. "UAV technology could have evolved sooner with more money in the late 1970s," says Mr. Yorio of TRW. And even with the recent pro-UAV momentum, supporters worry that the Pentagon's latest commitment is just the usual fleeting boost that seems to follow every war. "We seem to be providing at best a lukewarm endorsement," says Gen. Israel.

While UAVs seem to be earning grudging acceptance in the defense establishment, the arsenal ship hasn't -- even though, among all the services, the Navy arguably got off to the fastest start in adjusting to the post-Cold War world. In 1992, it took three giant steps: It began aggressively closing unneeded bases; it retired the last of its battleships to cut costs; and, recognizing that it no longer needed to wrestle Soviets for control of the oceans, it released a study called "From the Sea" that concluded that the Navy needed to project power ashore.

"Our strategy has shifted from a focus on a global threat to a focus on regional challenges," the Navy concluded. "We must structure a fundamentally different Naval force."

To fulfill that promise, two rising three-star officers -- Vice Adm. William Owens and Marine Lt. Gen. Charles Krulak -- began backing an innovative vessel, the arsenal ship. The idea had been floating around the Navy for years, but hadn't received much high-level attention.

The double-hull monster would carry as much anti-ground-force firepower as an aircraft carrier, but with a crew just one-hundredth the size. Its grab-bag of missiles -- big and small, long- and short-range, dumb, smart and "brilliant" -- could reach deep inland and, for example, stop a tank column in its tracks. Its reach would exceed that of carrier-based fighter jets, while its flexibility would outdo U.S.-based B-2 bombers, which are limited to nighttime raids and can't react quickly to changing circumstances. It was hailed as only the second new warship idea since World War II, the first being the ballistic-missile submarine.

There would be only seven officers aboard and only two sailors operating the mess. All 50 crewmembers would clean their own rooms and do their own laundry. To counter takeover threats -- a major worry with such a small crew -- the ship's deck would bristle with antipersonnel mines wired to detonators elsewhere on the ship. Its mine-resistant double hull wouldn't have the usual "V" shape of a warship, but the sturdier "U" of a cargo ship. In combat zones, it would take on water and lower itself so that it just broke the surface, and water jets would shoot up the sides to further veil it from radar.

In 1994, Adm. Owens and Gen. Krulak took the idea to Adm. Jeremy "Mike" Boorda, the new chief of naval operations. Adm. Boorda himself was a departure from Navy tradition. As the first enlisted man to rise to the Navy's top slot, he was something of a maverick who tried to take the service in new directions and was greeted skeptically by much of the rest of the brass. "Mike had a vision of the Navy of the future," recalls John Douglass, then the Navy's top acquisition official. "He understood Washington, how to use innovative concepts not only to further technology, but to get more money for his budget."

As the Navy's former personnel chief, the admiral was quick to grasp one of the proposal's principal benefits: In an era of recruiting shortfalls, the Navy could operate with thousands fewer sailors. He also had an ulterior motive, according to current and former Pentagon officials. As he watched the limited progress being made with UAVs, he worried that a bomb-dropping drone might someday undercut the rationale for aircraft carriers, and he wanted to be ready with an alternative.

Not everyone was convinced, and opponents had some legitimate concerns. Congressional analysts worried that the arsenal ship concentrated too much firepower in a vulnerable place. With such a small crew and so many missiles, reloading would require either that the vessel chug back to the U.S. or that hundreds of missiles and countless supplies be transferred on the roiling ocean waters. And there were other assets in the military inventory, from submarines to bombers, that some analysts argued could also handle strikes deep in enemy territory.

But the ship's powerful backers at the Pentagon were convinced that such concerns could be addressed, and for a while in the mid-1990s, the project looked unstoppable, especially when two main proponents landed major promotions. Adm. Owens became vice chairman of the Joint Chiefs of Staff, and Gen. Krulak became commandant of the Marine Corps. In March 1996, the Pentagon declared the arsenal ship to be "among the highest priority programs within the Navy."

In a bureaucracy, attempts to change course are subject to attack from inside and outside. In the Pentagon, competition among the four branches intensified as the defense budget shrank during the 1990s. Different factions within each service are sometimes pitted against each other, too.

Adm. Boorda's ability to repel attacks from other branches was limited, but he was seasoned enough to know that the project was even more vulnerable from within, so he moved the development program out of the Navy and into the high-tech precincts of the Pentagon's Defense Advanced Research Projects Agency, a separate organization that could insulate the project from the Navy bureaucracy.

"Mike Boorda didn't believe the Navy could do it on its own, because of the culture," says Larry Lynn, director of Darpa at the time.

Then the program suffered a setback from an entirely unexpected quarter. On May 16, 1996, Adm. Boorda walked into the garden behind his house in the Washington Navy Yard and shot himself in the heart. The admiral was replaced by a carrier pilot, Jay Johnson. For the next few years, the new man would have his hands full repairing the Navy after years of strife from the Tailhook sexual-abuse scandal and its leader's suicide.

In July 1996, the Navy picked five industry teams to compete for the contract to design the ship. The winner was to be picked in 1998 so the first of six ships could be launched in mid-2000. To encourage innovation, the Navy gave only the broadest guidance to its bidders: a ship with 50 sailors and 10 times as many missiles for no more than $500 million.

The result provided the ship with a new set of opponents. Each service has its favored suppliers who themselves can tap powerful forces to resist changes that jeopardize their interests. In the case of the arsenal ship, Northrop surprised everybody when it submitted the best initial proposal, Pentagon insiders say. Northrop was an alien force to many in the Navy -- an Air Force contractor best known for the B-2 bomber. And its radar-evading design, an unconventional system that remains largely secret, threatened to bring in new suppliers, excluding companies with long and lucrative Navy relationships. Moreover, Northrop's partner on the arsenal ship was San Diego-based National Steel & Shipbuilding Co., a company with little economic clout in California and little political clout in Washington that has since been acquired by General Dynamics Corp. Yards in Mississippi and Virginia, by contrast, are major employers that can usually count on home-state senators for support -- Majority Leader Trent Lott and the Armed Services Committee Chairman John Warner, respectively.

The arsenal ship "was a threat to the carrier, and that was a threat to Newport News Shipbuilding," the nation's sole aircraft-carrier builder, says Thomas Donnelly, a former House Armed Services Committee aide. "And that, in turn, was a threat to the Virginia delegation." A spokeswoman for Newport News Shipbuilding says the company never lobbied against the arsenal ship and notes that the company belonged to one of the bidding groups.

The final blow came from the opponents Adm. Boorda had feared most: The Navy's own began a subterranean campaign against the ship. Their motivation was largely parochial. Some design proposals had the ship's firepower controlled by ground forces -- a concept that spooked traditionalists, according to Pentagon insiders. Further troubling old-schoolers, another proposal called for the ship to stay in place for long periods, with relief crews flown in from afar, making it not much of a ship at all.

The ship also threatened powerful narrow constituencies in the Navy. "Mike Boorda saw this as ultimately replacing the carrier, and that was an unpopular view," says Mr. Lynn, the former Darpa chief. Finally, submariners were on the attack, for they wanted to see their own excess ballistic-missile submarines -- not a new arsenal ship -- used to launch conventional missiles.

The result was what a key congressional supporter of the proposal, Pennsylvania Democrat Paul McHale, calls "an inexcusable lobbying campaign" against it. "Subordinate Navy officers undercut the clear guidance of their leadership," says former Rep. McHale, a Marine veteran. "At the same time that the secretary of the Navy was asking me to support the ship, Navy officers were on the Hill making it clear that they wouldn't object if the arsenal ship were killed."

Rather than trying to kill it outright, Mr. McHale adds, the opponents employed bureaucratic stealth, quietly urging Congress to cut its budget just enough to force the Navy to do the deed itself. And sure enough, Congress signaled its puzzlement at the mixed signals and trimmed the arsenal ship's budget. In response, the Navy announced in October 1997 that it was "reluctantly" killing the project due to "insufficient funding."

Adm. Donald Pilling, vice chief of Naval operations, says now that while the arsenal ship had some allure, it ran into problems both within the Navy, where some groups, including submariners, had competing ideas, and on Capitol Hill, where "Congress wasn't really a full supporter." Ultimately, he says, "This was a matter of allocating shortfalls. That's what we do for a living."

Three months after the Navy ended the project, the National Defense Panel, in a major federal critique of the post-Cold War defense establishment, explicitly criticized that decision and other moves aimed at protecting existing weapons programs. The Pentagon largely ignored those comments, but now they may return with a vengeance: Some key National Defense Panel members are advising GOP presidential front-runner George W. Bush to advocate more innovation in the military.

"We need to pursue promising ideas," Gov. Bush said last month, "like the arsenal ship."

The idea of the arsenal ship isn't completely dead, but its proposed successor, the DD-21, probably will be half again as expensive, carry much less firepower and require twice as many sailors. And the first one won't be launched until around 2008.

As for two of the idea's original proponents, Adm. Owens and Gen. Krulak have both retired for careers outside the defense industry -- the admiral in satellite communications, the general in banking. Both still puzzle over why their old comrades doggedly resisted the idea.

"They aren't bad guys," says Mr. Owens. "They aren't trying to make bad decisions. Their thinking is kind of, `This is what we are all accustomed to, we know how it works, and to break the mold is dangerous.' . . . I think that not breaking the mold is dangerous."