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Exhibit R-2, RDT&E Budget Item Justification: PB 2016 Air Force : February 2015 3600: Research, Development, Test & Evaluation, Air Force / BA 7: Operational Systems Development COST ($ in Millions) Years FY 2017 FY 2018 FY 2019 FY 2020 To Program Element - 0.760-0.716-0.716 - - - - - 1.476 675143: Predator - 0.760-0.716-0.716 - - - - - 1.476 Quantity of RDT&E Articles - - - - - - - - - - A. Mission Description and Budget Item Justification The basic MQ-1 system consists of the aircraft, a control station, communications equipment, support equipment, simulator and training devices, Readiness Spares Packages (RSP), technical data/training, and personnel required to operate, maintain, and sustain the system. This funding supports development and enhancements to the Predator weapon system to include: aircraft and Ground Control Stations (GCS) and associated software, sensors, communication equipment, training systems and support elements. The system is designed to be modular and open-ended. Mission-specific equipment is employed in a 'plug-and-play' mission kit concept allowing specific aircraft and control station configurations to be tailored to fit mission needs. The MQ-1 aircraft is a single-engine, propeller-driven, remotely piloted aircraft (formerly called Unmanned Aircraft Vehicle, UAV) designed to operate over-the-horizon for long endurance sorties. The aircraft is designed to provide real-time Intelligence, Surveillance, Reconnaissance, and Acquisition (ISR TA), and attack capability to aggressively prosecute Time Sensitive s (TSTs). The aircraft is configured to carry Hellfire laser-guided missiles. The MQ-1 operates primarily at medium altitudes, integrating with joint aerospace, ground, and maritime forces as well as coalition and Allied forces, to execute combatant commander (CM) priority missions. The aircraft carries a Multi-spectral ing System (MTS) (a sensor turret that incorporates Electro-Optical (EO), Infra-Red (IR), laser designator, and IR illuminator) capable of transmitting real-time Full Motion Video (FMV) imagery throughout the operational theater. The GCS, common with the MQ-9 Reaper, functions as the aircraft cockpit and can control the aircraft either within Line-of-Sight (LOS) or Beyond LOS (BLOS) via a combination of satellite relay and terrestrial communications. The GCS is either mobile to support forward operating locations or fixed at a facility to support Remote Split Operations (RSO). The GCS has the capability to perform mission planning; provide a means for manual control; allow control of multiple aircraft and payloads; allow personnel to launch, recover, and monitor aircraft, payloads, and system communications status; secure data links to receive payload sensor data and command links; monitor threats to the aircraft; display a common operational picture; and provide support functions. Additionally, GCS allows for servicing, systems checks, maintaining, launching, and recovering aircraft under LOS control for hand-off to a mobile or fixed facility GCS. This program will address interoperability among developed systems through common standards and tools. It will continue to address reliability and maintainability, safety of flight, and warfighter needs as they arise. The FY2016 funding request was reduced by $0.198 million to account for the availability of prior execution balances. In FY2016 0305219F Predator will be completed. Air Force Page 1 of 8 R-1 Line #212

Exhibit R-2, RDT&E Budget Item Justification: PB 2016 Air Force : February 2015 3600: Research, Development, Test & Evaluation, Air Force / BA 7: Operational Systems Development This program is in Budget Activity 7, Operational System Development because this budget activity includes development efforts to upgrade systems that have been fielded or have received approval for full rate production and anticipate production funding in the current or subsequent fiscal year. B. Program Change Summary ($ in Millions) Previous President's Budget 0.760 1.378 0.919-0.919 Current President's Budget 0.760-0.716-0.716 Adjustments - -1.378-0.203 - -0.203 Congressional General Reductions - - Congressional Directed Reductions - -1.378 Congressional Rescissions - - Congressional Adds - - Congressional Directed Transfers - - Reprogrammings - - SBIR/STTR Transfer - - Other Adjustments - - -0.203 - -0.203 Change Summary Explanation Reduction of $1.378 million in FY15 due to FY15 Appropriation Act with comment, "Improving Funds Management: Air Force Divesting MQ-1 Fleet." The FY2016 funding request was reduced by $0.198 million to account for the availability of prior execution balances. C. Accomplishments/Planned Programs ($ in Millions) Title: OGC Description: Other Government s (OGC) 0.233-0.172-0.172 FY 2014 Accomplishments: Continued OGC FY 2015 Plans: Plans: Will continue OGC Plans: Title: ST&E 0.060 - - - - Air Force Page 2 of 8 R-1 Line #212

Exhibit R-2, RDT&E Budget Item Justification: PB 2016 Air Force : February 2015 3600: Research, Development, Test & Evaluation, Air Force / BA 7: Operational Systems Development C. Accomplishments/Planned Programs ($ in Millions) Description: Systems Test & Evaluation (ST&E) FY 2014 Accomplishments: Continued ST&E FY 2015 Plans: Plans: Plans: Title: PMATS Description: Predator Mission Aircrew Training System (PMATS) FY 2014 Accomplishments: d PMATS development to keep the training system current with other MQ-1 CCI development activities FY 2015 Plans: Plans: Plans: Title: CCI Description: Critical Capabilities Integration (CCI) is an overarching MQ-1 modernization activity that will integrate Hellfire R Software and Airborne Cueing and Exploitation System Hyperspectral Sensor (ACES HY). 0.197 - - - - 0.270-0.544-0.544 FY 2014 Accomplishments: Continued CCI Hellfire R activities FY 2015 Plans: Air Force Page 3 of 8 R-1 Line #212

Exhibit R-2, RDT&E Budget Item Justification: PB 2016 Air Force : February 2015 3600: Research, Development, Test & Evaluation, Air Force / BA 7: Operational Systems Development C. Accomplishments/Planned Programs ($ in Millions) Plans: Will complete CCI efforts, including integrating latetest version of Hellfire (Hellfire R) software and Airborne Cueing and Exploitation System Hyperspectral Sensor (ACES HY) Plans: Accomplishments/Planned Programs Subtotals 0.760-0.716-0.716 D. Other Program Funding Summary ($ in Millions) Line Item FY 2017 FY 2018 FY 2019 FY 2020 To APAF: BA05: Line Item 6.526 4.755 3.173-3.173 - - - - - 43.689 # PRDT01: MQ-1 MODS APAF: BA06: Line Item # 1.420 1.821 1.469-1.469 0.957 0.058 - - - 10.932 PRDT01: INITIAL SPARES Remarks E. Acquisition Strategy The MQ-1 Predator system will be acquired via sole-source acquisition strategies with General Atomics-ASI and Raytheon as the prime contractors. F. Performance Metrics Please refer to the Performance Budget Overview Book for information on how Air Force resources are applied and how those resources are contributing to Air Force performance goals and most importantly, how they contribute to our mission. Air Force Page 4 of 8 R-1 Line #212

Exhibit R-3, RDT&E Project Analysis: PB 2016 Air Force : February 2015 3600 / 7 Product Development ($ in Millions) Category Item PMATS Method & Type Various CCI SS/CPIF Year d Projects Performing Activity & Location L3 Comm : Binghamton, NY General Atomics - ASI : Poway, CA Years Project (Number/Name) 675143 / Predator To - 0.188 Feb 2014 - - - - - 0.188 30.273-0.252 Sep 2014-0.544 Jan 2016-0.544-0.796 19.446 Various Not specified. :, - - - - - - - - 288.238 Subtotal - 0.440-0.544-0.544-0.984 337.957 Support ($ in Millions) Category Item Method & Type Performing Activity & Location Years To Subtotal - - - - - - - - - Test and Evaluation ($ in Millions) Category Item Method & Type Performing Activity & Location Years To Test Support Various Various : Various, - 0.060 Aug 2014 - - - - - 0.060 9.696 Management Services ($ in Millions) Category Item Other Government s and PMA Method & Type Performing Activity & Location Subtotal - 0.060 - - - - - 0.060 9.696 Years To Various Various : Various, - 0.260 Dec 2013-0.172 Dec 2015-0.172-0.432 6.320 Subtotal - 0.260-0.172-0.172-0.432 6.320 Air Force Page 5 of 8 R-1 Line #212

Exhibit R-3, RDT&E Project Analysis: PB 2016 Air Force : February 2015 3600 / 7 Remarks Years Project (Number/Name) 675143 / Predator To Project s - 0.760-0.716-0.716-1.476 353.973 Air Force Page 6 of 8 R-1 Line #212

Exhibit R-4, RDT&E Schedule Profile: PB 2016 Air Force : February 2015 3600 / 7 Project (Number/Name) 675143 / Predator OGC, Urgent Services ST&E Predator Mission Aircrew Training System (PMATS) Critical Capabilities Integration (CCI) FY 2017 FY 2018 FY 2019 FY 2020 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 Air Force Page 7 of 8 R-1 Line #212

Exhibit R-4A, RDT&E Schedule Details: PB 2016 Air Force : February 2015 3600 / 7 Schedule Details Project (Number/Name) 675143 / Predator Start End Events Quarter Year Quarter Year OGC, Urgent Services 1 2014 4 2016 ST&E 1 2014 2 2016 Predator Mission Aircrew Training System (PMATS) 1 2014 4 2014 Critical Capabilities Integration (CCI) 1 2014 2 2016 Air Force Page 8 of 8 R-1 Line #212