DOD recognizes the need to get better weapon system outcomes, and its  newest acquisition policy emphasizes the use of evolutionary, knowledge- based acquisition concepts proven to produce more effective and efficient  outcomes in developing new products. Our  body of work focuses on how DOD can better leverage its investments by  shortening the time it takes to field new capabilities at a more predictable  cost and schedule. However, policy changes alone will not guarantee  success. This requires sustained leadership and commitment and  attention to the capture and use of key product knowledge at critical  decision points to avoid the problems of the past. The Case for an Evolutionary Product Development Environment

A key enabler to the success of commercial firms is using an approach that  evolves a product to its ultimate capabilities on the basis of mature  technologies and available resources. Therefore, product features and capabilities not achievable in the initial  development are planned for subsequent development efforts in future  generations of the product, but only when technologies are proven to be  mature and other resources are available. Collectively, these practices ensure that a high level of knowledge exists  about critical facets of the product at key junctures during its  development. First, a match must be made between the customer’s needs and the  available resources—technology, engineering knowledge, time, and  funding—before a program is launched. Second, a product’s design must  demonstrate its ability to meet performance requirements and be stable  about midway through development. Third, the developer must show that  the product can be manufactured within cost, schedule, and quality targets  and is demonstrated to be reliable before production begins. DOD programs often do not employ these practices. These led to acquisition  outcomes that included significant cost increases and schedule delays,  poor product quality and reliability, and delays in getting new capability to  the war fighter. F/A-22 Did Not Employ Evolutionary or Knowledge-Based Process

The F/A-22 provides an excellent example of what can happen when a  major acquisition program is not guided by the principles of evolutionary,  knowledge-based acquisition. Instead, program managers  proceeded through the F/A-22’s development without the requisite  knowledge necessary for reducing program risk and achieving more  successful program outcomes. It Is Too Late for the F/A- 22 Program to Gain Full Benefit of a Knowledge- Based Process

The F/A-22 did not take advantage of evolutionary, knowledge-based  concepts up front and now, the best it can hope for is to limit cost  increases and performance problems by not significantly increasing its  production until development is complete—signified by developmental  and operational testing and reliability demonstrations. Ultimately, the success of the new acquisition policy will be seen in  individual program and resource decisions. As a result, the estimated cost of the production program currently  exceeds the congressional cost limit. Best Practices: DOD Training Can Do More to Help Weapon System  Programs Implement Best Practices.
Why GAO Did This Study

Over the next 5 years, DOD's overall investments are expected to average $150 billion a year to modernize and transition our forces. In addition, DOD must modernize its forces amid competing demands for federal funds, such as health care and homeland security. Therefore, it is critical that DOD manage its acquisitions in the most cost efficient and effective manner possible. DOD's newest acquisition policy emphasizes the use of evolutionary, knowledge-based concepts that have proven to produce more effective and efficient weapon systems outcomes. However, most DOD programs currently do not employ these practices and, as a result, experience cost increases, schedule delays, and poor product quality and reliability. This testimony compares the best practices for developing new products with the experiences of the F/A-22 program.

What GAO Found

GAO's reviews of commercial best practices have identified key enablers to the success of product development programs and focused on how DOD can better leverage its investments by shortening the time it takes to field new capabilities at a more predictable cost and schedule. First, commercial firms use an approach that evolves a product to its ultimate capabilities on the basis of mature technologies and available resources. This approach allows only the product features and capabilities achievable with available resources in the initial development. Further product enhancements are planned for subsequent development efforts when technologies are proven to be mature and other resources are available. Second, commercial firms ensure that a high level of knowledge exists at key junctures during a product's development. The knowledge-based process includes three points: (1) Before a program is launched, successful programs match customer needs and available resources--technology, engineering knowledge, time, and funding; (2) About midway through development, the ability of the product's design is demonstrated to be stable and meet performance requirements; and (3) Before production begins, programs must show that a product can be manufactured within cost, schedule, and quality targets. In contrast, the F/A-22 program illustrates what can happen when a major acquisition program is not guided by the principles of evolutionary, knowledge-based acquisition. When the program was started, several key technologies were not mature. Program managers proceeded through development without the requisite knowledge to effectively manage program risk and, at the start of production, key manufacturing processes were not under control. The F/A-22 program has undergone significant cost increases. Instead of fielding early capabilities to the war fighter, the development cycle has extended to 19 years, so far, and original quantities have been significantly reduced, raising concerns about the capability the program will eventually deliver. DOD recognizes the need to get better weapon system outcomes, and its newest acquisition policy emphasizes the use of evolutionary, knowledge-based acquisition concepts proven to produce better outcomes in developing new products. However, policy changes alone are not enough. Leadership commitment and attention to putting the policy into practice for individual programs is needed to avoid the problems of the past. DOD will have many opportunities to do so over the next several years with its force modernization investments.