DOD recently  made constructive changes to its acquisition policy that embrace best  practices. The development program began in 1992. Specifically, knowledge that a product’s design is stable early in  the program facilitates informed decisions about whether to significantly  increase investments and reduces the risk of costly design changes that can  result from unknowns after initial manufacturing begins. This knowledge  comes in the form of completed engineering drawings before transitioning  from the system integration phase to the system demonstration phase of  product development. Leading Commercial Companies Use a Product Development Process to Capture Design and Manufacturing Knowledge for Decision Making

Leading commercial companies we visited had spent significant amounts of  time and resources to develop and evolve new product development  processes that ensured design and manufacturing knowledge was captured  at the two critical decision points in product development: when the  product’s design was demonstrated to be stable—knowledge point 2—and  when the product was demonstrated to be producible at an affordable  cost—knowledge point 3. For example,  Xerox captures knowledge about the producibility of its product early in  the design phase. First,  they established and used an evolutionary approach to develop products  that made the capture of design and manufacturing knowledge a more  manageable task. DOD’s policy does not  require a decision to move from system integration to system  demonstration.
What GAO Found

This report examines how best practices offer improvements to the way the Department of Defense (DOD) develops new weapons systems, primarily the design and manufacturing aspects of the acquisition process. Knowledge about a product's design and producibility facilitates informed decisions about whether to significantly increase investments and reduces the risk of costly design changes later in the program. Leading commercial companies employ practices to capture design and manufacturing knowledge in time to make key decisions during product development. First, the companies kept the degree of the design challenge manageable before starting a new product development program by using an evolutionary approach. Second, the companies captured design and manufacturing knowledge before the two critical decision points in product development: when the design was demonstrated to be stable--the second knowledge point--and when the product was demonstrated to be producible at an affordable cost--the third knowledge point. DOD has made changes to its acquisition policy in an attempt to improve its framework for developing weapons systems, but the policy does not require the capture of design or manufacturing knowledge or sufficient criteria to enter the system demonstration and production phases. In addition, it does not require a decision review to enter the demonstration phase of product development.