Report to Congressional Committees

United States Government Accountability Office

GAO 

May 2006 DEFENSE 

ACQUISITIONS 

The Expeditionary 

Fighting Vehicle 

Encountered 

Difficulties in Design 

Demonstration and 

Faces Future Risks 

GAO-06-349 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-06-349.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Paul Francis at 

(202) 512-4841 or francisp@gao.gov. 

Highlights of GAO-06-349, a report to 

Congressional Committees 

May 2006

DEFENSE ACQUISITIONS 

The Expeditionary Fighting Vehicle 

Encountered Difficulties in Design 

Demonstration and Faces Future Risks 

Although the EFV program had followed a knowledge-based approach early 

in development, its buying power has eroded during System Development 

and Demonstration (SDD). Since beginning this final phase of development 

in December 2000, cost has increased 45 percent as shown in figure 1. 

Figure 1: EFV Acquisition Cost Growth Since the Start of SDD 

0

7

8

9

10

11

12

13

2000 2001 2002 2003 2004 2005 2006

Dollars in billions

Source: GAO analysis of program office data.

Entered SDD

12/2000

($8.7 billion)

Critical design review

1/2001

Rebaselined

11/2002

($9.8 billion)

Rebaselined

3/2003

($10.6 billion)

Rebaselined

3/2005

($12.6 billion)

Unit costs have increased from $8.5 million to $12.3 million. The program 

schedule has grown 35 percent or 4 years, and its reliability requirement has 

been reduced from 70 hours of continuous operation to 43.5 hours. Program 

difficulties occurred in part because not enough time was allowed to 

demonstrate maturity of the EFV design during SDD. The SDD schedule of 

about 3 years proved too short to conduct all necessary planning and to 

incorporate the results of tests into design changes, resulting in schedule 

slippages. In addition, several significant technical problems surfaced, 

including problems with the hull electronic unit, the bow flap, and the 

hydraulics. Reliability also remains a challenge. 

Three areas of significant risk remain for demonstrating design and 

production maturity that have potential significant cost and schedule 

consequences. First, EFV plans are to enter low-rate initial production 

without requiring the contractor to demonstrate that the EFV’s 

manufacturing processes are under control. Second, the EFV program will 

begin low-rate initial production without the knowledge that software 

development capabilities are sufficiently mature. Third, two key 

performance parameters—reliability and interoperability—are not scheduled 

to be demonstrated until the initial test and evaluation phase in fiscal year 

2010–about 4 years after low-rate initial production has begun. 

The Marine Corps’ Expeditionary 

Fighting Vehicle (EFV) is the 

Corps’ number-one priority ground 

system acquisition program and 

accounts for 25.5 percent of the 

Corps’ total acquisition budget for 

fiscal years 2006 through 2011. It 

will replace the current amphibious 

assault craft and is intended to 

provide significant increases in 

mobility, lethality, and reliability. 

We reviewed the program under 

the Comptroller General’s authority 

to examine (1) the cost, schedule, 

and performance of the EFV 

program during system 

development and demonstration; 

(2) factors that have contributed to 

this performance; and (3) future 

risks the program faces as it 

approaches production. 

What GAO Recommends

GAO is making recommendations 

in this report to the Secretary of 

Defense that (1) the EFV program 

delay Milestone C until design 

maturity and other conditions are 

achieved, and (2) draw lessons 

from the EFV experience that can 

be applied to other acquisition 

programs. DOD agreed with our 

recommendations. 
Page i GAO-06-349 Defense Acquisitions 

Letter 1

Results in Brief 3 

Background 5 

Cost, Schedule, and Other Problems Have Reduced EFV Buying 

Power 7 

Difficulty of Demonstrating Design Maturity Was Underestimated 11 

Risks Remain for Demonstrating Design and Production Maturity 21 

Conclusions 27 

Recommendations for Executive Actions 28 

Agency Comments and Our Evaluation 28 

Appendix I Scope and Methodology 30 

Appendix II Comments from the Department of Defense 31 

Appendix III GAO Contact and Staff Acknowledgement 34 

Tables 

Table 1: Program Office Rationales for Rebaselining the EFV 

Program Since Entering SDD 9 

Table 2: Comparison of Key Events Timing 10 

Figures 

Figure 1: Current EFV under Development 5 

Figure 2: Comparison of EFV Acquisition Cost to the Marine Corps’ 

Total Acquisition Cost for Fiscal Years 2006-2011 (Thenyear dollars) 6 

Figure 3: EFV Acquisition Cost Growth Since the Start of System 

Development and Demonstration 8 

Figure 4: Best Practices for Demonstrating Design Maturity 12 

Figure 5: EFV Hull Electronics Unit 15 

Figure 6: EFV Bow Flap 16 

Figure 7: Original Reliability Growth Plan 19 

Figure 8: Current Reliability Growth Plan 20 

Contents 
Page ii GAO-06-349 Defense Acquisitions 

Abbreviations 

DOD Department of Defense 

DOT&E Director, Operational Test and Evaluation 

EFV Expeditionary Fighting Vehicle 

GDAMS General Dynamics Amphibious Systems 

GDLS General Dynamics Land Systems 

HEU Hull Electronic Unit 

SDD System Development and Demonstration 

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Page 1 GAO-06-349 Defense Acquisitions 

May 1, 2006 

The Honorable John Warner 

Chairman 

The Honorable Carl Levin 

Ranking Minority Member 

Committee on Armed Services 

United States Senate 

The Honorable Duncan L. Hunter 

Chairman 

The Honorable Ike Skelton 

Ranking Minority Member 

Committee on Armed Service 

House of Representatives 

Congress continues to express concerns over both the costs and the cost 

growth of the Department of Defense’s (DOD) major acquisition programs1

and not following its own acquisition policies. In the November 2005, 

hearing on DOD Acquisition Reform, the House Armed Services 

Committee noted that DOD’s acquisition costs and capabilities were 

increasing so much for individual systems that the nation will not be able 

to afford enough of them to support its missions; it also observed that the 

symptoms of this problem include increasing costs and programs ignoring 

internal regulations and processes. 

We have reported on widespread and persistent cost, schedule, and 

performance problems with major weapon system developments and 

DOD’s inability to resolve them. Over the last 9 years, we have 

benchmarked successful commercial and defense development programs 

and identified the key characteristics for getting better outcomes as being 

knowledge-based. Successful programs insist on having key product 

knowledge demonstrated at key points in a new development. 

We have found that a sound business case at the beginning of the system 

development and demonstration (SDD) phase is essential for the 

 1

Major defense acquisition programs are defined by DOD as those estimated as requiring an 

eventual total expenditure for research, development, test, and evaluation of more than 

$365 million or for procurement of more than $2.190 billion in fiscal year 2000 constant 

dollars. 

 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-06-349 Defense Acquisitions 

successful completion of a weapon system program.2 Demonstrated 

knowledge at key junctures is at the core of the business case. The basic 

elements of a sound business case at the start of SDD include: 

• A match must be made between the customer’s needs and mature 

technology. We refer to this as knowledge point 1. 

• The acquisition strategy for SDD should provide for demonstrating: 

• Design stability at the time of the critical design review 

(knowledge point 2). 

• The design meets performance requirements, is reliable, and can 

be produced within cost, schedule, and quality targets before 

production begins (knowledge point 3). 

• A realistic cost estimate is made to support the acquisition strategy. 

• Sufficient funds are available to cover realistic program costs. 

In sum, successful programs insist on having key product knowledge 

demonstrated at key points in a new development. 

Starting in October 2000, DOD incorporated a knowledge-based approach 

in its policy that guides major acquisitions and expanded this approach in 

its May 2003 policy.3

 The way to implement this policy is through decisions 

on individual programs. As we have reported, most individual programs do 

not follow a knowledge-based approach, preferring instead to proceed 

without adequate knowledge and to accept the consequences of lost 

buying power that attend subsequent cost increases.4

 

The Marine Corps’ Expeditionary Fighting Vehicle (EFV) is a major 

acquisition program that did show indications of following a knowledgebased approach and other best practices. For example, the program earlier 

adopted best practices in its implementation of Integrated Product Teams 

and has trained its program office staff on this acquisition improvement 

initiative. In addition, as we have reported, the earlier EFV program has 

been a leader both in the use of Integrated Product Teams and Cost as an 

 2

GAO, Tactical Aircraft: F/A-22 and JSF Acquisition Plans and Implications for Tactical 

Aircraft Modernization GAO-05-519T, (Washington, D.C.: April 6, 2005). 

3

Department of Defense Instruction 5000.2, Subject: Operation of the Defense Acquisition 

System (May 12, 2003). 

4

GAO, Defense Acquisitions: Assessments of Selected Major Weapon Programs, 

GAO-05-301(Washington, D.C.: March 2005). 
Page 3 GAO-06-349 Defense Acquisitions 

Independent Variable.5 The EFV program has since been used by the 

Defense Acquisition University as a lessons-learned case study for training 

acquisition program managers. 

We reviewed the EFV program under the Comptroller General’s authority 

to determine how it is performing against its business case. Specifically, 

this report addresses: 

• the cost, schedule, and performance of the EFV program during 

SDD; 

• factors that have contributed to this performance; and 

• future risk the program faces as it approaches production. 

In conducting our review, we used knowledge-based acquisition strategy 

principles as a framework. Appendix I contains details of our approach. 

We conducted our work from May 2005 to May 2006 in accordance with 

generally accepted government auditing standards. 

Since the EFV program began the System Development and 

Demonstration (SDD) phase, its return on investment has eroded as costs 

have increased, deliveries have been delayed, and expected reliability has 

been lowered. Since December 2000, the EFV’s total cost has grown by 

about $3.9 billion or 45 percent, to $12.6 billion. Cost per vehicle has 

increased from $8.5 million to $12.3 million. Deliveries of vehicles to the 

warfighter have been delayed, as planned production quantities have been 

reduced by about 55 percent over fiscal years 2006-2011, and the 

development schedule has grown by about 4 years, or 35 percent. 

Furthermore, a key requirement has been lowered. EFV reliability—a key 

performance parameter—has been reduced from 70 hours of continuous 

operation to 43.5 hours. 

Program difficulties occurred in part because not enough time was 

allowed to demonstrate maturity of the EFV design during SDD. Best 

practices (and current DOD acquisition policy) call for system integration 

work to be conducted before the critical design review is held. This review 

represents the commitment to building full-scale SDD prototypes that are 

representative of the production vehicle. In the case of the EFV, however, 

 5

GAO, Best Practices: DOD Training Can Do More to Help Weapon System Programs 

Implement Best Practices, GAO/NSIAD-99-206 (Washington, D.C.: March 1999). 

Results in Brief 
Page 4 GAO-06-349 Defense Acquisitions 

the SDD critical design review was held before the system integration 

work had been fully completed. While testing of early prototypes began 

1 year before SDD critical design review, it continued for 3 more years 

after the decision to begin building the SDD prototypes. The SDD schedule 

of about 3 years proved too short to conduct all necessary planning and to 

incorporate the results into design changes, resulting in schedule delays 

and cost increases. Lessons learned from testing the early prototypes 

necessitated design changes in the SDD prototypes, which delayed their 

delivery and testing. The schedule was delayed further to allow more time 

to demonstrate the reliability of the EFV using the SDD prototypes. Even 

with the delays, it is clear that the actual test hours accumulated are 

significantly less than planned. While the original plan called for 

conducting 12,000 hours of testing by September 2005, the current plan 

will not achieve this level until after 2008. Also, several significant 

problems have surfaced in testing the SDD prototypes, including problems 

with the hull electronic unit (HEU), the bow flap, and the hydraulics. 

Three areas of risk remain for demonstrating design and production 

maturity, which have potential cost and schedule consequences—risks for 

the EFV’s business case. First, while the EFV program has taken steps and 

made plans to reduce risk in the production phase, production risk 

remains in the program. Current plans are to enter low-rate initial 

production without requiring the contractor to ensure that all key EFV 

manufacturing processes are under control. Second, the EFV program will 

transition to low-rate initial production without the knowledge that 

software development capabilities are mature. Third, two key performance 

parameters—reliability and interoperability—are not scheduled to be 

demonstrated until the initial test and evaluation phase in fiscal year 2010, 

about 4 years after low-rate initial production has begun. The program 

office has developed plans to resolve performance challenges, and 

believes they will succeed. However, until the plans are actually 

implemented successfully, the EFV’s design and production maturity will 

not be demonstrated and the potential for additional cost and schedule 

increases remains while production units are being made. 

We are making recommendations in this report to the Secretary of Defense 

that (1) the EFV program delay Milestone C until design maturity and 

other conditions are achieved and (2) draw lessons from the EFV 

experience that can be applied to other acquisition programs. After a 

review of a draft of this report, DOD concurred with our recommendations 

and provided some technical comments that were incorporated, as 

appropriate. 
Page 5 GAO-06-349 Defense Acquisitions 

The EFV is the Corps’ number-one priority ground system acquisition 

program and is the successor to the Marine Corps’ existing amphibious 

assault vehicle. It is designed to transport troops from ships offshore to 

their inland destinations at higher speeds and from farther distances, and 

to be more mobile, lethal, reliable, and effective in all weather conditions. 

It will have two variants—a troop carrier for 17 combat-equipped Marines 

and a crew of 3 and a command vehicle to manage combat operations in 

the field. The Marine Corps’ total EFV program requirement is for 

1,025 vehicles. Figure 1 depicts the EFV system. 

Figure 1: Current EFV under Development 

The EFV’s total acquisition cost is currently estimated to be about 

$12.6 billion. In addition, the EFV accounts for a substantial portion of the 

Marine Corps’ total acquisition budget for fiscal years 2006 through 2011, 

as figure 2 shows. 

Background 

Source: General Dynamics Land Systems.
Page 6 GAO-06-349 Defense Acquisitions 

Figure 2: Comparison of EFV Acquisition Cost to the Marine Corps’ Total 

Acquisition Cost for Fiscal Years 2006-2011 (Then-year dollars) 

The EFV program began its program definition and risk reduction phase in 

1995, and was originally referred to as the Advanced Assault Amphibious 

Vehicle. The Marine Corps’ existing assault amphibious vehicle was 

originally fielded in 1972 and will be over 30 years old when the EFV is 

fielded. Several Marine Corps studies identified deficiencies in the existing 

vehicle, including the lack of necessary lethality to defeat projected 

emerging threats. Despite efforts to extend the service life of the existing 

vehicle, Marine Corps officials stated that serious warfighting deficiencies 

remained. The studies concluded that the existing vehicle was unable to 

perform the type of combat missions envisioned by the Marine Corps’ 

emerging combat doctrine and that a new vehicle was needed.6

In September 2003, DOD officially changed the name of the new vehicle to 

the EFV, which was in keeping with the Marine Corps’ cultural shift from 

the 20th century force defined by amphibious operations to a 21st century 

force focusing on a broadened range of employment concepts and 

possibilities across a spectrum of conflict. The new vehicle is a self-

 6

In 2003, GAO also reported that the existing amphibious assault vehicle needed attention 

due to aged equipment that needed upgrading. Military Readiness: DOD Needs to Reassess 

Program Strategy, Funding Priorities, and Risks for Selected Equipment, GAO-04-112 

(Washington, D.C.: December 2003). 

25.5%

74.5%

Source: GAO analysis of EFV program office data.

All other Marine Corps’ systems

($10.5 billion)

Marine Corps’ total acquisition costs

($14.1 billion)

EFV acquisition cost

($3.6 billion)
Page 7 GAO-06-349 Defense Acquisitions 

deploying, high water-speed, amphibious, armored, tracked vehicle, and is 

to provide essential command, control, communications, computers, and 

intelligence functions for embarked personnel and EFV units. These 

functions are to be interoperable with other Marine Corps systems as well 

as with Army, Air Force, Navy, and NATO systems. The EFV transitioned 

to SDD in December 2000. The use of a knowledge-based acquisition 

approach was evident at the onset of the EFV program. Early in the 

program at the start of program definition and risk reduction, the Marine 

Corps ensured that four of the five critical program technologies were 

mature. Although the fifth technology (the moving map navigation 

technology, which provides situational awareness) was not mature at this 

same time, it was sufficiently matured after the program transitioned to 

SDD. Furthermore, the EFV design showed evidence of being stable by the 

completion and release of design drawings. At critical design review, 

84 percent of the drawings were completed and released. The program 

now has 100 percent of the EFV drawings completed. Program officials 

expect that only about 12 percent of the design drawings are likely to be 

changed in the future as a result of planned reliability testing. 

Since entering SDD in December, 2000, the EFV program’s total cost has 

grown by about $3.9 billion, or 45 percent. 7 Production quantities have 

been reduced by about 55 percent over fiscal years 2006-2011, thereby 

reducing the capabilities provided to the warfighter during this period. 

Cost per vehicle has increased from $8.5 million to $12.3 million. However, 

total quantities remain unchanged. During the same period, the EFV’s 

development schedule has grown by about 4 years, or 35 percent. 

Furthermore, a key requirement has been lowered. EFV reliability—a key 

performance parameter—has been reduced from 70 hours of continuous 

operation to 43.5 hours. Thus, overall EFV buying power has been 

reduced, for it will now take substantially more money than was estimated 

at the start of SDD to acquire the same number of vehicles later and more 

slowly, and with a reduced operational reliability requirement. 

 7

In constant 2006 dollars, the December 2000 cost is $9.6 billion, for an increase of $3.1 

billion, or 32 percent. 

Cost, Schedule, and 

Other Problems Have 

Reduced EFV Buying 

Power
Page 8 GAO-06-349 Defense Acquisitions 

Since entering SDD in December 2000 and holding the SDD critical design 

review in January, 2001, the EFV program’s total acquisition cost has 

grown by about $3.9 billion, or 45 percent, to $12.6 billion. Figure 3 shows 

how costs have grown over time. 

Figure 3: EFV Acquisition Cost Growth Since the Start of System Development and 

Demonstration 

While total quantities have not changed, production quantities over fiscal 

years 2006-2011 were reduced by about 55 percent, from 461 vehicles to 

208. This means that the warfighter will get the capability the EFV 

provides more slowly. 

The EFV program has been rebaselined three times since SDD began, as 

shown in table 1.8

 

 8

A program’s baseline is derived from its performance and schedule needs and the 

estimates of total program cost consistent with projected funding, and reflects the 

program’s estimated total acquisition cost and schedule at the time the baseline is derived. 

Under certain circumstances, DOD will “rebaseline” a program--i.e., change its estimated 

cost and schedule so that goals more realistically reflect the program’s current status. 

Rebaselining is useful and appropriate in many situations. 

EFV Costs and Schedule 

Have Grown Significantly 

Since Entering SDD 

0

7

8

9

10

11

12

13

2000 2001 2002 2003 2004 2005 2006

Dollars in billions

Source: GAO analysis of program office data.

Entered SDD

12/2000

($8.7 billion)

Critical design review

1/2001

Rebaselined

11/2002

($9.8 billion)

Rebaselined

3/2003

($10.6 billion)

Rebaselined

3/2005

($12.6 billion)
Page 9 GAO-06-349 Defense Acquisitions 

Table 1: Program Office Rationales for Rebaselining the EFV Program Since 

Entering SDD 

Date of rebaseline Rationale for rebaselines 

Impact on program 

schedule 

November 2002 Prototypes were not delivered as 

anticipated; additional time was 

needed for reliability testing prior to 

the Milestone C decision. 

12-month increase 

March 2003 DOD’s Director, Operational Test 

and Evaluation directed more time 

be added for more robust 

operational testing prior to 

Milestone C. 

12-month increase 

March 2005 Rebaseline was implemented to 

incorporate the program changes 

as a result of DOD’s Program 

Budget Decision 753. 

24-month increase 

Source: GAO analysis of EFV program office data. 

Because the rebaselines have occurred incrementally over time, the EFV 

program has not previously been required to submit a unit cost increase 

report to Congress. Congress in 1982 enacted the unit cost reporting 

statute, now codified in 10 USC 2433, which is commonly referred to as 

Nunn-McCurdy, after the congressional leaders responsible for the 

requirement. The statute required the Secretary of Defense to certify a 

program to Congress when the unit cost growth in constant dollars 

reaches 25 percent above the most recent rebaseline cost estimate and 

report to Congress when it reaches 15 percent. The National Defense 

Authorization Act9

 for fiscal year 2006 made changes to Nunn-McCurdy. 

The primary change that affects the EFV program was the additional 

requirement to report 30 percent unit cost growth above the original 

baseline estimate approved at SDD. The EFV program recently reported an 

increase in the EFV’s program average unit cost increase of at least 

30 percent above its original baseline estimate at SDD. Although the EFV 

program acquisition unit costs have increased by about at least 30 percent 

since SDD began, no single increase between rebaselines has reached the 

15 percent reporting threshold. 

Overall, the program schedule has grown by 48 months or 35 percent from 

December 2000 at the start of SDD to the most recent rebaselining in 

 9

Public Law 109-163. 
Page 10 GAO-06-349 Defense Acquisitions 

March 2005. This schedule growth has delayed the occurrence of key 

events. For example, the EFV program was originally scheduled to provide 

the Marine Corps with its initial operational capability vehicles in 

September 2006, but is now scheduled to provide this capability in 

September 2010. Details of key event schedule changes are shown in 

table 2. 

Table 2: Comparison of Key Events Timing 

Baseline SDD key 

events (12/2000) Key events 

Current SDD key 

 events (3/2005) 

December 2000 Milestone B 

(System Development and 

Demonstration) 

December 2000 

January 2001 Critical Design Review January 2001 

October 2003a Milestone C 

(Low-rate initial Production) 

December 2006 

Start-August 2007 

End-April 2008

Initial Operational Test & 

Evaluation 

Start-May 2009 

End-January 2010 

August 2008

May 2010 

Full-Rate Production 

 Deliveries start 

August 2010 

May 2012 

September 2006 Initial Operational Capability September 2010 

Source: GAO analysis of EFV program office data. 

a In 1999, the program office accelerated Milestone C from July 2005 to October 2003. 

In 2005, the Marine Corps received approval to lower the EFV’s reliability 

requirement from 70 hours before maintenance is needed to 43.5 hours 

before maintenance is needed.10 This decision was based on a revised 

analysis of the EFV’s mission profile and the vehicle’s demonstrated 

reliability. At the start of SDD, the EFV’s operational reliability 

requirement was 70 hours of operation before maintenance is needed. 

Program officials told us this 70-hour requirement was based on the EFV’s 

mission profile at the time, which called for a “do-all” mission for one 

24.3 hour period of operation. The original reliability growth plan 

anticipated that this requirement would be met after initial operational test 

and evaluation, which was then planned for August 2007. 

 10As measured by mean time (hours) between operational mission failures. 

Reliability Requirement 

Reduced 
Page 11 GAO-06-349 Defense Acquisitions 

In 2002, the Marine Corps’ Combat Development Command performed an 

independent analysis of the original 70-hour reliability requirement and 

determined that it was likely that it would be very difficult to achieve. 

Additionally, the analysis determined that this requirement was 

excessively high when compared to similar types of vehicles. In fiscal year 

2004, DOD’s Director of Operational Test and Evaluation (DOT&E) office 

reported that overall EFV reliability remained a significant challenge 

because of the system’s comparative complexity and harsh operating 

environment. In 2004, The Marine Corps’ Combat Development Command 

reviewed the 70-hour requirement and recommended that it be reduced to 

43.5 hours. According to program officials, the primary reason for the 

reduction to 43.5 hours was to more accurately depict the Marine Corps’ 

current mission profile for the EFV, which calls for a 12.5-hour mission 

day. The Joint Requirements Oversight Council approved the reliability 

reduction to 43.5 hours in January 2005. 

The program’s development schedule did not allow enough time to 

demonstrate maturity of the EFV design during SDD. The critical design 

review was held almost immediately after SDD began. Testing of early 

prototypes continued for 3 years after the decision to begin building the 

SDD prototypes. Test schedules for demonstrating design maturity in the 

integrated, full-system SDD prototypes proved optimistic and successoriented, and were extended twice. After the schedules were extended, 

major problems were discovered in testing the prototypes. 

Conceptually, as figure 4 illustrates, SDD has two phases: a system 

integration phase to stabilize the product’s design and a system 

demonstration phase to demonstrate the product can be manufactured 

affordably and work reliably.11 

 11GAO, Best Practices: Capturing Design and Manufacturing Knowledge Early Improves 

Acquisition Outcomes, GAO-02-701 (Washington, D.C.: July 15, 2002). 

Difficulty of 

Demonstrating Design 

Maturity Was 

Underestimated 

Best Practices for 

Demonstrating Design 

Maturity 
Page 12 GAO-06-349 Defense Acquisitions 

Figure 4: Best Practices for Demonstrating Design Maturity 

The system integration phase is used to stabilize the overall system design 

by integrating components and subsystems into a product and by showing 

that the design can meet product requirements. When this knowledge is 

captured, knowledge point 2 has been achieved. Leading commercial 

companies use several criteria to determine that this point has been 

achieved, including completion of 90 percent of engineering drawings and 

prototype or variant testing to demonstrate that the design meets the 

requirements. When knowledge point 2 is reached, a decision review—or 

critical design review—is conducted to ensure that the program is ready to 

move into system demonstration. This review represents the commitment 

to building full-scale SDD prototypes that are representative of the 

production vehicle. The system demonstration phase is then used to 

demonstrate that the product will work as required and can be 

manufactured within targets. When this knowledge is captured, knowledge 

point 3 has been achieved. DOD uses this conceptualization of SDD for its 

acquisition policy and guidance.12

The EFV program met most of the criteria for SDD critical design review, 

which it held January 2001, about 1 month after entering SDD. In 

particular, it had 84 percent of drawings completed and had conducted 

early prototype testing during the last year of program definition and risk 

reduction. However, this early prototype testing had not been fully 

completed prior to critical design review. Testing of the early prototypes 

continued for 3 years into SDD, well after the program office established 

the SDD critical design decision to begin building the SDD prototypes. 

 12Department of Defense Instruction 5000.2, Subject: Operation of the Defense Acquisition 

System (May 12, 2003). 

System

integration

Critical design 

review

(Knowledge point 2)

System development 

and demonstration

(Program start)

Milestone C

(Knowledge point 3)

System

demonstration

Source: DOD and GAO.
Page 13 GAO-06-349 Defense Acquisitions 

The program did not allow enough time to demonstrate maturity of the 

EFV design during SDD. The original SDD schedule of about 3 years 

proved too short to conduct all necessary planning and to incorporate the 

results of tests into design changes. Specifically, the original schedule did 

not allow adequate time for testing, evaluating the results, fixing the 

problems, and retesting to make certain that problems are fixed before 

moving forward. Testing is the main process used to gauge the progress 

provided to the customer. Consequently, it is essential to build sufficient 

testing and evaluation time into program development to minimize or 

avoid schedule slippages and cost increases being made when an idea or 

concept is translated into an actual product.13 Evaluation is the process of 

analyzing and learning from a test. The ultimate goal of testing and 

evaluation is to make sure the product works as intended before it is 

provided to the customer. Consequently, it is essential to build sufficient 

testing and evaluation time into program development to minimize or 

avoid schedule slippages and cost increases. 

Prior to entering SDD, during both the concept evaluation and the 

program definition and risk reduction phases, the EFV program conducted 

a variety of component and subsystem tests. This testing included an 

engineering-model and prototype-testing program, as well as modeling and 

simulation test programs. Early EFV testing also included early 

operational assessment tests on the initial prototype developed during 

program definition and risk reduction. During this phase, the EFV program 

demonstrated key aspects of performance including the technological 

maturity to achieve the high water speed and land mobility needed for the 

EFV mission. In addition, a number of subsystem tests were conducted on 

key components of the EFV, including the main engine; water jets; 

propulsion drive train components; weapons; nuclear, biological and 

chemical filters; track, suspension units; and nearly all of the vehicle 

electronics. 

Nevertheless, the SDD schedule was extended twice to ensure adequate 

system-level testing time. In November 2002, the program office extended 

the test schedule by 12 months for additional testing prior to low-rate 

initial production. According to program officials, this extension was 

necessary for several reasons. Lessons learned from testing the early 

prototypes necessitated design changes in the SDD prototypes, which 

 13GAO, Best Practices: A More Constructive Test Approach Is Key to Better Weapon 

System Outcomes, GAO/NSIAD-00-199 (Washington, D.C.: July 31, 2000). 

Initial SDD Test Schedules 

Were Optimistic and 

Success-Oriented 
Page 14 GAO-06-349 Defense Acquisitions 

delayed delivery and testing of the SDD prototypes. In addition, testing 

was taking longer than anticipated, additional time was needed for 

reliability testing, and more training was required to qualify crews prior to 

certain events. For example, the results of the early EFV firepower, water 

operations, and amphibious ship testing revealed the need for more 

testing. The schedule was delayed further to allow more time to 

demonstrate the reliability of the EFV using the SDD prototypes. In March 

2003, DOT&E directed that the EFV test schedule be extended for yet 

another 12 months so that more developmental testing and more robust 

operational testing could occur before initial production. 

After the two schedule adjustments, testing of SDD prototypes revealed 

major problems in maturing the system’s design. Specifically, the program 

experienced problems with the HEU, bow flap, system hydraulics, and 

reliability. 

The HEU provides the computer processing for the EFV’s mobility, power, 

and auxiliary computer software configuration and for the command and 

control software application. Figure 5 shows the HEU. 

EFV Program Encountered 

Design Maturity Problems 

Hull Electronic Unit 
Page 15 GAO-06-349 Defense Acquisitions 

Figure 5: EFV Hull Electronics Unit 

In November 2004, during integrated system-level testing on the SDD 

prototypes, there were major problems with the HEU. For example, the 

water-mode steering froze, causing the vehicle to be non-responsive to the 

driver’s steering inputs and both the HEU and the crew’s display panel 

shut down during EFV operation. Consequently, testing ceased until the 

causes of the problems could be identified and corrections made. The 

program office conducted a root-cause analysis and traced the problems 

to both hardware and software sources. The program office made design 

changes and modifications to correct the problems, and testing resumed in 

January 2005, after about a 2-month delay. According to program officials, 

these changes and modifications were installed by May 2005, in the 

vehicles that will be used to conduct the operational assessment tests. 

Again, according to program officials, these problems have not recurred. 

However, the HEU has experienced some new problems in testing since 

then. For example, in June 2005, some status indicators on the crew’s 

Source: EFV Program Office.
Page 16 GAO-06-349 Defense Acquisitions 

display panel shut down during land operations and had to be rebooted. 

Program officials commented that corrective actions for HEU problems 

have been initiated and tested to ensure that the actions resolved the 

problems. We did not independently verify program officials’ statements 

about initiation and testing of corrective actions. 

The bow flap is a folding appendage on the front of the EFV that is 

hydraulically extended forward during EFV water operations. The bow 

flap provides additional surface area that is used to generate additional 

hydrodynamic lift as the vehicle moves through the water. Figure 6 shows 

the bow flap. 

Figure 6: EFV Bow Flap 

Prior to entering SDD, major problems occurred with an earlier version of 

the bow flap in testing using early prototypes. Root-cause analysis traced 

these problems to bow flap overloading. Consequently, the bow flap was 

redesigned but was not retested on the early prototypes before the new 

design was installed on the SDD prototypes. 

Problems with the new bow flaps occurred during subsequent SDD 

prototype testing. For example, in September and October 2004, two bow 

flaps failed—one bent and one cracked. Again, the program office 

Bow Flap 

Source: EFV Program Office.
Page 17 GAO-06-349 Defense Acquisitions 

conducted a root-cause analysis, which determined that loading—while no 

longer excessive—was inappropriately distributed on the bow flaps. 

Following corrective action, tests were conducted in Hawaii during July to 

August 2005 to validate the load capacity of the new bow flap. These tests 

revealed that the design of the new bow flap needed some refinements in 

order to meet the operational requirement that the EFV be capable of 

operating in 3-foot significant wave heights.14 A program official indicated 

that the test results will be used to refine the design of the new bow flap. 

However, the refined bow flap design will not be tested in the 

operationally required 3-foot significant wave heights until initial 

operational testing and evaluation, well after the program enters low-rate 

initial production. 

Hydraulic systems are key components in the EFV. For example, they 

control raising and lowering the bow flap, engine cooling systems, marine 

steering, and troop ramps. Hydraulic system failures are one of the top 

reliability drivers in the EFV program. If the reliability requirement is to be 

achieved, the myriad hydraulic problems must be resolved. The EFV has 

encountered hydraulic system problems on both early and SDD 

prototypes. The top four hydraulic system problems are: 

• Leaks from all sources, particularly leaks due to the loosening of 

fittings and connectors because of vibration during EFV operations. 

• Various component mechanical failures experienced during EFV 

testing. 

• Hydraulic fluid pressure spikes, particularly in the EFV’s 

transmission and pumps. 

• Hydraulic fluid contamination by air, water, and particulates. 

Program officials said that the program office has instituted a 

design/test/redesign process to identify deficiencies and implement 

corrections to increase vehicle reliability. According to program officials, 

this process brings together the program office, contractor, various 

subcontractor vendors of hydraulic components, and experts from 

industry and academia to address and correct hydraulic problems as they 

occur. Corrective actions thus far include: 

• Leaks—better sealing of connections; installation of specialized, 

self-locking devices at connections most susceptible to vibration 

leaks; and replacement of rigid tubing with flexible hoses to absorb 

vibration. 

 14Significant wave height is defined as the distance from the crest to the trough of the 

biggest one-third of the waves. 

Hydraulics 
Page 18 GAO-06-349 Defense Acquisitions 

• Component mechanical failures—redesigning, strengthening, and 

upgrading various parts. 

• Hydraulic fluid pressure spikes—reducing gear shifting during EFV 

operations and installing devices to control pressure. 

• Hydraulic fluid contamination—flushing hydraulic systems and 

instituting a variety of monitoring, maintenance, and inspection 

plans to maintain hydraulic fluid and component cleanliness 

requirements. 

Program officials noted that corrective actions thus far have been tested to 

ensure that they resolved the problems, and have been installed on the 

SDD prototype vehicles. We did not independently verify this. 

Based on lower demonstrated reliability and problems with early program 

testing, the EFV’s reliability has not grown as planned. Expectations for 

reliability are now lower, as reflected in the recent reduction to the 

reliability requirement. When SDD began, the EFV was expected to 

demonstrate 48 hours between failures by September 2005. Actual growth 

demonstrated 28 hours between failures in August 2005. At the time of the 

low–rate initial production decision now planned for December 2006, 

demonstrated reliability is projected to be 38 hours between failures. The 

original and current reliability growth curves for the EFV are shown in 

figures 7 and 8, respectively. 

System Reliability
Page 19 GAO-06-349 Defense Acquisitions 

Figure 7: Original Reliability Growth Plan 

Mean time (hours) between operational mission failures

Growth test hours

0

10

20

30

40

50

60

70

80

1,000 12,000 28,000 48,000

Reliability goal—

70 hours

80

hours

Milestone C

about 48 hours

9/2005

Initial operational test,

and evaluation

60 hours

8/2007

Source: GAO analysis of EFV program office data.
Page 20 GAO-06-349 Defense Acquisitions 

Figure 8: Current Reliability Growth Plan 

In comparing the planned and actual reliability growth curves, it is clear 

that the actual test hours accumulated have been significantly less than 

planned. In fact, the original plan called for conducting 12,000 hours of 

testing by the original September 2005 production decision; according to 

the current plan, test hours will not reach this level until early 2008. The 

reduction in test hours is due, in part, to the other problems that occurred 

in testing. The accumulation of test hours is significant for reliability. In 

general, reliability growth is the result of an iterative design, build, test, 

analyze, and fix process. Initial prototypes for a complex product with 

major technological advances have inherent deficiencies. As the 

prototypes are tested, failures occur and, in fact, are desired so that the 

product’s design can be made more reliable. Reliability improves over time 

with design changes or manufacturing process improvements. 

The program office acknowledges that even with the changes in mission 

profile and reduction in the operational requirement, reliability for the 

EFV remains challenging. In addition, the most recent DOT&E annual 

report found that the EFV system’s reliability is the area of highest risk in 

the program.15 DOT&E has reviewed the EFV’s current reliability growth 

 15Director of Operational Test and Evaluation’s Fiscal Year 2005 Annual Report, December 

2005. 

Source: GAO analysis of EFV program office data.

Mean time (hours) between operational mission failures

Growth test hours

0

10

20

30

40

50

60

70

80

1,000 13,000

About

28 hours

8/2005 Low-rate intial

production

38 hours

12/2006

Initial operational test,

and evaluation

43.5 hours

1/2010

Reliability goal—43.5 hours

50 hours

4/2008
Page 21 GAO-06-349 Defense Acquisitions 

plan and believes that it is realistic but can only be validated during initial 

operational testing and evaluation in 2010. 

According to the program manager, an additional 15 months would have 

been needed for more robust reliability testing, production qualification 

testing, and training, after the program entered low-rate initial production 

in September 2005, as originally planned. The March 25, 2005, rebaselining 

extended the schedule by 24 months and postponed low-rate initial 

production until September 2006, which has now been extended to 

December 2006. While DOD’s December 2004, Program Budget Decision 

753 served as the catalyst for this rebaselining, the program manager 

stated that he probably would have asked for a schedule extension of 

15 months after entering low-rate initial production in September 2005, 

even if the budget decision had not occurred. DOD and Marine Corps 

officials verified that, although the program manager did not officially 

request this 15-month extension, he had been discussing an extension with 

them before the budget decision was issued. However, to the extent that 

the extra 9 months resulting from the budget decision prove unneeded for 

program management reasons, they will be an added cause for schedule 

and cost growth. 

Three areas of risk remain for demonstrating design and production 

maturity, which have potential cost and schedule consequences—risks to 

the EFV business case. First, while the EFV program has taken steps and 

made plans to reduce risk in the production phase, production risk 

remains in the program. Current plans are to enter low-rate initial 

production without requiring the contractor to ensure that all key EFV 

manufacturing processes are under control. Second, the EFV program will 

transition to initial production without the knowledge that software 

capabilities are mature. Third, two key performance parameters—

reliability and interoperability—are not scheduled to be demonstrated 

until the initial operational test and evaluation phase in fiscal year 2010, 

about 4 years after low-rate initial production has begun. The program 

office has developed plans to resolve performance challenges and believes 

it will succeed. However, until the plans are actually implemented 

successfully, the EFV’s design and production maturity will not be 

demonstrated and the potential for additional cost and schedule increases 

remains. 

Risks Remain for 

Demonstrating Design 

and Production 

Maturity 
Page 22 GAO-06-349 Defense Acquisitions 

While the EFV program has taken steps and made plans to reduce risk in 

the production phase, production maturity risk remains in the program. 

Current EFV program plans are to enter low-rate initial production 

without requiring the contractor to ensure that all key EFV manufacturing 

processes are under control, i.e., repeatable, sustainable, and capable of 

consistently producing parts within the product’s tolerance and standards. 

Establishing such control is critical to ensuring that the EFV can be 

produced reliably and without unexpected production problems. In 

addition, DOD’s system acquisition policy provides that there be no 

significant manufacturing risks prior to entering low-rate initial production 

and that manufacturing processes be under statistical process control 

prior to starting full-rate production.16 

Leading commercial firms rely on statistical process control to ensure that 

all key manufacturing processes are under control before they enter 

production.17 Statistical process control is a technique that focuses on 

reducing variations in manufactured parts, which in turn reduces the risk 

of entering production with unknown production capability problems. 

Reducing and controlling variability lowers the incidence of defective 

parts and thereby products, which may have degraded performance and 

lower reliability. Defects can also delay delivery and increase support and 

production costs by requiring reworking or scrapping. Consequently, prior 

to entering production, leading commercial firms collect and analyze 

statistical process control data. Leading commercial firms also use a 

measure of process control called the process capability index to measure 

both the consistency and the quality of output of a process. DOD’s 

acquisition policy applies a lower standard. It provides that there be no 

significant manufacturing risks prior to entering low-rate initial production 

and that manufacturing processes be under statistical process control 

prior to starting full-rate production.18

The EFV program is working toward the DOD standard. EFV program 

officials said that statistical process control will not be used to ensure that 

all key EFV manufacturing processes are under control prior to entering 

 16Department of Defense Instruction 5000.2, Subject: Operation of the Defense Acquisition 

System (May 12, 2003). 

17GAO, DOD Acquisition Outcomes: A Case for Change GAO-06-257T (Washington, D.C.: 

November 15, 2005). 

18Department of Defense Instruction 5000.2, Subject: Operation of the Defense Acquisition 

System (May 12, 2003). 

Manufacturing Process 

Maturity Problems 
Page 23 GAO-06-349 Defense Acquisitions 

low-rate initial production. They stated that they have taken actions to 

enhance EFV production readiness. For example, they noted that one of 

the most important risk mitigating actions taken was ensuring that SDD 

prototypes were built using production-representative tooling and 

processes. Program officials also believe that production process maturity 

will be demonstrated by achieving repetitive schedule and quality 

performance during low-rate initial production. In addition, the program 

plans to collect statistical process control data during low-rate initial 

production to track equipment and machine performance and detect 

statistical shifts. The program believes that using statistical process 

control data in this manner will result in earlier detection of machine 

malfunctions. Program officials told us that once sufficient quantities of 

the EFV are produced and baseline statistical process control data 

collected, the results of the analyses of this data will be implemented for 

any production measurements that demonstrate process stability. The 

program office believes that this approach will allow for use of statistical 

process control for implementation of stable manufacturing processes 

during low-rate initial production. However, the program office does not 

plan to set and achieve a process capability index for the EFV production 

efforts. 

The actions taken by the program may help to mitigate some production 

risk. In fact, EFV’s plan to collect and use statistical process control data 

goes further than what we have found on most DOD weapon system 

programs. However, these actions do not provide the same level of 

confidence as having the manufacturing processes under statistical 

process control before production. The EFV program’s approach of 

foregoing such control increases the risk of unexpected production 

problems during manufacturing. This risk is compounded by the fact that 

plans call for reliability and interoperability, along with resolution of other 

technical problems, to be operationally tested and demonstrated during 

low-rate initial production, not before. 

Under current plans, the EFV program is at risk of entering low-rate initial 

production before software development capabilities are mature. Again, 

leading commercial firms ensure that software development capabilities 

are mature before entering production in order to prevent or minimize 

additional cost growth and schedule delays during this phase.19

 19GAO, Best Practices: A More Constructive Test Approach Is Key to Better Weapons 

System Outcomes, GAO/NSIAD-00-199 (Washington, D. C.: July 31, 2000). 

Software Development 

Capability Maturity 

Problems 
Page 24 GAO-06-349 Defense Acquisitions 

Furthermore, DOD’s weapon system acquisition policy calls for weapon 

systems to have mature software development capabilities before they 

enter low-rate initial production.20

In assessing software capability maturity, commercial firms, DOD, and 

GAO consider the software capability maturity model developed by 

Carnegie Mellon University’s Software Engineering Institute to be an 

industry standard. 21 This model focuses on improving, standardizing, and 

certifying software development processes, including key process areas 

that must be established in the software developer’s organization. The 

model is essentially an evolutionary path organized into five maturity 

levels: 

• Level 1, Initial—the software process is ad hoc and occasionally 

chaotic. Few processes are defined, and success depends on 

individual effort. 

• Level 2, Repeatable---basic project management processes are 

established to track cost, schedule, and functionality. The necessary 

process discipline is in place to repeat earlier successes on projects 

with similar applications. 

• Level 3, Defined—the software process for both management and 

engineering activities is documented, standardized, and integrated 

into a standard process for the organization. All projects use an 

approved, tailored version of the organization’s standard process 

for developing and maintaining software. 

• Level 4, Managed—Detailed measures of the software process and 

product quality are collected. Both the software development 

process and products are quantitatively understood and controlled. 

• Level 5, Optimizing—Continuous process improvement is enabled 

by quantitative feedback from the process and from plotting 

innovative ideas and technologies. 

The EFV program has had problems with maturing its software 

development capabilities. The EFV’s prime contractor, General Dynamics 

Land Systems (GDLS), which at the time had a level 3 maturity software 

 20DOD Instructions 5000.2, Subject: Operation of the Defense Acquisition System (May 12, 

2003). 

21GAO, Defense Acquisitions: Stronger Management Practices Are Needed to Improve 

DOD’s Software-Intensive Weapon Acquisitions, GAO-04-393 (Washington, D.C.: March 1, 

2004). 
Page 25 GAO-06-349 Defense Acquisitions 

capability, developed all software for the early EFV program.22 According 

to the program office, when the program entered SDD, responsibility for 

EFV’s software development was transferred to GDLS’ amphibious 

development division, General Dynamics Amphibious Systems (GDAMS). 

GDAMS has a level 1 maturity software capability. Consequently, the SDD 

contract required GDLS to achieve a software development capability 

maturity level 3 for all EFV software contractors and subcontractors 

within 1 year of the contract award date, July 2001. In January 2002, the 

program extended this requirement by 1 year, until July 2003. 

Nevertheless, while GDAMS twice attempted to achieve level 3 software 

development capability maturity, it did not succeed. 

Program officials considered GDAMS’s inability to achieve an acceptable 

level of software development capability maturity a risk to the program. 

To mitigate this risk, in January 2004, the program manager began 

developing a risk mitigation plan. As part of this plan, representatives from 

the EFV program office, GDAMS, and Ogden Air Logistics Center’s 309th

Software Maintenance Group—a certified level 5 maturity software 

development organization—formed a Software Partnership Working 

Group to address software development capability maturity issues. As of 

February 2006, EFV program officials were in the process of negotiating a 

memorandum of agreement with the 309th Software Partnership Working 

Group to develop the EFV’s low-rate initial production software. The 

309th will work in partnership with GDAMS as specified by the terms of the 

memorandum of agreement. Its involvement is to ensure that the EFV’s 

software development capability will be at the desired maturity level. 

However, the 309th Software Maintenance Group will not complete the 

software development for the EFV’s low-rate initial production version 

until September 2006. Furthermore, GDAMS does not plan to insert this 

software into the EFV vehicles until fiscal year 2008, well after low-rate 

initial production has begun. This means that the low-rate initial 

production decision will be made without the integration of mature 

software. Furthermore, the software itself will not be demonstrated in the 

vehicle until well into low-rate initial production. While the program office 

believes that the level of software risk is an acceptable level risk, we have 

 22GDLS now has level 5 certification. 
Page 26 GAO-06-349 Defense Acquisitions 

found that technology—including software—is mature when it has been 

demonstrated in its intended environment.23 

While involving the 309th Software Maintenance Group helps to mitigate 

the risk of immature software development capability in the EFV program, 

it increases certain other risks. The memorandum of agreement distributes 

the responsibility for software development between the three 

participants. However, much of the responsibility for developing a 

working software package in an acceptably mature environment shifts 

from the prime contractor to the Marine Corps. The software will now 

become government-furnished equipment or information. In essence, the 

Marine Corps has now assumed much of the risk in the software 

development effort. If the software does not work according to the 

requirements, it will be incumbent upon the Marine Corps—not the prime 

contractor, GDLS—to correct the problems. Furthermore, if the 

integration of the government-furnished software into the vehicles creates 

additional problems, the Marine Corps could be responsible for 

corrections. Both of these situations could lead to cost and schedule 

growth, and thus increase risks to the program. 

Several EFV performance challenges are not yet fully resolved. 

Specifically, a key performance parameter—interoperability—cannot be 

properly demonstrated until initial operational testing and evaluation in 

fiscal year 2010, well after low-rate initial production has begun. 

Interoperability means that the EFV communication system must provide 

essential command, control, communications, and intelligence functions 

for embarked personnel and EFV units. In addition, the EFV 

communication system must be compatible—able to communicate—with 

other Marine Corps systems as well as with Army, Navy, Air Force, and 

North Atlantic Treaty Organization systems. In order to demonstrate 

interoperability, the EFV must participate in operational tests that involve 

these joint forces. Another key performance parameter—reliability—has 

been problematic and still presents a significant challenge.24 It also is not 

scheduled to be demonstrated until initial operational testing and 

evaluation. Furthermore, the bow flap has been problematic and, while 

 23GAO Missile Defense: Knowledge-Based Practices Are Being Adopted, but Risks 

Remains, GAO-03-441 (Washington, D.C.: April 30, 2003). 

24Director, Operational Test and Evaluation’s FY 2005 Annual Report, December 2005. 

Performance Challenges 

Not Yet Fully Resolved 
Page 27 GAO-06-349 Defense Acquisitions 

improved, still requires some design refinement and has not yet been 

successfully tested at its operational performance level. 

Program officials commented that they have developed plans to resolve 

remaining EFV performance challenges and are optimistic that these plans 

will be implemented effectively and testing successfully completed. 

However, there are no guarantees that this will actually happen. 

Consequently, the performance challenges remain risks to the program 

until they are fully resolved with effective solutions actually demonstrated. 

The EFV has encountered risks to its business case because of problems 

encountered in full-system testing, coupled with an SDD schedule that did 

not allow enough time for conducting the testing and learning from it. 

Using the lens of a knowledge-based business case, the start of SDD was 

sound on requirements and technology maturity (knowledge point 1). 

While design stability was judged to be attained at the critical design 

review (knowledge point 2) immediately after entering SDD, it appears 

that holding critical design review so soon was premature. The acquisition 

strategy did not provide the resources (time and money) necessary to 

demonstrate design maturity and production maturity (knowledge point 

3). However, we do note that the EFV program is planning to do more with 

statistical process control than most other programs we have reviewed. 

In retrospect, the EFV program would have been more executable had the 

SDD phase allowed for completion of early prototype testing before 

holding the SDD critical design review and committing to building the SDD 

prototypes. Another lesson learned is that while it is necessary to 

demonstrate one knowledge point before a subsequent one can be 

demonstrated, this alone is not sufficient. Attaining one knowledge point 

does not guarantee the attainment of the next one. Rather, the acquisition 

strategy for any program must adequately provide for the attainment of 

each knowledge point even in programs, such as the EFV, which were in a 

favorable position at the start of SDD. 

The EFV program has put into place a number of corrective actions and 

plans to overcome and mitigate weaknesses in acquisition strategy. 

Nevertheless, design, production, and software development capability 

maturity have not yet been fully demonstrated and technical problems 

fully corrected. It is important for the business case for the EFV to remain 

valid in light of these changes and that the remainder of SDD adequately 

provide for the demonstration of design, production, and software 

development capability maturity before committing to production. 

Conclusions 
Page 28 GAO-06-349 Defense Acquisitions 

While these problems must be acknowledged and addressed, the fact that 

the EFV program has had a number of sound features should not be 

overlooked. In this vein, the program can still be the source of lessons that 

DOD can apply to other programs. In particular, it is important that all of 

the elements of a sound business case be present at the start of SDD. 

While it is generally recognized that missing an early knowledge point will 

jeopardize the remaining ones, it must also be recognized that later 

knowledge points are not guaranteed even if early ones are achieved. If the 

acquisition strategy does not adequately provide for the attainment of all 

knowledge points, the estimates for cost and schedule will not have a 

sound basis. 

We are recommending that the Secretary of Defense ensure that: 

• EFV design, production, and mature software development 

capabilities are demonstrated before Milestone C; 

• adequate resources are available to cover such demonstration and 

provide for risks; and 

• the business case for EFV (including cost and expected capability), 

after including the above, still warrants continued investment. 

We also recommend that the Secretary of Defense draw lessons learned 

from EFV and apply them to the Defense Acquisition University’s 

curriculum for instructing program executives, managers, and their staffs. 

Such lessons might include understanding that attaining one knowledge 

point does not guarantee the attainment of the next one; the importance of 

having a sound business case for each phase of development; the right 

time to hold a critical design review; and the importance of allowing 

sufficient time to learn from testing. 

In commenting on a draft of our report, DOD’s Acting Director for Defense 

Systems concurred with our recommendations. In doing so, DOD stated 

that the Department currently plans to assess the readiness of the EFV 

program for a low-rate initial production decision within a year. This 

assessment will review the maturity of the EFV design, including software, 

its production readiness for low-rate initial production, and its 

demonstrated capability, as well as program costs and risks. Continued 

investment in EFV will be based on that information. The full text of the 

department’s response is in appendix II. 

Recommendations for 

Executive Actions 

Agency Comments 

and Our Evaluation 
Page 29 GAO-06-349 Defense Acquisitions 

The Department notes that our best practices construct for production 

readiness is difficult to reconcile with its current acquisition production 

decision points. World class companies we have visited do, in fact, often 

have a limited production run that they use to manufacture a small 

number of production representative assets; however, they do not make a 

decision to invest in the tooling necessary to ramp up to full production 

until after those assets have been tested by the customer and their critical 

manufacturing processes are in control. DOD’s low-rate initial production 

decision reflects the decision to invest in all of the resources needed to 

achieve full-rate production. We believe this is too soon and that DOD 

would benefit from this lesson by focusing low-rate initial production on 

demonstrating the product and process and waiting to invest in more 

resources, such as tooling, to ramp up until the full-rate production 

decision has been made. 

We are sending copies of this report to the Secretary of Defense, Secretary 

of the Navy, and other interested parties. We will also provide copies to 

others on request. In addition, the report will be available at no charge on 

the GAO Web site at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact me 

on (202) 512-4841. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. 

GAO staff who made major contributions to this report are listed in 

appendix III. 

Paul L. Francis 

Director, Acquisition and Sourcing Management. 
Appendix I: Scope and Methodology 

Page 30 GAO-06-349 Defense Acquisitions 

To assess the current status of the EFV (particularly the status of the 

production decision), the factors that contributed to the current status, 

and future risks in the program, we interviewed key officials from DOD’s 

Director, Operational Test and Evaluation, the Office of the Secretary of 

Defense’s Program Analysis and Evaluation office, the U.S. Marine Corps, 

Isothermal Systems Research, Inc., in Washington, D.C., and the 309th

Software Maintenance Group, in Ogden, Utah. We also interviewed the 

Direct Reporting Program Manager for the EFV and the prime contractor, 

General Dynamics Land Systems, in Woodbridge Virginia. We examined 

and analyzed pertinent program documentation, including the Selected 

Acquisition Reports; Test and Evaluation Master Plan; Developmental 

Testing Schedule; Budget Justification documents, Program Management 

Plan; Acquisition Strategy Plan; DOD’s Operational Testing, and 

Evaluation reports; Operational Requirement Documents, and the 

Software Development Plan. We relied on previous GAO work as a 

framework for knowledge-based acquisition. 

Appendix I: Scope and Methodology 
Appendix II: Comments from the Department 

of Defense 

Page 31 GAO-06-349 Defense Acquisitions 

Appendix II: Comments from the Department 

of Defense 
Appendix II: Comments from the Department 

of Defense 

Page 32 GAO-06-349 Defense Acquisitions 
Appendix II: Comments from the Department 

of Defense 

Page 33 GAO-06-349 Defense Acquisitions 
Appendix III: GAO Contact and Staff 

Acknowledgement 

Page 34 GAO-06-349 Defense Acquisitions 

Paul Francis (202) 512-4841 

In addition to the contact named above, D. Catherine Baltzell, Assistant 

Director; Leon S. Gill; Danny Owens; Steven Stern; Martin G. Campbell; 

and John Krump made key contributions to this report. 

Appendix III: GAO Contact and Staff 

Acknowledgement 

GAO Contact 

Acknowledgements 

(120447) 
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