Northrop's War-Planning Network Halts After Congress Balks

(Bloomberg) -- The U.S. Air Force ordered Northrop Grumman Corp. to stop work on developing an upgraded war-planning network for air operations after Congress refused to approve more money for a project that’s doubled in cost and fallen more than three years behind on a key deadline.

The stop-work order, effective Wednesday, pauses development of the cyber-hardened network “until further notice,” Air Force spokeswoman Ann Stefanek said in a statement. The action was forced after the Senate Armed Services Committee declined to approve a request to shift, or reprogram, $66 million from other accounts to cover part of an overrun.

“This is not a termination of the contract” but is necessary because current funding “is insufficient to continue the program without additional” money this year, Stefanek said.

The development phase of the AOC 10.2 network is now estimated to cost $745 million, up from the original $374 million, according to a “Critical Change Report” submitted to Congress in November and obtained then by Bloomberg News. Including procurement and support, the system -- for use in air operations centers to orchestrate combat, counterterrorism and humanitarian missions -- has a projected price tag of $2.98 billion.

“I applaud the Air Force for taking responsibility for a troubled program, and taking the initiative to reach a better solution,” Senate Armed Services Committee Chairman John McCain said in a statement Thursday. McCain said his panel looks forward “to reviewing the Air Force’s path forward on this program in conjunction with its fiscal 2018 budget submission.”

Date to Decide

The Air Force set December 2019 as the date to decide whether to fully deploy the network worldwide, according to the report. That’s 41 months beyond the original July 2016 decision date. Meeting the new deadline depends on the system passing tests that have been marred so far by defects.

Northrop Grumman spokesman Tim Paynter didn’t respond immediately to a request for comment.

“The Air Force initiated this modernization program more than eight years ago and spent nearly $400 million on it, yet the program still has not delivered any meaningful capability,” McCain said. The Arizona Republican said a new system is needed to give commanders “the tools they need to plan and execute air, space, and cyberspace operations,” but “using archaic and inflexible acquisition approaches to develop sophisticated information technology systems must end here and now.”

The Air Force will work with Pentagon acquisition officials “to determine the way forward,” Stefanek said. It remains committed to the improvements promised by the system, and continues “to explore faster ways to get capability to the field” including, where “possible and appropriate,” open-architecture solutions, according to the statement. Open architecture solutions aren’t dependent on one company such as Northrop.

Northrop has said the new system will convert “raw data into actionable information that is used to direct battlefield activities.” The current version, deployed globally since 2006, is a conglomeration of 43 software applications.

The Air Force issued notices about unsatisfactory performance to the Falls Church, Virginia-based contractor in 2014 and 2015. The program’s troubles also were cited in the Air Force’s official performance assessment report on Northrop in 2015, according to the service.