I. Program Overview. Organization Name/Program Name: Program Leader Name/ Position/Contact information E-mail, Phone.

I. Program Overview Organization Name/Program Name: Program Leader Name/ Position/Contact information E-mail, Phone Program Category Program Background: What is this program all about? (No more than one page). Describe: The overarching need for this program History of the program The product that is created by this program Scope of work original & updated Expected deliverables Current status of the program Northrop Grumman Corporation, Technical Services Division, Unmanned Systems Sustainment Center (USSC) / Hunter Unmanned Aircraft System (UAS) Robert J. Sova / Program Manager 4067 Enterprise Way Sierra Vista, Arizona 85635 robert.sova@ngc.com (520) 457-8848 System Level Sustainment The need for Hunter can best be described by the words of our customer, the warfighter. On February 8 th, COL Baxter, PM-UAS, presented Northrop Grumman s Hunter team with the Cribbins award at the AAAA Joseph P. Cribbins Aviation Product Symposium. This award is given to an industry individual or company (hardware or services) that has been the most instrumental in assisting [the PM- UAS] organization during the past year. In making the selection, COL Baxter cited the company s unwillingness to accept defeat and an overall 99.9 percent Hunter readiness rate since 1998 stating that, Their attention to detail, willingness to go above and beyond the call of duty, never wavering in their support to the warfighter by providing multi-sensor intelligence, surveillance and reconnaissance, and signals intelligence capabilities have led to the success of numerous operations while simultaneously protecting the lives of many soldiers. Hunter (RQ-5A) began its long and remarkable record as a program known for its superior reliability and quality performance by winning the Short Range Competition in 1992. The Army took delivery of a Low Rate Initial Production of seven Systems (62 Aircraft), in 1996. Hunter deployed to Kosovo from 1999 to 2002 and proved itself as an invaluable and highly reliable intelligence asset to commanders at all levels. While in Kosovo Hunter flew more hours than any other reconnaissance platform. Hunter was deployed to Iraq from the onset of operations, flying early collection missions out of Kuwait in 2002. It was a critical enabler during the first push into Iraq in March, 2003 deploying Northrop Grumman embedded personnel alongside our warfighters. Hunter remained operational in Iraq until U.S. combat forces were withdrawn in late 2011. It has also been deployed to Afghanistan since 2008 and currently conducts continuous 24/7 operations out of numerous locations. Since development, Hunter has flown nearly 120,000 hours with more than 80% of those hours flown in support of combat operations. The Army indicates in its UAS strategic roadmap that the Hunter, in its current configuration, will continue service until 2022. 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 1

I. VALUE CREATION = 20 POINTS Value: What is the value, competitive positioning, advantage, and return created by this program to your: Customers National interests, war fighter Company Strength, bottom line, and shareholders Scientific/technical value (particularly for R&D programs) Excellence and Uniqueness: What makes this program unique? Why should this program be awarded the Program Excellence Award? Hunter UAS is a program of Army firsts; first unmanned system to enter into combat, carry a weapon, communicate with soldiers on the ground, integrate a heavy fuel engine (HFE), incorporate the tactical common data link (TCDL), and to perform operations as a signals intelligence (SIGINT) program of record. The Hunter UAS program has continually adapted and improved by providing pioneering changes to the fleet in an effort to ensure the warfighter can leverage the latest and greatest capabilities available to complete their mission. Many of the engineering efforts and payloads that were initiated on Hunter are now commonly used on other Army UAS platforms. Northrop Grumman continues to support the Army s plan to keep the Hunter mission relevant. Hunter continues to be the leading edge of technology integration and is one of the most versatile UAS platforms in operation today. Hunter is also the most payload-friendly UAS flying today. More than 40 payloads of various sizes, weights, power consumption, and capabilities have been successfully integrated, ground tested, and flight tested on the Hunter. A large number of these payloads have now been integrated on other platforms. The program s ability to achieve these firsts and sustain a high level of performance rests in the team of customer-focused professionals that provide Hunter UAS lifecycle support: flight operations, training, engineering support, supply chain, depot maintenance and integrated logistics support. This team has produced a legacy of excellence recognized by our Army customer on multiple occasions. In the Hunter team s Cribbins citation, the team was recognized for having an availability rate at or near 99% for the past five years, while reducing the cost per flight hour by 33% over the past three years. III. ORGANIZATIONAL PROCESSES/BEST PRACTICES: (HOW DO YOU DO THINGS) = 30 POINTS Strategic: Opportunity Management - Describe how your program has identified its operational and business opportunity, and manages this opportunity throughout the program s life cycle. Northrop Grumman and the Army have used the Hunter contracts quick reaction capability (QRC) to develop and field new payload and communications systems. In addition, we have anticipated obsolescence, upgraded electronics, and converted to a HFE. The Hunter customer has taken a unique teaming approach with Northrop Grumman. This teaming approach not only has Northrop Grumman as the contractor providing support for the Hunter system, but also as an operator of the Hunter system. This arrangement puts Northrop Grumman in the best position of being able to immediately identify operational improvement opportunities. Frequent program management reviews, internally and with the customer, and weekly management integrated product team (IPT) 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 2

Strategic: Strategic Supply Chain Integration and Cost Effectiveness Management: - Describe how your program is integrating its supply chain to assure visibility and adapting long-term cost effectiveness up and down the supply chain. Strategic: Operational Integration and Systems Engineering Describe the challenges faced by your program in terms of integrating the system into its operational environment and its impact on systems engineering planning and management. meetings create the environment where opportunities such as increased endurance, interoperability and improved engine performance are identified and tracked to execution. By filling these needs we continue to make Hunter relevant and viable farther into the future Hunter Global Supply Chain (GSC) manages more than 35,000 different types of parts and 150 various vendors and subcontractors. GSC uses forecasting tools to review demand history and past material performance to determine which parts will be required to support the Hunter system operational tempo, and lead times required. With this information the GSC works closely with key suppliers to determine how Hunter s material demands can best be met relative to cost and availability. GSC conducts weekly status meetings with vendors and shares metrics performance data. The Hunter team continually looks for opportunities to lower long term cost through supplier innovations. For example, a replacement engine was identified, with better performance which significantly decreased costs. Integrating, testing and deploying a complex array of subsystems is a challenging opportunity. Due to the mission profiles and Hunter capabilities, the UAS is in high demand by the commanders in the field. Therefore, the Hunter team is most often faced with very demanding systems engineering, integration and test, and deployment cycle constraints. The schedule is always very tight because of the theater demands to complete their ever pressing missions. Limited assets prevent a simple cycling of platforms while a system is being modified or upgraded back at the depot. Hence, the systems integration effort must be accomplished with minimal impact to the deployed units. The program supports several Government Owned, Contractor Operated (GO/CO) systems throughout several different theaters of operation. The greatest challenge when dealing with impact on systems engineering planning and management is the ability to respond to field failures when support is limited in extreme, harsh environments. History has proven that the closed loop system is the fastest and most efficient way to effectively return the system to mission capable status without significant impact to planning or management. Further complicating the systems integration effort is the evershrinking real estate available on the air vehicle and ground equipment as well as the weight allowance. As the Hunter system evolves with increased capability and mission requirements, the available volume and weight budget for additional equipment shrinks accordingly. Consequently, the planning effort must be thorough and detailed from the start. Detailed examination of the requirements must be measured against the available assets, weight and space. This is 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 3

Operational: Planning, Monitoring, and Controlling - Describe your planning and resource allocation processes. How do you monitor and review your program s progress and make corrections to keep the program on track? Operational: Supply Chain and Logistics Management -- What processes, tools and relationship-building methods have you used to develop, refine and improve supply chain and stakeholder integration? Please indicate also methods used to analyze/fact-find regarding supplier proposals. This is one of the most imperative needs of our industry please provide specific details and data that assisted you in gauging the effectiveness. especially critical on the Hunter air vehicle where weight and balance and aerodynamic characteristics are especially critical. Engine performance, mission requirements and endurance are key elements that must be taken into account at the very beginning. Preplanning is a critical phase of the overall systems integration strategy that must involve all organizations including flight operations, pilots, depot personnel, quality assurance (QA), the PM UAS customer and the government representatives. Our core process approach includes: sustained interaction among the PM, systems engineering, IPTs, product users, customers, and vendors. Significantly, it is a joint effort requiring close coordination, outstanding expertise, and a high degree of dedication by all involved. It is through these closely knit IPTs, working groups and peer associations coupled with the detailed planning and execution that the challenges of a systems integration effort are met. Detailed planning is performed at the control account level. Resources are planned and time-phased in accordance with the detailed baseline schedule and each element of cost (e.g. labor, material, ODC, subcontract) is identified. The planned resources reflect sufficient budget necessary to perform the correlating activities in the detailed schedule. Once complete, the time-phased budget is set. Program cost and schedule performance is measured monthly. This measurement process involves reporting the status of control accounts consistent with the established earned value methods. As work is accomplished, value is earned and the applicable schedules and estimates at completion are reviewed, revised and updated as appropriate. Any cost, schedule and at completion variances are addressed explaining the cause of the variances, the impact to the project, and corrective actions necessary to mitigate the impact. These variances are generally addressed during monthly internal program management reviews, regularly scheduled customer meetings/reviews, and/or in customer reports as required. Northrop Grumman GSC continuously coordinates with our key suppliers, program engineers, program management, and executive management to discuss and evaluate solutions to solve and satisfy customer needs. Performance metrics allow supply chain to provide essential feedback to internal program and sector managers to ensure supplier product integrity. Supplier program reviews, conducted by an IPT of supply chain, program and quality management representatives build strong relationships and support open communication. Supply chain relies on the use of subject matter experts to focus on evaluation and analysis of supplier proposals. The technical evaluations and price/cost analyses that are provided form the basis of fact-finding to ensure that all 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 4

Operational: System Integration, Testing & Reviews - Describe the activities and processes used to succeed in your system integration, and testing. How did you conduct system design and technical reviews? Operational: Risk / Opportunity Management Describe the processes used to identify both risks and opportunity and to assure potential for both is addressed effectively Please indicate any forward-leaning processes to support. Team Leadership: Team Culture and Motivation Describe how you created your team spirit and culture, and accomplished entire team integration and individual team member motivation. proposal elements are adequately addressed, ultimately resulting in successful negotiations. Monthly cost savings reports are generated to track results and measure effectiveness. Suppliers are given a request for proposal (RFP) and a Statement of Work (SOW) that contain precise performance criteria. Once accepted, the subcontract is definitized and performance metrics are used to ensure that the supplier is performing within acceptable parameters. Once the contract is awarded, engineering creates a system integration and test plan that includes formalized baseline schedules and earned value planning packages. The overall systems integration and test engineering plan and effort includes prototype builds, fit checks, test plans, engineering testing, ground testing, flight testing, test reports, and both preliminary and final engineering change proposals. The joint configuration control board (JCCB) ensures all documentation is complete, accurate and maintained in configuration management. The JCCB is conducted bi-weekly to keep up with program demand and facilitates providing the customer with the most updated system design while maintaining cost and schedule. Identifying operational risks and opportunities is part of the Hunter Preventive/Corrective Action Board (PCAB) process that incorporates test readiness and failure review information along with unit operational data. Risk and opportunity assessments are made using a standardized risk assessment matrix to establish the level of assessed risk posed to the program. Working through the risk management council, the degree of mitigation needed to return the risk to a program acceptable level is determined and actions required along with responsible parties assigned. The status of risk mitigation is monitored through the PCAB, program management review, and engineering test process with the overall risk being managed by the Hunter program leadership. Hunter mitigated risk early on within the program by taking the time to develop a comprehensive failure modes effects analysis report which identifies those potential failures with the highest consequences. Doing this analysis up front allowed management to prioritize those most critical and ensure they were addressed immediately reducing the overall cost per flight hour. The USSC maintains a staff of highly qualified personnel with advanced degrees and certifications in a myriad of operation positions to include: pilots, maintainers, QA, engineers, admin professionals, depot technicians, managers, reliability and maintainability professionals and finance/contracts professionals. Having a diverse staff that is experienced in deployments, rapid integration and testing, and training and operational excellence enables performance excellence and customer confidence. Northrop Grumman personnel focus on customer support and 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 5

Team Leadership: Lessons Learned and Knowledge Management Describe how you collect lessons learned and best practices, and how they are shared with your team and company to improve performance. Also how are you capturing expertise and knowledge to assure availability over the life of the program? Team Leadership: Leadership Development How do you develop team s skills and build future leaders satisfaction from day one on the job. Northrop Grumman focuses on individual and team recognition for customer satisfaction. Due to Northrop Grumman s innovative leadership and excellent management of the Hunter program, a very low attrition rate of personnel is maintained, which significantly reduces costs. Hunter personnel take pride in standing shoulder-to-shoulder with our military wherever and whenever they deploy. Centralized reporting of all internal and external audit results, corrective actions, inspection findings, failure review board and mishap prevention program reports ensures all information is included in the monthly PCAB review meeting. Attended by all levels of management, this is a forum for discussion, collaboration and problem solving based on continuous observation of the program s performance. Closed-loop root cause corrective actions required by our corrective and preventive action system are presented to the board to identify the susceptibility to failures across the organization. By addressing the lessons learned as part of the corrective action process, we ensure cross functional and companywide improvement. A program initiative focused on developing advanced training curriculum using experienced members of the Hunter team has been underway at the Dugway Proving Ground training facility in Utah. Using the most experienced members of the Hunter team to develop the curriculum serves two purposes: documenting the expertise and in-depth knowledge of those veteran members of the Hunter team and balancing the curriculum with current guidance to improve the materials used in day-to-day operations. Through the Northrop Grumman goal/performance planning process, all employees work with their managers on an annual basis to prepare a written assessment of their strengths and development needs. Managers and employees then prepare an individual development plan to enhance their strengths and address development needs including training, special assignments and on the job training. This plan is reviewed and updated throughout the year and, at year s end, includes a candid assessment of the employee s performance over the last year. Northrop Grumman also follows a disciplined leadership development process in which high potential employees are identified and jointly assessed and targeted for career movement. Specific training and development opportunities are assigned to achieve these objectives. These plans are reviewed and updated on a monthly basis. This process is also used to identify internal promotion candidates when new positions become available. 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 6

Best (& Next) Practices: Identify your program s specific Best Practices that you believe are unique, and could be shared with others and become industry s Next Practices. The key to Hunter s success is a dedicated workforce with an unrelenting focus on supporting the warfighter. Program Management goes the extra mile to ensure constant communication to all levels of activity. Priorities are broken down into deliverable or reportable tasks. Daily IPT meetings serve as an information exchange among section supervisors and the customer to ensure priority tasks are accomplished while routine requirements are satisfied. Furthermore, Northrop Grumman management has a proven comprehensive training management plan. Over the course of nearly two decades, Northrop Grumman Training Management has and continues to support UAS Training Operations across the United States and around the world including ongoing theater operations in Afghanistan. Automated tracking tools are used whenever possible and the Integrated Master Schedule (IMS), earned value management system, change management and risk management tools assist in the implementation of our management approach at every step of the training phase. Our Depot also serves as the U.S. Army National inventory control point for the Hunter UAS supporting theater operations in several OCONUS locations, plus two additional deployed Army units. Northrop Grumman Hunter uses the U.S. Army s supply database coupled with the Northrop Grumman Enterprise Resource Planning system for spares management and shipping. This database allows the government visibility of system assets and spares tracking while establishing criteria for minimum stockage levels for depot level repairs. Additionally, it supplies our U.S. Military sites the spares needed to exceed the 90% fully mission capable (FMC) readiness rate. Our Hunter UAS community currently maintains a 99% readiness rate for our OCONUS sites. IV. ADAPTING TO COMPLEXITY: (HOW DO YOU DEAL WITH YOUR PROGRAM S UNIQUE COMPLEXITIES) = 20 POINTS Identify the Program s Market Uncertainty level How new is your product to your market and users, based on the definitions below. Then describe how you deal and address this specific uncertainty: - Derivative an improvement of an existing product/system. - Platform a new generation in an existing product line. - New to the Market a product or system adopted from another market - New to the World - breakthrough product, never seen before Northrop Grumman has demonstrated adapting to complexity on numerous occasions transitioning Hunter from one phase to a new and different operation one of which was a major platform upgrade from the RQ-5A to the MQ-5B configuration. There were several derivative changes. The entire avionics suite was replaced along with the transition from gas engines to HFE. It represented a major transition for which careful planning, personnel training, and overcoming logistics challenges allowed for a virtually seamless transition from one system to the other. It prepared us for several more such transitions over the past three years, all of which were executed without loss of operational availability or support to the warfighter. The most risky phase of flight for any aircraft is in the launch and recovery mode. Northrop Grumman has developed a differential GPS automatic takeoff and landing system that reduces this risk considerably. Interoperability is a recent breakthrough initiatives in which Hunter has been involved. The goals 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 7

Identify the Program s Technological Uncertainty using the definitions below. Then describe how you deal and address this uncertainty: - Low-tech: application of mature, well-established technology - Medium Technology: existing technology modified to meet new design requirements - High-Technology: recently developed new technology - Super High-Technology: non-existing technology that needs to be developed during the program. Identify the level of your System Complexity using the definitions below. Then explain how you are dealing with this level of complexity: - An Assembly performing a single function. - A Sub-system fitting within a larger system. - A System a collection of subsystems performing multiple functions. - An Array a System of Systems ; a widely dispersed collection of systems serving a common mission. of this PM-UAS initiative include the use of common ground control stations, data links and air vehicle operators for all the major Army UAS platforms. To make Hunter s flight control aircraft system compatible with the common 4586 formatted data link messages, we inserted an interpreter/translator called a Hunter aircraft vehicle specific module which converted messages from the 4586 to Hunter flight computer format. Overcoming this challenge successfully keeps the Hunter viable for the foreseeable future as a major player in U.S. Army UAS operations. The Hunter system incorporates technology ranging from low-tech, but proven and very reliable, power systems and HFE engines through medium-tech subsystems that consists of existing technology such as the flight computer and electronic sub assemblies to high-tech, very advanced payloads, optical cameras or sensitive SIGINT equipment. The challenge with the well established technology is the risk of obsolescence which Hunter has encountered. Obsolete equipment is often repairable by the OEM; however, it is not uncommon to require replacement technology that can be integrated into the system. Obsolescence is monitored closely to avoid surprises and impact to operational missions. Monitoring obsolescence also avoids delays in fielding a new, converted or upgraded system. At the opposite end of the spectrum, Hunter carries equipment with leading edge technology. Some of the most advanced payloads available provide the mission commander with an incredible array of information. The Hunter UAS is a composite of systems, subsystems, and assemblies into a larger, deceptively complex platform. This array includes advanced communications systems, a precise inertial navigation system, and various payload systems ranging from state-of-the-art cameras to modern suites of advanced SIGINT equipment. The component systems and configurations are designed to change with the evolving needs of the customer. 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 8

Identify the Pace and Urgency of your team s effort using the definitions below. Then describe how you deal with the program s pace requirements: - Regular timing no specific time pressures. Fast/Competitive time to market is important for competitiveness. - Time Critical there is an absolute and critical-tosuccess deadline. - Blitz there is a crisis element driving the need for immediate response Other Complexities & Uncertainties - Describe other complexities and unknown factors faced by this program and how you addressed them. Northrop Grumman is committed to exceeding U.S Army requirements for system readiness. Our flexibility enables us to provide unparalleled support for our warfighter and overall UAS needs for the U.S. Army. Everything we do is in support of our fast moving warfighters requirements. Hunter UAS has demonstrated the unique capability to rapidly field time-critical upgraded payloads and capabilities to our warfighters in theater and with very little development time. This added value has not only ensured success on the battlefield but has provided the U.S. Army with a cost-effective and real-time solution to intelligence, surveillance and reconnaissance needs in the fielded environment. Hunter has tested developed and fielded more than 40 payloads over the course of its impressive support to the Army s UAS mission. The Army has recognized the Hunter team as a leader in quick reaction capability due to Northrop Grumman deploying systems to the warfighter within days to save the lives of soldiers and provide them the best tools possible to do their job with minimum risk. The Hunter team currently supports multiple platform configurations with different radio frequencies capabilities and data link communications and controls. Hunter has multiple payloads designed to provide the warfighter the necessary tools for mission requirements and training. Our platforms offer several different payloads and capabilities that are currently being used by the U.S. Army and other supporting agencies. Due to the extreme variances in each of the systems, Hunter has established an asset tracking database along with an internal tracking system which allows our customer the ability to track Hunter assets whenever desired. Hunter has a top-notch matrix database used for ensuring each aircraft has all the latest upgrades and ensures proper configuration prior to the warfighter receiving the asset. V. METRICS (HOW DO YOU MEASURE PROGRAM S PERFORMANCE) = 30 POINTS Customer - How do you measure the impact of your program on your customer and your customer s satisfaction? Include a description of your metrics, as well as numerical evidence. Hunter s unique partnership with our government customer affords them around the clock and face to face feedback on how well their needs are being met. Our customer is afforded the opportunity to quantify their program satisfaction in 10 key areas covering performance, management, responsiveness and value. Customer reviews are currently scored on a quarterly basis using the contractor performance assessment reporting system. The Hunter program has consistently scored above 98% in all areas. Daily status reports from each unit provide for rapid failure analysis allowing us to quickly identify trends and develop proactive solutions with our customer using the same data with which the customer manages the program. 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 9

Performance - How do you measure your program s performance in traditional terms such as schedule, budget, requirements, and business results? Preparing the Future - How do you measure and assess the long-term contribution of your program to the corporation/organization? Team - How do you measure and assess the impact of your program on your team development and employee satisfaction? Unique Metrics - Describe any unique metrics you are using to measure your program s progress and how do you focus it for outstanding success. A budget baseline is established within 45 days of contract award. Based on the SOW, budgets are spread and forecasted according to the basis of estimates which are prepared for the proposal. A cost performance report is prepared on a monthly basis to track the progress of actuals and earned value against the budget and is delivered to the customer. Earned value methods are used in the monthly reporting process to track the progress of work performed. Variance analysis reports are provided to the customer for all monthly variances that break established schedule and cost variance thresholds. The success and strategic value of the Hunter program is measured by our program cost and schedule performance to plan, our past performance as measured by our customers and our customer intimacy enabling us to be viewed as a thought leader and most trusted provider. These are leverageable in terms of achieving business growth and strategic partnering goals. Each and every employee within Northrop Grumman shares dedication to our nation s warfighters. We examine the relationship between employee satisfaction-engagement and the business outcomes in a variety of ways through customer satisfaction, productivity, turnover, profit and quality. The effectiveness of the organization s corrective action process is measured and trended as a long term indicator of how well the program manages change. The intent is to reduce costly repeat or unrecognized cross functional errors and to improve the organization s capability to implement change efficiently and effectively. By way of the PCAB as a forum for change and program improvement, all parts of the organization are involved. Root cause corrective action analysis is at the core of this process. By doing so, we identify underlying conditions that were not identified as a factor and we are driving improvements to the corrective action process. 2012 AVIATION WEEK PROGRAM EXCELLENCE INITIATIVE 10