Unmanned aircraft are maturing fast and, with Pentagon procurement slowing, more companies see a growing market in operating fleets of vehicles to provide intelligence, surveillance and reconnaissance services on behalf of customers. This is bringing new competitors into the market.

The U.S. Navy has qualified AAI Corp., Boeing Insitu and CSC to bid competitively to provide sea- and land-based ISR services under a five-year, $874 million contract vehicle. AAI and Insitu both have experience in operating their unmanned aircraft systems in the field, but this is a new business for information technology services giant CSC.

“We have not done ISR services before, but this is not a design and development contract, it's operations—and CSC does billions of dollars of that. It's a business model very familiar to us,” says Bob Frizzelle, vice president and general manager for ISR mission systems.

Under the Navy's new ISR contract, Insitu has won the first task order for sea-based services, with its ScanEagle unmanned aircraft system, says an industry source, while AAI will perform the initial two land-based services tasks, with its Aerosonde UAS. AAI has also won a contract potentially worth $600 million to provide ISR services, again with its Aerosonde, to U.S. Special Operations Command (Socom).

CSC has qualified to provide land-based services to the Navy with the Arcturus UAV T-50, but has yet to win an ISR task order. “The aircraft are bought and paid for. Our people are trained. We're not in the money, but we are in the hunt,” says Frizzelle. The company proposed the vertical-takeoff-and-landing Saab Skeldar for the sea-based portion of the contract, but was excluded because the unmanned helicopter did not have the required mission duration.

Both the Navy ISR services and Socom Medium-Endurance UAS II programs will replace sea- and land-based surveillance services that have been provided by Boeing and Insitu using the ScanEagle UAS. Under services contracts, ScanEagles have accumulated more than 575,000 combat flight hours since 2004 operating from ships and land for the U.S. military and allies.

“The market is going to fee for service, and is less about which vehicle you offer,” says Fred Strader, CEO of Textron Systems, of which AAI is an operating unit. “Fee for service arose during the Iraq and Afghanistan wars, and makes sense when technology is changing a lot,” he says. “For five years, the Navy will not be tied to any one company, until they buy systems down the road.”

The ISR services program will bridge the gap until the U.S. Navy and Marine Corps' own Insitu RQ-21A small tactical unmanned aircraft system (Stuas) is fielded beginning in 2013. In January, Insitu delivered two Integrator UAS to the Navy to provide an early operational capability for the Stuas program. The first system is being used for Marine Corps predeployment training at Twentynine Palms, Calif. The second was delivered to the Navy.

Frizzelle says the Navy's “level of service” requirements under the ISR services contract are similar to the quality-of-service demands built into IT outsourcing contracts. “You prebid a fixed price for a level of service and if you miss it they decrement your fee.” The Navy set requirements in areas ranging from mission duration to the resolution of full-motion video from the UAS's electro-optical and infrared sensors.

CSC decided to enter the ISR services market after acquiring CenTauri Solutions in December 2010. Providing services was seen as an extension of the small company's experience integrating ISR sensors on to the Scheibel S-100 unmanned helicopter for the Joint Improvised Explosive Device Defeat Organization's Yellow Jacket program. “Platforms are becoming a commodity,” says Frizzelle. “And once they are a commodity, companies like CSC can be competitive as service providers.”