Unmanned Aerial Systems (UAS) Market Overview

July 18, 2012 Contents . Definitions . Facts & Figures . UAS Budgets and Spending . Trends and Challenges . Future of Unmanned Aerial Systems . Summary and Recommendations . Appendix A: DoD UAS Acquisition Costs . Appendix B: DoD Current and Future Domestic UAS Locations

2 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Definitions . Unmanned Aerial Systems (UAS) . Refers to systems whose components include the necessary equipment, network, and personnel to control an unmanned aircraft . UAS is a broader term that includes equipment, networks, and personnel in addition to Unmanned Aerial Vehicles.

. Unmanned Aerial Vehicle (UAV) . Refers to a powered aerial vehicle that does not carry a human operation, uses aerodynamic forces to provide vehicle life, can fly autonomously or be piloted remotely, can be expendable or recoverable, and can carry a lethal or nonlethal payload . Commonly known as “drones”.

. In practice, the terms UAS and UAV are often used interchangeably

Source: CRS Report R41284, “Intelligence, Surveillance, and Reconnaissance (ISR) Acquisition: Issues for Congress,” December 27, 2011.

3 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Facts & Figures . Dept. of Defense (DoD) spending on UAS has increased from $284 million in FY00 to $3.9 billion in FY12

. DoD’s unmanned aircraft inventory increased more than 40-fold from 167 aircraft in 2002 to nearly 7,500 in 2010

. In 2009, DoD completed almost 500,000 UAS flight hours just in support of Operation Enduring Freedom and Operation Iraqi Freedom

. In May 2010, unmanned systems surpassed one million flight hours

. In November 2010 unmanned systems achieved one million combat hours

Sources: CRS Report R41284, “Intelligence, Surveillance, and Reconnaissance (ISR) Acquisition: Issues for Congress,” December 27, 2011; CRS Report R42136, “Unmanned Aerial Systems,” January 3, 2012; Dept. of Defense, “Unmanned Systems Integrated Roadmap: FY2011 – 2036.” 4 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Facts & Figures

Source: CRS Report R42136, “Unmanned Aerial Systems,” January 3, 2012.

5 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved DoD Unmanned Systems Budget by Domain $7,200.00 $7,000.00 $6,800.00 $6,600.00

$6,400.00 $6,200.00 $6,000.00 $ Millions $ $5,800.00 $5,600.00 $5,400.00 $5,200.00 FY11 FY12 FY13 FY14 FY15 Maritime $47.41 $113.08 $154.32 $160.94 $165.62 Ground $227.09 $259.83 $261.57 $249.16 $245.96 Air $6,055.36 $5,823.59 $6,049.48 $6,381.47 $6,510.72

Source: Dept. of Defense, “Unmanned Systems Integrated Roadmap: FY2011 – 2036.” 6 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved DoD Unmanned Aerial Systems Budget Estimates* $7,000.00

$6,000.00

$5,000.00

$4,000.00

$3,000.00 $ Millions $ $2,000.00

$1,000.00

$0.00 FY11 FY12 FY13 FY14 FY15 O&M $1,596.74 $1,631.38 $1,469.49 $1,577.65 $1,825.45 Proc. $3,351.90 $2,936.93 $3,040.41 $3,362.95 $3,389.03 RDT&E $1,106.72 $1,255.29 $1,539.58 $1,440.57 $1,296.35

*Sum of O&M. Proc., and RDT&E values may not equal Air Domain value from previous slide due to rounding. Source: Dept. of Defense, “Unmanned Systems Integrated Roadmap: FY2011 – 2036.” 7 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved DoD Prime Contract Spend on PSC 1550 – Drones* ($K) $2,500,000

$2,016,079 $2,000,000

$1,464,626 $1,500,000 $1,117,849

$1,000,000 $ Thousands $ $683,231 $951,369 $530,587 $500,000 $336,369 $539,864 $131,358 $290,608 $0 $129,643

* PSC 1550 is not exclusive to unmanned aerial systems. It may also include ground and maritime unmanned systems. Source: GovWin IQ analysis of FPDS contract data. 8 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved DoD Prime Contract Spend on PSC 1550 – Drones* by Component ($K) $1,600,000 $1,400,000

$1,200,000 $1,000,000 $800,000 $600,000 $ Thousands $ $400,000 $200,000 $0 FY08 FY09 FY10 FY11 USSOCOM $6,003 $16,285 $55,474 $85,754 Air Force $65,534 $32,200 $174,639 $233,430 Navy $40,243 $236,273 $86,737 $201,054 Army $1,006,069 $670,574 $1,152,308 $1,496,240

* PSC 1550 is not exclusive to unmanned aerial systems. It may also include ground and maritime unmanned systems. Source: GovWin IQ analysis of FPDS contract data. 9 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Top 20 Federal Prime Contractors for PSC 1550 - Drones* ($K)

PARENT COMPANY FY08 ($K) FY09 ($K) FY10 ($K) FY11 ($K) TOTAL ($K) GENERAL ATOMICS INTERNATIONAL $204,247 $270,413 $446,462 $660,611 $1,581,732 TEXTRON INC $552,870 $5,904 $464,135 $502,769 $1,525,677 NORTHROP GRUMMAN CORPORATION $180,645 $330,488 $182,641 $258,578 $952,352 AEROVIRONMENT INCORPORATED $93,203 $94,007 $157,155 $247,573 $591,938 COMPOSITE ENGINEERING, INC (CEi) $40,610 $8,825 $71,081 $62,604 $183,120 HONEYWELL INTERNATIONAL INC $4,922 $101,266 $22,893 $15,354 $144,436 BOEING COMPANY $692 ($50) $23,297 $90,318 $114,256 ALLIANT TECHSYSTEMS INC (ATK) $13,284 $25,689 $33,591 $38,897 $111,461 BAE SYSTEMS PLC $24,022 $23,196 $28,356 $18,566 $94,141 TCOM, L.P. $30 $44 $13 $88,542 $88,629 ORBITAL SCIENCES CORPORATION $415 $46,277 $31,755 $813 $79,260 INSITU GROUP, THE (INC) (wholly owned subsidiary of Boeing Company) $138 $32,049 $7,851 $29,928 $69,966 L-3 COMMUNICATIONS CORPORATION $4 $6,612 $6,801 ($0) $13,418 RALLY POINT MANAGEMENT, LLC $12,384 $12,384 AEROSTAR INTEGRATED SYSTEMS JV $6,151 $6,151 NEANY, INC $219 $1,974 $3,635 $5,828 AURORA FLIGHT SCIENCES CORP $4,986 $4,986 GICHNER SYSTEMS GROUP INC (a Kratos Defense & Security Solutions, Inc Company) $311 $2,067 $955 $126 $3,458 AEROSTAR INTERNATIONAL, INC $3,206 $3,206 CANADIAN COMMERCIAL CORPORATION (CCC) $1,164 $630 $476 $851 $3,121 * PSC 1550 is not exclusive to unmanned aerial systems. It may also include ground and maritime unmanned systems. Source: GovWin IQ analysis of FPDS contract data. Links require GovWin IQ FPDS Vendor Profiles Subscription. For more info click here 10 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Top 20 NAICS Associated With PSC 1550 - Drones* ($K) NAICS DESCRIPTION FY08 ($K) FY09 ($K) FY10 ($K) FY11 ($K) TOTAL ($K) 336411 - Aircraft Manufacturing $968,757 $84,443 $1,255,046 $1,755,989 $4,064,236 336410 - Aerospace Product and Parts Manufacturing $788,248 $788,248 541330 - Engineering Services $112,740 $78,106 $113,500 $49,344 $353,690 336413 - Other Aircraft Parts and Auxiliary Eq Manuf ($576) $96 ($8,910) $170,903 $161,513 336414 - Guided Missile and Space Vehicle Manuf $37,538 $64,910 $55,920 $158,367 334290 - Other Communications Equipment Manuf $51,510 $51,510 611512 - Flight Training $12,384 $12,384 541380 - Testing Laboratories $2,955 $2,955 336412 - Aircraft Engine and Engine Parts Manufacturing $2,330 $2,330 541710 - R&D in the Physical, Engineering, and Life Sciences ($475) $489 $1,477 $257 $1,747 541712 - R&D in the Physical, Engi & Life Sciences (except Biotech) $50 $1,000 $1,050 423410 - Photographic Eqand Supplies Merchant Wholesalers $875 $875 334511 - Search, Detect, Nav, Guid, Aero & Nautical Sys & Instr Manuf $746 $38 $784 326299 - All Other Rubber Product Manufacturing $397 $397 541990 - All Other Professional, Scientific, and Technical Services $41 $121 $163 488190 - Other Support Activities for Air Transportation $95 $95 334515 - Instrument Manuf for Measuring & Testing Elec & Electric Sig $54 $13 ($0) $67 334510 - Nav, Measuring, Electromedical & Control Instruments Manuf $58 $58 339999 - All Other Miscellaneous Manufacturing $49 $49 423860 - Transportation Equipment & Supplies Merchant Wholesalers $25 $25

* PSC 1550 is not exclusive to unmanned aerial systems. It may also include ground and maritime unmanned systems. Source: GovWin IQ analysis of FPDS contract data. 11 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Top Drone Purchasing Agencies: FY08-FY11 ($K)

AGENCY FY08 ($K) FY09 ($K) FY10 ($K) FY11 ($K) TOTAL ($K) Army $1,006,069 $670,574 $1,152,308 $1,496,240 $4,325,190 Navy $40,243 $236,273 $86,737 $201,054 $564,307 Air Force $65,534 $32,200 $174,639 $233,430 $505,803 U.S. Special Operations Command $6,003 $16,285 $55,474 $85,754 $163,515 Customs and Border Protection $1,362 $13,691 $33,995 $49,048 Federal Highway Administration $1,000 $1,000 National Oceanic And Atmospheric Admin $97 $13 $110 Federal Supply Service $24 $16 $39 $15 $15 National Aeronautics And Space Admin $12 $12 U.S. Coast Guard $1 $1

* PSC 1550 is not exclusive to unmanned aerial systems. It may also include ground and maritime unmanned systems. Source: GovWin IQ analysis of FPDS contract data. Links require a GovWin IQ Agency Profiles Subscription. For more info click here. 12 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Drone Program of Record Inventory Levels Planned Through FY2017

Source: Dept. of Defense, “Report to Congress on Future Unmanned Aircraft Systems Training, Operations, and Sustainability,” April 2012. 13 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Current UAS Missions

. Intelligence, Surveillance, and Reconnaissance (ISR) . Reconnaissance, Surveillance, and Target Acquisition (RSTA) . Electronic Warfare (EW) . Anti-Surface Warfare (ASUW) . Mine Warfare (MIW) . Explosive Ordnance Disposal (EOD) . Force Protection/Strike . Some UAS carry precision-guided weapons to attack ground targets, and more are being weaponized, although this is still adding strike capability to systems originally designed for reconnaissance . A separate class of UAS, called unmanned combat air vehicles, or UCAVs is being designed from the ground up to carry out combat missions

Source: CRS Report R42136, “Unmanned Aerial Systems,” January 3, 2012. 14 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS by Group

Source: Dept. of Defense, “Unmanned Systems Integrated Roadmap: FY2011 – 2036.” 15 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS Capabilities by Program

Source: Dept. of Defense, “Unmanned Systems Integrated Roadmap: FY2011 – 2036.” 16 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS Trends and Challenges . More UAS personnel are needed . As of December 2011, the Air Force had a shortfall of 338 UAV pilots and 245 UAS sensor operators . With USAF on track to receive more MQ-9A Reaper drones over the next several years, they will need about 1,400 more pilots and sensor operators by 2015

. Interoperability . Different drone manufacturers currently install drones with proprietary control software . Although the Pentagon has several different types of UAS, each has its own unique controller; and there is currently no system that controls multiple drones at once . The Pentagon’s UAS Control Segment (UCS) is looking to develop a solution that is akin to an App Store where drone control teams can “shop” for mission specific applications and services . The goal is to allow pilots to go from controlling one drone to controlling and sharing information across a fleet of drones

Sources: Dept. of Defense, “Unmanned Systems Integrated Roadmap: FY2011 – 2036”; Wired.com Danger Room blog, “War With Friends: Pentagon Eyes a Drone App Store,” June 18, 2012. 17 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS Trends and Challenges (cont.) . Cybersecurity . Vulnerabilities with the Global Positioning System (GPS) can be exploited by an enemy and used to “hijack” a drone . In a test sponsored by the Dept. of Homeland Security, a team from the University of at Austin successfully “spoofed” a drone – feeding false information to its GPS in an effort to bring it down . The university team accomplished this with equipment worth only $1,000

. Iran claims to have successfully brought down a U.S. RQ-170 Sentinel in December 2011 by using a cyber attack . Defense officials confirm a drone was lost to Iran, but will not say whether it was due to an internal malfunction or a malicious cyber-attack

Sources: GCN, “Domestic drones can be hijacked, turned into weapons, researchers show,” June 29, 2012; Wired.com Danger Room blog, “Drone Hijacking? That’s Just the Start of GPS Troubles,” July 6, 2012; ABC News, “Is U.S. Drone Shown on Iran TV Real?” December 8, 2011. 18 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS Trends and Challenges (cont.) . Problems with the Army’s Gray Eagle program . Gray Eagle is intended to be Army’s version of the Air Force’s Predator drone

. In March 2011, DoD noted the Gray Eagle had “poor reliability across all major subsystems”

. Army remains committed to the Gray Eagle: it has requested $150 million for construction costs and $518 million in procurement funding for FY13

. Army’s reluctance to give up on the Gray Eagle is partially out of concern of losing influence over drone programs to the Air Force

. Army leaders contend that problems are arising mostly because they are pushing the platform beyond its intended mission – focusing on adapting field capabilities now and worrying about performance issues later

Sources: Wired.com Danger Room blog, “’Gray Eagle’ Drone Fails All The Time, But Army Still Wants More,” June 15, 2012; DoDBuzz.com, “Army: Gray Eagle ain’t perfect, but we’ll take it,” June 28, 2012.

19 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS Trends and Challenges (cont.) . Is there too much emphasis on UAS at the expense of other intelligence collection and warfighting methods? . Former Director of National Intelligence Dennis Blair “said that discussions inside the White House [in 2009 and 2010] of long-term strategy against Al Qaeda were sidelined by the intense focus on strikes,” which Blair compared to the flawed emphasis on body counts during the Vietnam War . Retired Special Operations commander Gen. Stanley McChrystal recently stated: “I hope we don’t use [drones] to the exclusion of teaching people [foreign] languages, [and] sending people to live [in foreign countries]” . While UAS are effective at what they do, they cannot see inside buildings or assess an enemy’s intentions – a situation that can lead to civilian casualties . The use of drones is having a negative effect on U.S. foreign policy in key areas of the world . Use of UAS in Pakistan to take out suspected terrorists have already caused civilian deaths and injuries, which has handed propaganda victories to Taliban and al Qaida sympathizers within Pakistan’s military and government . Pakistan is using American “drone war” mistakes as leverage in negotiations to allow the U.S. military to use Pakistani ports to send military equipment home from Afghanistan as military operations wind down

Sources: Wired.com Danger Room blog, “Stan McChrystal, Drone Skeptic,” July 1, 2012; New York Times, “Secret ‘Kill List’ Proves a Test of Obama’s Principles and Will,” May 29, 2012; DoDBuzz.com, “Pakistan blockade stalemate costs U.S. $2.1B,” July 2, 2012.

20 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS Trends and Challenges (cont.) . The President’s drone target “kill list” . According to The New York Times, President Obama “has placed himself at the helm of a top secret ‘nominations’ process to designate terrorists for kill or capture” . According to the Times, “If the [CIA] did not have a “near certainty” that a strike would result in zero civilian deaths, Mr. Obama wanted to decide personally whether to go ahead” . In the first three years of his term, President Obama has authorized 268 covert drone strikes against enemy targets – five times more than the number of covert drone strikes authorized by President Bush over his eight years in office . President Obama’s direct involvement in the drone war could have profound long- term effects on U.S. foreign policy as well as presidential powers . Previous administrations maintained veil of plausible deniability for the President . Heated foreign relations are more easily cooled if unpopular drone strikes can be attributed to battlefield commanders or other senior administration officials who can be held to account

Sources: New York Times, “Secret ‘Kill List’ Proves a Test of Obama’s Principles and Will,” May 29, 2012; Rolling Stone, “The Rise of the Killer Drones: How America Goes to War in Secret,” April 16, 2012.

21 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS Trends and Challenges (cont.) . National Airspace Integration . The demand for airspace to test new systems and train UAS operators has quickly exceeded the current airspace available for military operations

. DoD UAS operations conducted outside of restricted, warning, and prohibited areas are authorized only under a (temporary) Certificate of Waiver or Authorization (COA) from the FAA

. The current COA process is inadequate to provide the level of airspace access necessary to accomplish the wide range of DoD UAS missions at current and projected operational tempos

. This situation will be exacerbated as operations in Southwest Asia wind down and unmanned assets are returned to bases in the U.S.

Source: Dept. of Defense, “Unmanned Systems Integrated Roadmap: FY2011 – 2036”. 22 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved UAS Trends and Challenges (cont.) . Debate over domestic uses for drones . Customs and Border Protection already employs drones for surveillance of the Southwest border with Mexico . Other federal, state, and local agencies are eager to add unmanned aerial systems to their law enforcement tools . Civil libertarians and regular citizens are concerned that domestic UAS fleets could be used by government and private entities in ways that infringe on individuals’ privacy . Critics are also worried about extreme scenarios such as domestic drones being hacked and used as weapons in 9/11-style attacks . Rep. Rush Holt (D-NJ) recently introduced an amendment to a Homeland Security bill that would prevent DHS from adding weapons to its drones – including those used on the border . Sen. Rand Paul (R-KY) and Rep. Austin Scott (R-GA) are promoting a Fourth Amendment Restoration Act that would codify a requirement for law enforcement to obtain a warrant before employing “roving electronic surveillance” of an individual

Sources: GCN, “Domestic drones can be hijacked, turned into weapons, researchers show,” June 29, 2012; Politico.com, “Bob McDonnell backs domestic drones,” May 30, 2012; Wired.com Danger Room blog, “Drone hijacking? That’s just the start of GPS troubles,” July 6, 2012; Courier Post (NJ), “Talk of drones patrolling US skies spawns anxiety,” June 19, 2012; Rolling Stone, “The Rise of the Killer Drones: How America Goes to War in Secret,” April 16, 2012; CNN.com, “Sen. Paul says no to domestic drones,” June 12, 2012; Thomas.loc.gov, S.1070 CRS Summary. 23 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Future UAS Missions . Resupply . The Navy is investigating how UAS could deliver cargo to ships at sea,19 and the Marine Corps has awarded contracts to two firms to demonstrate how UAS might resupply units in Afghanistan . Combat Search and Rescue . Early research is underway to develop the capability for an unmanned system to locate and possibly evacuate personnel behind enemy lines . Refueling . Large UAS could eventually take on the aerial refueling task now performed by KC- 10 and KC-135 tanker aircraft . In July, 2010, the Defense Advanced Research Projects Agency awarded a contract to demonstrate refueling by Global Hawk UAVs, and a March, 2011 test demonstrated the Global Hawk’s ability to receive refueling autonomously . The second X-47B will be equipped to demonstrate refueling . Air Combat . UCAVs are being designed to carry air-to-air weapons and other systems that may allow them to undertake air superiority missions . Newer UAS such as the X-47B Avenger and Phantom Ray are not being designed with acknowledged air-to-air capability Source: CRS Report R42136, “Unmanned Aerial Systems,” January 3, 2012. 24 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Future UAS Missions (cont.) . Space . The Air Force has completed two “successful” experiments with its unmanned Boeing X- 37B space plane . The first X-37B experiment was in orbit for 255 days; the second for 469 days . The X-37B resembles a smaller version of NASA’s space shuttle, and includes a payload bay about the size of a pickup truck bed . Details on the X-37B’s mission and payload are classified, though the Air Force maintains the X- 37B is “a test vehicle to prove the materials and capabilities, to put experiments in space and bring them back and check out the technologies” . Space watchers speculate the X-37B could be used to deploy small satellites, telescopes, and sensors for space situational awareness . Boeing has also announced plans for its unmanned SolarEagle platform . SolarEagle, being built under an $89 million contract with DARPA, has a 400ft. wingspan, the ability to carry a payload of 1,000 lbs., as well as the ability to stay aloft in the stratosphere for up to five years . SolarEagle possesses many of the same capabilities as orbital satellites, but is a more flexible, lower-cost option targeted for intelligence services, federal law enforcement, and telecommunications providers . A SolarEagle demonstrator is scheduled to make a 30-90 day flight in 2013 during the height of winter. The test is intended to test the limits of SolarEagle’s power system by making it operate during the shortest days of the year

Sources: CRS Report R42136, “Unmanned Aerial Systems,” January 3, 2012; Space.com, “Air Force’s Secret X-37B Space Plane Lands in California,” June 16, 2012; Wired.com Danger Room blog, “A Year Later, Mysterious Space Plane Is Still in Orbit,” March 7, 2012; DoDBuzz.com, “What Could X- 37B Do?” December 3, 2010; Space.com, “Solar-Powered UAV With 400-Foot Wingspan Can Stay Aloft 5 Years,” September 22, 2010. 25 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Summary and Recommendations

. Despite the current round of budget cutting, unmanned systems are here to stay . Unmanned systems require less manpower, and are cheaper to operate and replace compared to manned aircraft systems or expensive orbital satellites . Cybersecurity is the most important ancillary component for UAS . As the Pentagon moves to develop universal drone controls across all platforms, potential solutions must prove resistant to spoofing and other forms of cyber-attack . Even one successful, malicious cyber-attack of a domestic UAS could cause public and Congressional backlash . State and local governments will begin to utilize UAS in law enforcement operations . State and local governments are expected to be the next big growth market for the UAS industry . There will be intense opposition to domestic drones on grounds of privacy and public safety . Domestic drones will also face severe scrutiny of flight safety records and susceptibility of systems to cyber-attack . The overriding issue with domestic drones is that we still do not know the limits of what they can be used for – and it will take some combination of legislation and the courts to settle

26 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Sources and Links . ABC News.com, “Is U.S. Drone Shown on Iran TV Real?” December 8, 2011. . CNN.com, “Sen. Paul says no to domestic drones,” June 12, 2012. . Congressional Research Service Report R41284, “Intelligence, Surveillance, and Reconnaissance (ISR) Acquisition: Issues for Congress,” December 27, 2011. . Congressional Research Service Report R42136, “Unmanned Aerial Systems,” January 3, 2012. . Courier Post (NJ), “Talk of drones patrolling US skies spawns anxiety,” June 19, 2012. . Dept. of Defense, FY2013 Budget Request, “Program Acquisition Costs by Weapon System.” February 2012. . Dept. of Defense, “Report to Congress on Future Unmanned Aircraft Systems Training, Operations, and Sustainability,” April 2012. . Dept. of Defense, Undersecretary of Defense for Acquisition, Technology and Logistics, “Unmanned Systems Integrated Roadmap: FY2011 – 2036.” . DoDBuzz.com, “Army: Gray Eagle ain’t perfect, but we’ll take it,” June 28, 2012. . DoDBuzz.com, “Pakistan blockade stalemate costs U.S. $2.1B,” July 2, 2012. . DoDBuzz.com, “What Could X-37B Do?” December 3, 2010. . Federal Procurement Database System – Next Generation (FPDS-NG).

27 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Sources and Links (cont.) . GCN.com, “Domestic drones can be hijacked, turned into weapons, researchers show,” June 29, 2012; . New York Times, “Secret ‘Kill List’ Proves a Test of Obama’s Principles and Will,” May 29, 2012. . Politico.com, “Bob McDonnell backs domestic drones,” May 30, 2012. . Publicintelligence.net, “DoD Current and Future U.S. Drone Activities Map,” June 12, 2012. . Rolling Stone, “The Rise of the Killer Drones: How America Goes to War in Secret,” April 16, 2012. . Space.com, “Air Force’s Secret X-37B Space Plane Lands in California,” June 16, 2012. . Space.com, “Solar-Powered UAV With 400-Foot Wingspan Can Stay Aloft 5 Years,” September 22, 2010. . Thomas.loc.gov, S.1070 CRS Summary. . Wired.com Danger Room blog, “A Year Later, Mysterious Space Plane Is Still in Orbit,” March 7, 2012. . Wired.com Danger Room blog, “’Gray Eagle’ Drone Fails All The Time, But Army Still Wants More,” June 15, 2012. . Wired.com Danger Room blog, “Stan McChrystal, Drone Skeptic,” July 1, 2012. . Wired.com Danger Room blog, “War With Friends: Pentagon Eyes a Drone App Store,” June 18, 2012. . Wired.com Danger Room blog, “Drone Hijacking? That’s Just the Start of GPS Troubles,” July 6, 2012

28 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved For additional information

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29 ©2012 Deltek, Inc. All Rights Reserved. 7/18/2012 Appendix A: DoD UAS Acquisition Costs MQ-1 Predator/MQ-9 Reaper

Source: Dept. of Defense, FY2013 Budget Request, “Program Acquisition Costs by Weapon System.”

31 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved MQ-1 Predator/MQ-9 Reaper

Source: Dept. of Defense, FY2013 Budget Request, “Program Acquisition Costs by Weapon System.”

32 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved RQ-4 Global Hawk

Source: Dept. of Defense, FY2013 Budget Request, “Program Acquisition Costs by Weapon System.”

33 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved RQ-4 Global Hawk

Source: Dept. of Defense, FY2013 Budget Request, “Program Acquisition Costs by Weapon System.”

34 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved RQ-7 Shadow/RQ-11 Raven

Source: Dept. of Defense, FY2013 Budget Request, “Program Acquisition Costs by Weapon System.”

35 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved RQ-7 Shadow/RQ-11 Raven

Source: Dept. of Defense, FY2013 Budget Request, “Program Acquisition Costs by Weapon System.”

36 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved Appendix B: DoD Current and Future Domestic UAS Locations DoD Domestic UAS Locations

Location Service Branch Types of UAS Activities Status , WA Army, USSOCOM Shadow, Wasp, Raven Current Lewis-McChord, WA USSOCOM Wasp, Raven Future Portland, OR USSOCOM Wasp, Raven Future Arlington, OR USSOCOM Scan Eagle Current Limestone Hills Training Area, MT USSOCOM Wasp, Raven Current Grand Forks AFB, ND Air Force Global Hawk, Predator Future Camp Ripley, MN Army Shadow Current Beale AFB, CA Air Force Global Hawk Current Moffett Air Field, CA Army RMAX Future Fort Ord, CA Army RMAX Future Camp Roberts, CA USSOCOM Wasp, Raven Future Simi Valley, CA Army Raven, Warrior, Puma-AE Current Point Mugu, CA Navy Global Hawk, BAMS Future Camp Pendleton, CA USSOCOM Wasp, Raven Future El Mirage, CA Army Wasp Current Palmdale, CA Air Force Global Hawk Current 29 Palms, CA Marine Corps Shadow, Raven Current Victorville, CA Army, USSOCOM Raven, A160 Hummingbird Current Fort Irwin, CA Army Unknown Current Creech AFB, NV Air Force Predator, Reaper Current Dugway, UT Army Hunter, Shadow Current Camp Williams, UT USSOCOM Wasp, Raven Future

Sources: Publicintelligence.net, “DoD Current and Future U.S. Drone Activities Map,” June 12, 2012; Dept. of Defense, “Report to Congress on Future Unmanned Aircraft Systems Training, Operations, and Sustainability,” April 2012. 38 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved DoD Domestic UAS Locations Location Service Branch Types of UAS Activities Status Fort Huachuca, AZ Army Warrior Current Cochise, AZ Army Hunter Current Holloman AFB, NM Army, Air Force Predator, Reaper Current Cannon AFB, NM Air Force Predator, Reaper Current Santa Fe, NM Army Raven Current Laguna, NM Army gMAV Current Fort Carson, CO Army, USSOCOM Shadow, Wasp, Raven Future Air Force Academy, CO Air Force Viking 300, Scan Eagle Current Piñon Canon Maneuver Site, CO Army Raven Current Fort Riley, KS Army Shadow Current Fort Worth, TX Army Raven Current Hondo, TX Army, Navy Unknown Current Longhorn, TX Army Unknown Current , TX Army Hunter Current Robert Gray Army Airfield, Ft. Hood, TX Army Hunter Current Camp Bullis, TX USSOCOM Wasp, Raven Current Fort Polk, LA Army Raven Current Woodworth, LA Army Unknown Current Stennis Space Center, MS USSOCOM Wasp, Raven, Puma-AE Current Fort Campbell, KY Army, USSOCOM Shadow, Wasp, Raven Current Camp Shelby, MS Army Shadow Current Redstone Arsenal, AL Army Shadow Current

Sources: Publicintelligence.net, “DoD Current and Future U.S. Drone Activities Map,” June 12, 2012; Dept. of Defense, “Report to Congress on Future Unmanned Aircraft Systems Training, Operations, and Sustainability,” April 2012. 39 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved DoD Domestic UAS Locations Location Service Branch Types of UAS Activities Status Fort Benning, GA Army Shadow Current Camp Atterbury, IN USSOCOM Tiger Moth Current Louisville, KY USSOCOM Wasp, Raven Future Fort Knox, KY Army Shadow Current Warrior, Raven, Puma-AE, Patriot, KY USSOCOM Future Shadow Kenova, WV USSOCOM Wasp, Raven Future Robins AFB, GA Air Force Predator Future Wright Army Airfield, Ft. Stewart, GA Army Hunter Current Evans, GA Army Shadow Current Camp Blanding, FL USSOCOM Wasp, Raven Future Choctaw, FL USSOCOM Wasp, Rave, Puma-AE, Shadow Current Hurlburt Field, FL Air Force Wasp, Raven Future Eglin AFB, FL USSOCOM Wasp, Raven Future Key West, FL USSOCOM Wasp, Raven Current Homestead, FL USSOCOM Wasp, Raven Current Okeechobee, FL Army Raven Current Fort AP Hill, VA Army RMAX Current Blackstone Army Airfield, VA Army Shadow Current Fort Indiantown Gap, PA Army Shadow Current Fort Bragg, NC Army Raven Current Marine Corps Air Station Cherry Point, NC USSOCOM, Marine Corps Shadow, Warrior, Raven Current Fort Eustis, VA Army Vigilante Current Sources: Publicintelligence.net, “DoD Current and Future U.S. Drone Activities Map,” June 12, 2012; Dept. of Defense, “Report to Congress on Future Unmanned Aircraft Systems Training, Operations, and Sustainability,” April 2012. 40 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved DoD Domestic UAS Locations

Location Service Branch Types of UAS Activities Status NAS Patuxent River, MD Navy Global Hawk, BAMS Current JB McGuire-Dix-Lakehurst, NJ Army Spyder Current Fort Drum, NY Army, Air Force, USSOCOM Predator, Shadow Future Syracuse, NY Air Force Reaper Future Griffiss AFB Oneida County, NY USSOCOM Rascal Future Mount , NH USSOCOM Wasp, Raven Current Ladd Army Airfield, AK Army Shadow Current , AK Army Shadow Current , AK Army Shadow, Raven Current Bryant Army Heliport, Ft. Richardson, AK Army Shadow Current , AK Army Shadow Current Marine Corps Air Station, Kaneohe Bay, HI Navy Raven Current Wheeler Army Airfield, HI Army Shadow Current Ellington AFB, TX Air Force Predator, Global Hawk Future Edwards AFB, CA Air Force Unknown Current Davis-Monthan AFB, AZ Air Force Predator, Reaper Current March AFB, CA Air Force Predator Current Southern CA Logistics Air Force Predator Current Nellis AFB, NV Air Force Predator Current Fargo, ND Air Force Predator Current Ellsworth AFB, SD Air Force Predator Future

Sources: Publicintelligence.net, “DoD Current and Future U.S. Drone Activities Map,” June 12, 2012; Dept. of Defense, “Report to Congress on Future Unmanned Aircraft Systems Training, Operations, and Sustainability,” April 2012. 41 7/18/2012 ©2012 Deltek, Inc. All Rights Reserved