Under the current ACTD program, DOD builds prototypes to assess the military utility of mature technologies, which are used to reduce or avoid the time and effort usually devoted to technology development. ACTD projects are not acquisition programs. Not all projects will be selected for transition into the normal acquisition process. However, the project selection process does not ensure that only mature technologies enter the ACTD program. If the demonstrated technology is deemed to have sufficient military utility, many ACTD projects will still need to enter the normal acquisition process to complete product and concept development and testing to determine, for example, whether the system is producible and can meet the user’s suitability needs. Commercial items that do not require any further development could proceed directly to production. However, other non-software related ACTDs should enter the engineering and manufacturing development phase to proceed with product and concept development and testing. In the case of the Predator ACTD, the one ACTD that has proceeded into production, DOD decided to enter the technology into production before proceeding with product and concept development and testing, thereby accepting programmatic risks that could offset the schedule and other benefits gained through the ACTD process. Procuring ACTD Prototypes Beyond Those Needed for Basic Demonstration Is Unnecessarily Risky

DOD’s practice is to procure sufficient ACTD prototypes to provide a 2-year residual capability. Procuring additional ACTD prototypes before product and concept development and testing is completed risks wasting resources on the procurement of items that may not work as expected or may not have sufficient military utility. DOD’s criteria for selecting technologies for ACTD candidates should be clarified to ensure the selection of mature technology with few, if any, exceptions. Lastly, emphasizing the need to complete concept and product development and testing before procuring more items than needed for the basic demonstration would reduce the risk of prematurely starting production. Recommendations

We recommend that the Secretary of Defense clarify the ACTD program guidance to (1) ensure the use of mature technology with few, if any, exceptions and (2) describe when transition to the development phase of the acquisition cycle is necessary and the types of development activity that may be appropriate. Moreover, the new guidance goes on to describe several types of exceptions under which immature technologies may be permitted to be used in an ACTD. As stated in our recommendation, the guidance should specify when a transition to development may be appropriate and the kinds of developmental activities that may be appropriate. 5. 6. 7. 8. 9. As DOD stated in its intent to establish the ACTD program, we believe the benefit of the ACTD process is in eliminating or reducing technology development, not in making early commitments to production or in postponing product and concept development and testing activities until after production starts. 10. 11. 12.
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed the current Advanced Concept Technology Demonstration (ACTD) program, focusing on: (1) whether the selection process includes criteria that are adequate to ensure that only mature technologies are selected for ACTD prototypes; (2) whether guidance on transitioning to the normal acquisition process ensures that a prototype appropriately completes product and concept development and testing before entering production; and (3) the Department of Defense's (DOD) current practice of procuring more ACTD prototypes than needed to assess the military utility of a mature technology.

What GAO Found

GAO noted that: (1) through the determination of military value of mature technologies and their use in the acquisition process, ACTDs have the potential to reduce the time to develop and acquire weapon systems; (2) however, several aspects of the ACTD program can be improved; (3) DOD's process for selecting ACTD candidates does not include adequate criteria for assessing the maturity of the proposed technology and has resulted in the approval of ACTD projects that included immature technology; (4) DOD has improved its guidance on the maturity of the technologies to be used in ACTD projects but the revised guidance describes several types of exceptions under which immature technologies may be used; (5) where DOD approves immature technologies as ACTD program candidates and time is spent conducting developmental activities, the goal of reduced acquisition cycle time will not be realized; (6) further, guidance on entering technologies into the normal acquisition process is not sufficient to ensure that a prototype completes product and concept development and testing before entering production; (7) the guidance does not mention the circumstances when transition to development may be appropriate or the kinds of developmental activities that may be appropriate; (8) while commercial items that do not require any further development could proceed directly to production, many ACTDs may still need to enter the engineering and manufacturing development phase to proceed with product and concept development and testing before production begins; (9) through the ACTD early user demonstration, DOD is expected to obtain more detailed knowledge about its technologies before entering into the acquisition process; (10) however, in the one case in which an ACTD has proceeded into production, DOD made that decision before completing product and concept development and testing, thereby accepting programmatic risks that could offset the schedule and other benefits gained through the ACTD process; (11) DOD's current practice of procuring prototypes beyond those needed for the basic ACTD demonstration and before completing product and concept development and testing is unnecessarily risky; and (12) this practice risks wasting resources on the procurement of items that may not work as expected or may not have sufficient military utility and risks a premature and excessive commitment to production.