United States Government Accountability Office

GAO Report to the Subcommittee on 

Readiness and Management Support, 

Committee on Armed Services, 

U.S. Senate 

BEST PRACTICES

Better Support of 

Weapon System 

Program Managers 

Needed to Improve 

Outcomes 

November 2005 

 

GAO-06-110 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

November 2005

BEST PRACTICES

Better Support of Weapon System 

Program Managers Needed to Improve 

Outcomes 

Highlights of GAO-06-110, a report to the 

Subcommittee on Readiness and

Management Support, Committee on 

Armed Services, U.S. Senate 

The Department of Defense (DOD)

relies on a relatively small cadre of 

officials to develop and deliver

weapon systems. In view of the 

importance of DOD’s investment in 

weapon systems, we have 

undertaken an extensive body of

work that examines DOD’s 

acquisition issues from a

perspective that draws lessons 

learned from the best commercial

product development efforts to see 

if they apply to weapon system

acquisitions. In response to a

request from the Chairman and 

Ranking Minority Member of the

Subcommittee on Readiness and 

Management Support, Senate 

Committee on Armed Services, this 

report assesses (1) how successful 

commercial companies position 

their program managers, (2) how 

DOD positions its program

managers, and (3) underlying 

reasons for the differences.

In compiling this report, GAO

conducted a survey of program 

managers. See GAO-06-112SP. 

What GAO Recommends

GAO recommends the Secretary of

Defense develop an investment

strategy to prioritize needed 

capabilities; require senior 

stakeholders to formally commit to

business cases for new weapon 

system developments; and develop 

a process to instill and sustain 

accountability for successful 

program outcomes. DOD agreed

with our recommendations. 

U.S. weapons are among the best in the world, but the programs to acquire 

them often take significantly longer and cost more money than promised and 

often deliver fewer quantities and capabilities than planned. It is not unusual 

for estimates of time and money to be off by 20 to 50 percent. When costs 

and schedules increase, quantities are cut, and the value for the warfighter—

as well as the value of the investment dollar—is reduced. 

When we examined private sector companies that developed complex and 

technical products similar to DOD, we found that their success hinged on 

the tone set by leadership and disciplined, knowledge-based processes for 

product development and execution. More specifically, long before the 

initiation of a new program, senior company leaders made critical

investment decisions about the firm’s mix of products so that they could 

commit to programs they determined best fit within their overall goals.

These decisions considered long-term needs versus wants as well as

affordability and sustainability. Once high level investment decisions were 

made, senior leaders ensured that programs did not begin unless they had a 

business case that made sure resources were in-hand to execute the 

program—that is, time, technology, money, and people. Once a business 

case was established, senior leaders tasked program managers with 

executing that business case for each new product from initiation to 

delivery, but required their program managers to use a knowledge-based 

product development process that demanded appropriate demonstrations of 

technology, designs, and processes at critical junctures. The program 

manager was empowered to execute the business case, but also held 

accountable for delivering the right product at the right time for the right 

cost. Requiring the program manager to stay throughout the length of a 

project was a principal means of enforcing accountability. Overall, by 

providing the right foundation and support for program managers, the 

companies we visited were able to consistently deliver quality products 

within targets, and in turn, transform themselves into highly competitive 

organizations. 

DOD program managers are put in a very different situation. DOD 

leadership rarely separates long-term wants from needs based on credible, 

future threats. As a result, DOD starts many more programs than it can 

afford--creating a competition for funds that pressures program managers to 

produce optimistic cost estimates and to overpromise capabilities. 

Moreover, our work has shown that DOD allows programs to begin without 

establishing a formal business case. And once they begin, requirements and 

funding change over time. In fact, program managers personally consider 

requirements and funding instability—which occur throughout the 

program—to be their biggest obstacles to success. Program managers also 

believe that they are not sufficiently empowered to execute their programs, 

and that because much remains outside of their span of control, they cannot 

be held accountable. 

www.gao.gov/cgi-bin/getrpt?GAO-06-110

www.gao.gov/cgi-bin/getrpt?GAO-06-112SP

To view the full product, including the scope 

and methodology, click on the links above. 

For more information, contact Michael J. 

Sullivan at (202) 512-4841 or 

sullivanm@gao.gov. 
Contents 

Letter 1

Executive Summary 3 

Purpose 3

Background 3

Results in Brief 4 

Best Practice: Corporate Leadership and Disciplined, KnowledgeBased Processes Are Critical to Program Manager Success 6 

DOD: Critical Support Factors Are Missing 8 

Differences in Incentives Contribute to Differences in Support for 

Program Managers 10 

Chapter 1 Introduction 12 

Long-Standing Problems Hamper Weapons Systems Acquisitions 13 

DOD Program Managers Are Central Executors of the Acquisition 

Process 14

Legislation to Improve Program Manager Proficiency 16 

Objectives, Scope, and Methodology 17 

Chapter 2 Senior Leader Support and Disciplined KnowledgeBased Processes Are Critical Enablers for Program 

Managers 22 

Senior Leadership Provides Program Managers with a Strong 

Foundation for Success 23 

Knowledge-Based Process Followed to Execute Programs 30 

Continued Senior Leadership during Product Development Further 

Enabled Success 35 

Chapter 3 DOD Is Not Supporting Its Program Managers 

Effectively 37 

Senior Leadership Does Not Provide a Strong Foundation for

Success 38

Execution in DOD Does Not Provide Adequate Support and 

Accountability 45

Senior Leader Support during Execution 52 

Page i GAO-06-110 Weapon Program Managers Best Practices 
Chapter 4 Basic Incentives Drive Differences in How Program 

Managers Are Supported and Held Accountable 54 

Definition of Success 55 

Means for Success 56 

Other Differences Put Additional Pressures on DOD Program 

Managers 58

Chapter 5 Conclusions and Recommendations 61 

Recommendations for Executive Action 62 

Agency Comments and Our Evaluation 63 

Appendix I Comments from the Department of Defense 65 

Appendix II GAO Staff Acknowledgments 69 

Related GAO Products 70 

Tables 

Table 1: Acquisition Categories 15 

Table 2: Are Best Practices Present in DOD? 39 

Table 3: Technology Maturity and Program Outcomes 42 

Table 4: Are Best Practices Present in DOD? 47 

Table 5: Program Manager Views on Formal vs. Informal Authority 50 

Figures 

Figure 1: Critical Support and Accountability Factors 23 

Figure 2: 2005 Toyota Avalon 28 

Figure 3: Siemens Bi-Plane AXIOM Artis 30 

Figure 4: Best Practice Roles, Responsibilities, and Behaviors of 

Senior Managers 36 

Figure 5: Breakdowns in Support and Accountability Factors 38 

Figure 6: Highlights of Program Manager Comments Regarding 

Competition for Funding 40 

Page ii GAO-06-110 Weapon Program Managers Best Practices 
Figure 7: To What Extent Were the Parameters of Your Program 

Reasonable at Program Start? 43 

Figure 8: How Program Managers Responded to an Open-ended 

Question on What Were the Biggest Obstacles They Faced 44 

Figure 9: Highlights of Program Manager Comments on What Types 

of Authority They Need 51 

Figure 10: Key Differences in Definition of Success and Resulting 

Behaviors 55

Figure 11: Commercial vs. DOD Oversight Environments 59 

Abbreviations 

DAWIA Defense Acquisition Workforce Improvement Act

DOD Department of Defense 

OSD Office of the Secretary of Defense 

PEO program executive officer 

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reproduce this material separately. 

Page iii GAO-06-110 Weapon Program Managers Best Practices 
United States Government Accountability Office

Washington, DC 20548 

November 30, 2005 

The Honorable John Ensign 

Chairman 

The Honorable Daniel K. Akaka 

Ranking Minority Member 

Subcommittee on Readiness and Management Support 

Committee on Armed Services 

United States Senate 

As you requested, this report examines how program managers in the 

Department of Defense are supported and how they are held accountable

for program outcomes. It compares department polices and practices to 

those of leading commercial companies we visited and discusses actions 

DOD could take to improve the accountability of program managers and 

provide them with timely support as they manage the development of 

complex systems. We make recommendations to the Secretary of Defense

to (1) develop an investment strategy to prioritize needed capabilities, 

(2) require, for each new program, that senior level stakeholders formally 

commit to a business case for program approval at the start of a new 

program, and (3) implement a process to instill and sustain accountability 

for successful program outcomes. 

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

Secretary of the Army; the Secretary of the Navy; the Secretary of the Air 

Force; the Director, Missile Defense Agency; the Director of the Office of 

Management and Budget; and interested congressional committees. We 

will also make copies available to others upon request. In addition, the 

report will be available at no charge on the GAO Web site at 

http://www.gao.gov. 

Page 1 GAO-06-110 Weapon Program Managers Best Practices 
If you have any questions regarding this report, please call me at (202) 

512-4841. Staff acknowledgements are listed in appendix II. 

Michael J. Sullivan 

Director, Acquisition and 

 Sourcing Management 

Page 2 GAO-06-110 Weapon Program Managers Best Practices 
Executive Summary 

Page 3 GAO-06-110 Weapon Program Managers Best Practices 

Executive Summary 

Purpose The Department of Defense (DOD) plans to increase its investment in the 

research, development, and procurement of new weapon systems from

$144 billion in fiscal year 2005 to $185 billion in fiscal year 2009. U.S. 

weapons are among the best in the world, but the programs to acquire 

them often take significantly longer and cost more money than promised 

and often deliver fewer quantities and other capabilities than planned. It is

not unusual for estimates of time and money to be off by 20 to 50 percent. 

When costs and schedules increase, quantities are cut, and the value for 

the warfighter—as well as the value of the investment dollar—is reduced. 

In view of the importance of DOD’s investment in weapon systems, we 

have undertaken an extensive body of work that examines DOD’s 

acquisition issues from a different, more cross-cutting perspective—one 

that draws lessons learned from the best commercial product 

development efforts to see if they apply to weapon system acquisitions. In 

response to a request from the Chairman and Ranking Minority Member of 

the Subcommittee on Readiness and Management Support, Senate 

Committee on Armed Services, this report assesses (1) how successful 

commercial companies position their program managers, (2) how DOD 

positions its program managers, and (3) underlying reasons for the 

differences. 

DOD relies on a relatively small cadre of military and civilian officials—

known as program managers—to lead the development and delivery of its 

weapon systems. The responsibility placed on this group is enormous. The 

systems that program managers are responsible for range from highly 

complex and sophisticated aircraft, missile interceptors, submarines, and 

space-based sensors, to new communication and ground control systems 

that support and interconnect this equipment, to smaller, less complex 

systems that support the warfighter. In these times of asymmetric threats 

and netcentricity, individual weapon system investments are getting larger 

and more complex. The development process itself is very challenging as 

many systems require successful management and coordination of a broad 

array of military service and DOD officials, outside suppliers, internal and 

external oversight entities, as well as technical, business, contracting, and

management expertise. Moreover, in many cases, weapon systems are also 

expected to incorporate technologies that push the state-of-the-art while 

operating in harsh and even untested environments—adding daunting 

technical challenges to the already existing business, management, and 

logistical challenges. Lastly, GAO has reported many of the business 

processes that support weapons development—strategic planning and 

budgeting, human capital management, infrastructure, financial 

Background 
Executive Summary 

management, information technology, and contracting—are beset with 

pervasive, decades-old management problems, which include outdated

organizational structures, systems, and processes.1

Weapon system program managers are the central executors of the 

acquisition process. They are responsible for all aspects of development 

and delivery of a new system and for assuring that systems are high 

quality, affordable, supportable, and effective. In carrying out this 

responsibility, they are also responsible for balancing factors that 

influence cost, schedule, and performance. DOD employs about 

729 program managers to run its weapons programs. Both military officers 

and civilians serve as program managers, but the majority is from the 

military. DOD’s program managers typically report to program executive 

officers (PEO) who are charged with overseeing the execution of a 

portfolio of related systems. PEOs, in turn, typically report to a military 

service acquisition executive, who reports to a service secretary, or for 

some programs, the PEO reports to the Defense Acquisition Executive. 

Program managers from the leading companies we spoke with believed 

that two critical enablers—(1) support from top leadership and 

(2) disciplined, knowledge-based processes for product development 

execution—empowered them to succeed in delivering new products when 

needed within cost, quality, and performance targets originally set by the 

company. Long before the initiation of a new product development, senior 

company leaders make critical strategic investment decisions about the 

firm’s mix of products and the return on investment they may yield. Once 

high-level investment decisions were made, senior leaders ensured that 

programs did not begin unless they had a business case that demonstrated 

the program was aligned with the company’s goals and that resources 

were in-hand to execute the program—that is, time, technology, money,

and people. Once a business case was established, senior leaders tasked 

program managers with executing that business case for each new product 

from initiation to delivery, but required their program managers to use a 

knowledge-based product development process that demanded 

appropriate demonstrations of technology, designs, and processes at 

critical junctures. The program manager was empowered to execute the 

Results in Brief 

 1 Defense Management: Key Elements Needed to Successfully Transform DOD Business 

Operations, GAO-05-629T (Washington, D.C.: April 28, 2005) and High-Risk Series: An 

Update, GAO-05-207 (Washington, D.C.: January 2005). 

Page 4 GAO-06-110 Weapon Program Managers Best Practices 
Executive Summary 

business case, but also held accountable for delivering the right product at 

the right time for the right cost. Throughout execution, company senior 

leaders supported their program managers by encouraging open and 

honest communication and continually assured that the right levels of 

resources and management attention were available for the project. 

While DOD has taken action in recent years to better position programs 

for success, it puts its program managers in a very different situation. 

Program managers themselves believe that rather than making strategic 

investment decisions, DOD starts more programs than it can afford and 

rarely prioritizes them for funding purposes. The result is a competition 

for funds that creates pressures to produce optimistic cost and schedule 

estimates and to overpromise capability. Our own work has shown that 

many programs begin without a business case, that is, without adequate 

knowledge about technology, time, and cost and without demonstrating 

that the program itself is the optimal approach for achieving a needed 

capability. Moreover, once programs begin, the program manager is not 

empowered to execute the program. In particular, program managers 

cannot veto new requirements, control funding, or control staff. In fact, 

program managers personally consider requirements and funding 

instability to be their biggest obstacles to success. Program managers also 

believe that they are not sufficiently supported once programs begin. In

fact, they must continually advocate for their programs in order to sustain 

support. Our past reports also show that programs are incentivized to 

suppress bad news and to continually produce optimistic estimates—

largely due to continual funding competition. 

Many of these differences can be attributed to how success is defined 

within the commercial and DOD environment. Success for the commercial 

world is straightforward and simple: maximize profit. In turn, this means 

selling products to customers at the right price, the right time, and the 

right cost. With this imperative in hand, companies have no choice but to 

adopt processes and cultures that emphasize basing decisions on 

knowledge, reducing risks prior to undertaking new efforts, producing 

realistic cost and schedule estimates, and assuring consistency and quality 

pervade all efforts. At first glance, DOD’s definition of success is very 

similar: deliver capability to the warfighter at the right price, the right 

time, and the right cost. But, for various reasons, it is clear that the implied 

definition for success is to attract funds for new programs and to keep 

funds for ongoing programs. While the annual appropriations process and 

the wide variety of mission demands placed on DOD contribute to this 

condition, DOD has made matters worse by not making hard tradeoff 

decisions to ensure it does not pursue more programs than it can afford. 

Page 5 GAO-06-110 Weapon Program Managers Best Practices 
Executive Summary 

Once attracting funds becomes “success,” harmful practices emerge. For 

example, it is not in a program manager’s interest to develop accurate

estimates of cost, schedule, and technology readiness, because honest 

assessments could result in lost funding. Delayed testing becomes 

preferred over early testing because that will keep “bad news” at bay. In 

turn, knowing data being reported to them may not be reliable, senior 

leaders believe they cannot trust it and must instill multiple oversight 

mechanisms. Any attempts to improve policy and processes eventually 

succumb to funding competition because no one wants to risk loss of 

support. 

We are making recommendations to DOD to better position program 

managers for success. These recommendations focus on what is needed to 

be done to provide the strategic leadership needed to provide the right 

foundation for starting programs, ensure an executable business case is 

delivered to program managers, and to hold program managers 

accountable for successful outcomes. It is important to note that the 

success of all of our recommendations hinge on DOD’s ability to instill 

more discipline and leadership over the investment process. After a review

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

provided some additional comments. The full text of DOD’s comments 

may be found in appendix I. 

At all of the companies we visited, support for program managers began 

well before they were assigned to a new product development effort—

with high-level strategic planning and investment decisions and concerted 

efforts to make sure that any new initiative the company undertook was 

achievable within the time and money and other resources the company 

had available. Technology development and program advocacy were also

generally kept out of a program manager’s domain. Once new efforts got 

off the ground, program managers were empowered to manage resources, 

encouraged to bring up problems and propose solutions, and consult with 

senior leaders without fear of losing their support. At the same time, 

however, they were expected to base their decisions on hard data and to 

assure the right knowledge was in-hand before proceeding into the next 

phases of development. They were also held accountable for their choices, 

though companies generally found that with good pre-program decisions, 

a good launch, a sound, disciplined process for execution, and continued 

support, there was little need to punish or remove their program 

managers. Ultimately, as long as a program manager could deliver the right 

product at the right time for the right cost, he was incentivized to do so 

without interference from above. 

Best Practice: 

Corporate Leadership 

and Disciplined, 

Knowledge-Based 

Processes Are Critical 

to Program Manager 

Success

Page 6 GAO-06-110 Weapon Program Managers Best Practices 
Executive Summary 

According to commercial program managers we spoke with, the most 

critical support factors included the following: 

• Investment strategies. Each of the companies we visited followed a 

rigorous process to forecast market needs against company resources, 

economic trends, available technologies, and its own strategic vision. 

These exercises culminated in short- and long-term investment strategies 

that provided program managers with confidence that the company was 

committed to their particular program and showed them where the project 

fit within overall corporate goals. 

• Evolutionary development. All of the companies followed an incremental 

path toward meeting market needs rather than attempting to satisfy all 

needs in a single step. This provided program managers with more 

achievable requirements, which, in turn, facilitated shorter cycle times. 

With shorter cycle times, the companies could ensure both program 

managers and senior leaders stayed with programs throughout the 

duration. 

• Matching requirements to resources. Once specific product concepts were 

identified, the companies worked vigorously to close gaps between 

requirements/customer needs, and resources—time, money, and 

technology. In effect, this took the investment strategy down to a project 

level, assuring that the program manager would be well positioned to 

execute within cost and schedule. 

• Matching the right people to the program. All of the companies we visited 

took steps to ensure that they assigned the right people to the right 

programs. These included long term efforts to train and groom technical 

staff into program managers, mentoring on the part of senior leaders with 

program management experience, handpicking program managers based 

on their expertise and experience, and supporting program managers with 

teams of highly qualified functional and technical experts. 

• Knowledge-driven development decisions. Once a new product 

development began, program managers and senior leaders used 

quantifiable data and demonstrable knowledge to make go/no-go 

decisions. These covered critical program facets such as cost, schedule,

technology readiness, design readiness, production readiness, 

relationships with suppliers, etc. Development was not allowed to proceed 

until certain thresholds were met, for example, a high percentage of 

engineering drawings completed or production processes under statistical 

control. Development processes were also continually tailored based on 

lessons learned. Program managers themselves placed high value on these 

Page 7 GAO-06-110 Weapon Program Managers Best Practices 
Executive Summary 

requirements, as they ensured programs were well positioned to move into 

subsequent phases and were less likely to encounter disruptive problems. 

• Empowerment. At all the companies we visited, program managers were 

empowered to make decisions as to whether programs were ready to 

move forward and to resolve problems and implement solutions. They 

could redirect available funding, if needed. They could change team 

members. Prior to development, they often had a say in what requirements 

they would be handed. 

• Accountability. With authority, came accountability. Program managers at

all of the companies we visited were held accountable for their choices. To

assure accountability, senior leaders set goals that were clear to the entire 

project team and provided incentives for program managers and others to 

meet those goals. 

• Tenure. All of the companies we visited required that program managers 

stay on until the end of the program. This was a primary means of assuring 

accountability. 

• Continued senior leadership. In addition to empowering them, program 

managers credited senior leaders with other vital levels of support. 

Namely, senior leaders’ commitment to their programs were unwavering,

they trusted their program managers, they encouraged them to share bad 

news, and they encouraged collaboration and communication. At the end

of the day, it was the senior leaders’ job to anticipate and remove 

obstacles and provide the right levels of support so that the path was 

cleared for the program manager to execute the program. 

At DOD, program managers are not put in a position to deliver a product 

within estimates, nor are they held accountable when there are failures to 

deliver products within estimates. While senior leaders work hard to 

develop a short- and long-term vision for the defense of the United States,

these visions are rarely translated into realistic investment strategies that

assure the right mix of programs is being pursued. Moreover, while 

recognized in policy as a best practice, DOD does not always make sure 

that there is a business case for new initiatives. Lastly, program managers 

are not empowered to execute programs once they begin or held 

accountable when programs get off track. 

The primary problem, according to many program managers and verified 

by GAO’s work, is that DOD starts more programs than it can afford and 

does not prioritize programs for funding. This creates an environment 

DOD: Critical Support 

Factors Are Missing 

Page 8 GAO-06-110 Weapon Program Managers Best Practices 
Executive Summary 

where programs must continually compete for funding. Before programs 

are even started, advocates are incentivized to underestimate both cost 

and schedule and overpromise capability. 

A second problem is that gaps between resources and requirements are 

not closed before or even during program development. For example, we

have reported that DOD allows many programs to go forward without 

knowing whether critical technologies—such as satellite’s main sensor, a 

fighter aircraft’s stealth technology, a new tank’s networking capability—

can work as intended. Invariably, when programs start with such 

unknowns, they spend a great deal of time and money later on fixing 

technical glitches while simultaneously trying to get other program 

aspects on track. One reason programs begin with immature technologies 

is that program advocates are rushed to start the acquisition program 

because it assures at least an initial commitment of funding. Compounding 

this problem is the fact that acquisition programs tend to attract funds 

over other activities, including science and technology efforts that 

ultimately support acquisition. As a result, program managers are 

incentivized to take on tasks that really should be accomplished within a 

laboratory environment, where it is easier and cheaper to discover and

address technical problems. 

A third problem is that program managers themselves are not empowered 

to execute their programs. First, they have little control over funding and 

they cannot count on funding to be stable. When funding is taken away, 

program managers often find themselves in a negative spiral of 

funding-related problems—particularly because they’ve already made 

commitments to contractors based on certain anticipated levels of 

funding. Second, they cannot veto new requirements. Faced with long 

development life cycles and promising technology advances, users often 

ask for new or better capabilities as a program proceeds forward. Program 

managers themselves are not always empowered to say “no” to demands 

that may overly stretch their programs, and few senior leaders above them 

have been willing to. In addition, program managers have little authority 

over staffing and the ability to shift funds within the program. With so 

much outside their span of control, program managers say that DOD is 

unable to hold them accountable when programs get off track. Another 

reason that it is difficult to hold program managers accountable is that 

their tenure is relatively short. The problems being encountered today may 

well be the result of a poor decision made years ago by another program 

manager. 

Page 9 GAO-06-110 Weapon Program Managers Best Practices 
Executive Summary 

DOD has tried to improve its processes and policies to better position 

programs for success. For example, policies embrace the concept of 

closing gaps between requirements and resources before launching new 

programs, and DOD is making changes to requirements setting and 

funding processes in an attempt to strengthen investment decisions. At 

this point, however, program managers do not see trade-offs being made in 

the front-end of product development that would ensure DOD could fully 

commit to their programs and allow program managers themselves to 

focus solely on executing their programs. The level of trust, collaboration

and communication is low, while the level of oversight and second 

guessing is high. 

Differences between how program managers are supported and held 

accountable are rooted in differences in incentives and resulting 

behaviors. This begins with the definition of success. The commercial 

firms we studied concluded their survival hinged on their ability to 

increase their market share, which, in turn, meant developing higher 

quality products, at the lowest possible price, and delivering them in a 

timely fashion—preferably before their competitors could do the same. 

This imperative meant that they had no choice but to narrow the gap

between requirements and resources in a manner that not only ensured 

they met their market targets, but did so in a manner that consumed 

resources fairly efficiently. It also meant that they had no choice but to 

fully support the development effort, instill strategic planning and 

prioritization, work collaboratively, follow a knowledge-based process 

that makes product development manageable, and, ultimately, make 

everyone accountable for success. Ultimately, the companies developed 

processes that embodied these tenets for success. At the strategic level,

these include accurate, strategic planning and prioritization to ensure the

right mix of products are pursued and strong systems engineering to help 

them establish a realistic business case. At the tactical level, companies 

developed development processes that required certain thresholds of 

knowledge to be gained before a decision to proceed forward is made. 

In theory, DOD’s success likewise hinges on its ability to deliver highquality weapons to the warfighter in a timely fashion. But in practice, 

success is defined as the ability of a program to win support and attract 

funds. Of course, there are reasons for this disconnect. Corporate revenue

is generated by customer sales while DOD’s funding is dependent on 

annual appropriations. Corporations go out of business when their 

product development efforts do not succeed; DOD does not. Selling 

products to customers is the single focus of a private-sector company 

Differences in 

Incentives Contribute 

to Differences in 

Support for Program 

Managers 

Page 10 GAO-06-110 Weapon Program Managers Best Practices 
Executive Summary 

while DOD is charged with a myriad of important missions—each of which 

also competes for budget share. Nevertheless, these conditions create a 

vastly different set of processes and behaviors affecting program 

managers. Program managers are incentivized, for example, to be 

optimistic and suppress bad news because doing otherwise could result in 

a loss of support and funding and further damage their program. In short, 

unknowns become acceptable and desirable rather than unacceptable as 

they are in the corporate environment. And accountability becomes much 

more difficult to define. 

Page 11 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

Page 12 GAO-06-110 Weapon Program Managers Best Practices 

Chapter 1: Introduction 

DOD plans to spend about $1.3 trillion for its major programs between 

2005 and 2009 and increase its investment in research and development 

during that period by about 28 percent—from $144 billion to $185 billion. 

Although DOD’s weapons are widely regarded as unrivaled in superiority, 

DOD has not received a predictable return on investment in major weapon 

systems acquisitions. For decades, many of DOD’s weapon systems 

acquisitions have experienced large cost increases and extended 

schedules, which, in turn, have jeopardized performance and, more 

broadly, undermined DOD’s buying power. 

To help better position DOD to successfully field weapons, we have 

undertaken a body of work over the past decade that has examined 

lessons learned from the best commercial product development efforts to 

see if they can be applied to DOD weapon system development. Leading 

commercial firms have developed increasingly sophisticated products in 

significantly less time and at lower costs. Our previous best practices 

reports1

 have examined such topics as matching resources with 

requirements, controlling total ownership costs, effective use of testing, 

and product development. This report examines the program manager’s 

role and the mechanisms that DOD and leading commercial companies use 

to position program managers for success and hold them accountable. As 

the central executor of the acquisition process, DOD depends on its 

program managers to efficiently and effectively run its large range of 

complex weapon systems acquisitions. 

The challenge that program managers now face is massive. Weapon 

systems themselves are becoming increasingly sophisticated and 

interdependent and, therefore, more complicated and difficult to develop. 

At the same time, however, DOD is faced with threats that are constantly 

evolving, requiring quicker development cycles and more flexibility within 

weapons programs. Moreover, many of the business processes that 

support weapons development—strategic planning and budgeting, human 

capital management, infrastructure, financial management, information 

technology, and contracting—are beset with pervasive, decades-old 

management problems, including outdated organizational structures, 

systems, and processes. In fact, these areas—along with weapons system 

acquisitions—are on GAO’s high-risk list of major government programs 

and operations. Lastly, while DOD plans to considerably ramp up weapons 

system spending in the next 5 years in an effort to dramatically transform 

 1

 A complete list of best practices reports is at the end of this report. 
Chapter 1: Introduction 

how it carries out its military operations, it is likely to face considerable 

pressure to reduce its investment in new weapons as the nation addresses 

long-term fiscal imbalances. 

While DOD’s acquisition process has produced weapons that are among 

the best in the world, it also consistently yields undesirable 

consequences—such as cost increases, late deliveries to the warfighter, 

and performance shortfalls. Such problems have been highlighted, for 

example, in our past reviews of DOD’s F/A-22 Raptor, Space-Based 

Infrared System, Airborne Laser, the Joint Strike Fighter, and other 

programs. Our past work has found that problems occur because DOD’s 

weapon programs do not capture early on the requisite knowledge that is 

needed to efficiently and effectively manage program risks. For example, 

programs move forward with unrealistic cost and schedule estimates, lack

clearly defined and stable requirements, use immature technologies to 

launch the product development, and fail to solidify design and 

manufacturing processes at appropriate junctures in development. 

When costs and schedules increase, quantities are cut and the value for the 

warfighter, as well as the value of the investment dollar, is reduced. 

Moreover, in these times of asymmetric threats and netcentricity, 

individual weapon system investments are getting larger and more 

complex. Just 4 years ago, the top five weapon systems cost about 

$281 billion; today, in the same base year dollars, the top five weapon 

systems cost about $521 billion.2

 If these megasystems are managed with 

traditional margins of error, the financial consequences—particularly the

ripple effects on other programs—can be dire. 

DOD has long recognized such problems and initiated numerous 

improvement efforts. In fact, between 1949 and 1986 five commissions 

studied issues such as cycle time and cost increases as well as the 

acquisition workforce. DOD has also undertaken a number of acquisition 

reforms. Specifically, DOD has restructured its acquisition policy to 

incorporate attributes of a knowledge-based acquisition model and has 

reemphasized the discipline of systems engineering. In addition, DOD 

Long-Standing 

Problems Hamper 

Weapons Systems 

Acquisitions 

 2

 These figures represent the costs for the top five weapon systems in 2001 and the top five 

in 2005. For 2001, these systems were F/A-22 Raptor, DDG-51 Guided Missile Destroyer, 

Virginia Class Submarine, C-17 Globemaster III, and the F/A 18 E/F, Naval Strike Fighter. 

The 2005 systems include the Joint Strike Fighter, Future Combat System, F/A- 22 Raptor, 

DDG-51 Guided Missile Destroyer, and the Virginia Class Submarine. 

Page 13 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

recently introduced new policies to strengthen its budgeting and 

requirements determination processes in order to plan and manage 

systems based on joint warfighting capabilities. While these policy changes 

are positive steps, we recently testified that implementation in individual

programs has not occurred because of inherent funding, management, and 

cultural factors that lead managers to develop business cases for new 

programs that overpromise on cost, delivery, and performance of weapon

systems. 

DOD relies on a cadre of military and civilian officials—known as program 

managers—to lead the development and delivery of hundreds of weapon 

systems and subsystems. The services report a combined total of 

729 program managers currently executing programs at all acquisition 

category levels. The systems that program managers are responsible for 

range from highly sophisticated air, land, sea, and space-based systems to 

smaller, less complex communications or support equipment that 

interconnects or supports larger systems. Program managers are 

responsible for assuring that these systems are reliable, affordable, 

supportable, and effective. They carry out multiple roles and 

responsibilities and are expected to have a working knowledge in such 

diverse areas as contracting, budgeting, systems engineering, and testing.

DOD classifies its acquisition programs into categories based upon a 

number of factors such as their size, cost, complexity and importance. The 

largest, most complex and expensive programs generally fall under the 

responsibility of the Under Secretary of Defense (Acquisition, Technology 

and Logistics) while less complex and risky programs are overseen by the 

service or component acquisition executive. Table 1 provides more details. 

DOD Program 

Managers Are Central 

Executors of the 

Acquisition Process 

Page 14 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

Table 1: Acquisition Categories

Acquisition

category Definition Program examples

 Category I Research, development, test, and 

 evaluation > $365M 

Procurement > $2.19B 

Milestone decision authority:

1D: Under Secretary of Defense 

 (Acquisition, Technology and Logistics) 

1C: Service Acquisition Executive 

Future Combat System 

DD(X) Destroyer 

B-1 Aircraft 

 Category II Research, development, test, and 

 evaluation > $140M 

Procurement > $660M 

Milestone decision authority:

Service or Component Acquisition 

 Executive 

All Source Analysis 

 System 

KC-130J Aircraft 

Joint Surveillance and 

 Target Attack Radar 

 System 

Category III No fiscal criteria 10k W Auxiliary Power 

 Unit 

Assault Breaching Vehicle 

C-5 Avionics 

Category IV No fiscal criteria (Navy and Marine Corps 

 only) 

C-130 Night Vision 

 Lighting 

Advanced Recovery 

 Control System 

Source: GAO.

Note: Category I systems are referred to as “programs” and smaller related subsystems are called 

“projects” or “products.” For example, the Air Force’s B-1 aircraft system–a category IC program–

includes category II and III projects that may have a designated manager. Category 1D and 1C 

programs are distinguished by their milestone decision authority. 

Program managers typically supervise a large staff of engineers, 

contracting personnel, logisticians, business, financial, and administrative

personnel. The number of people assigned to program offices varies 

widely and depends on factors such as the complexity of the system, the 

category level, and the availability of staff. For example, the Joint Strike 

Fighter, a category ID program, is managing the development of three 

configurations of a new aircraft for the Navy, Marines and Air Force, and 

currently has about 200 government and international personnel assigned. 

By contrast the Light Utility Helicopter, a category II project relying largely 

on commercial off-the-shelf components, has a staff of 34. 

To successfully deliver a weapon system to the user, program managers 

must also work with a range of individuals outside their sphere of 

influence such as those charged with independent cost estimating, testing, 

funding, writing requirements, security, and ensuring interoperability. 

Page 15 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

Simultaneously, the program manager is responsible for overseeing, 

integrating, and evaluating the defense contractor’s work as the 

development progresses. Moreover, some program managers lead 

international teams. For example, the Joint Strike Fighter Program Office, 

in addition to the military, civilian, and contract team members, has eight 

international partners and approximately 40 international team members.

The majority of DOD program managers for category I programs are 

military officers at the rank of colonel or (Navy) captain. Subsystem 

program managers are usually lower in rank and report directly to the 

system program manager. DOD also employs civilian program managers, 

usually GS-15s for its category I programs. As a rule, program managers 

report to a Program Executive Officer—a civilian at the senior executive 

level or military officer at the general officer rank—who typically manages 

a portfolio of related weapon systems. However, some program executive 

officers are responsible for a single large program, such as the Joint Strike 

Fighter or the F-22 aircraft. One level up from the program executive 

officer is the Service Acquisition Executive, a civilian (often a political 

appointee) who reports to the service Secretary. Programs classified as a 

category ID report through the defense acquisition executive, 

Undersecretary of Defense (Acquisition, Technology and Logistics), as 

their milestone decision authority. 

Program manager training and tenure is now governed by legislation 

known as the Defense Acquisition Workforce Improvement Act (DAWIA),3

enacted in 1990 after studies showed that a key problem affecting 

acquisitions was that program managers did not stay in their positions 

long enough to be accountable for outcomes and that many simply lacked 

the training and experience needed to assume their leadership roles. 

Congress amended the law in the fiscal year 2004 and 2005 defense 

authorization acts to allow the Secretary of Defense more flexibility to 

tailor tenure, experience, and education qualifications for program 

managers. 

The act specifically created a formal acquisition corps and defined 

educational, experience, and tenure criteria needed for key positions, 

including program managers as well as contracting officers and others 

involved the acquisition process. The act also provided for the

Legislation to 

Improve Program 

Manager Proficiency 

 3

 10 U.S.C.§ 1701 et seq. (P.L. 101-510. Div A. Title XII (November 5, 1990)).

Page 16 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

establishment of a defense acquisition university to provide educational 

development and training for acquisition personnel. Under DOD 

regulations program managers are required to attend training and meet 

course requirements through the university in order to meet certification

requirements for the program management track.

There are three progressive certification levels: basic, intermediate, and 

advanced. Program managers of major defense acquisition programs are 

required to have Level 3 certification, which requires four years of 

acquisition experience and an advanced level Defense Acquisition 

University course in program management. DOD prefers that individuals 

with Level 3 certification have a Master’s degree in engineering, systems 

acquisition management, or business administration, and complete 

additional external coursework in relevant fields. 

The Chairman and the Ranking Member, Subcommittee on Readiness and 

Management Support, Senate Committee on Armed Services, requested 

that we examine best practices and DOD procedures for factors that affect 

program manager effectiveness. Our overall objectives for this report were 

to (1) identify best practices that have enabled organizations to

successfully position their program managers for success, (2) identify 

DOD practices for supporting program managers and holding them 

accountable, and (3) compare and contrast DOD and commercial practices 

in order to identify possible improvements to DOD practices.

To identify the best practices and processes that commercial companies 

employ to position their program managers for success, we used a case 

study methodology. We selected companies that, like DOD, research, 

develop, and field products, using program managers as the central 

executors of the programs. Selection of the companies was also based 

upon recognition by the American Productivity and Quality Center and the 

Project Management Institute and the recommendations of experts. Below 

are descriptions of the three companies that are specifically featured in 

this report. 

Objectives, Scope, 

and Methodology 

• Toyota Motor Manufacturing of North America, Inc. 

Toyota Motor Manufacturing of North America, Inc., the third largest 

automobile producer in the world and the fifth largest industrial company 

in the world, designs, manufactures, and markets cars, trucks, and buses 

worldwide. In 2005, the company reported total net sales of $172.7 billion.

We met with individuals involved with the development of the 2005 Toyota

Page 17 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

Avalon, a full-size sedan, at Toyota Motor Manufacturing in Erlanger, 

Kentucky. 

• Siemens Medical Solutions USA, Inc. 

Siemens Medical Solutions is one of the world’s largest suppliers in the 

healthcare industry. Siemens Medical manufactures and markets a wide 

range of medical equipment, including magnetic resonance imaging 

systems, radiation therapy equipment, ultrasound equipment, and patient

monitoring systems. We met with individuals from the Angiography, 

Cardiology, and Neurology business unit, located in Hoffman Estates, 

Illinois. 

• Motorola, Inc. 

Motorola is a Fortune 100 global communications leader that provides 

seamless mobility products and solutions across broadband, embedded 

systems and wireless networks. Seamless mobility harnesses the power of 

technology convergence and enables smarter, faster, cost-effective, 

flexible communication in homes, autos, workplaces and all spaces in 

between. Motorola had sales of $31.3 billion in 2004. We visited its offices

in Arlington Heights, Illinois, and discussed program management 

practices and processes with representatives from the Networks sector. 

In addition to the three companies featured in this report, we visited two 

additional successful firms to assess whether they employed similar 

processes and practices for program management. These include Molson 

Coors Brewing Company and Wells Fargo. Both companies have 

undertaken projects that reflect some of the complexity and challenges 

that a DOD weapon systems program would face. For example, we met 

with managers of a Molson project intended to automate day-to-day 

marketing operations for digital assets. We also met with Wells Fargo 

officials who developed an electronic imaging process for paperless check 

clearance. At both companies, we also discussed broader corporate 

investment processes that supported these particular internal projects as 

well as the companies’ main service lines. 

For each of the five companies, we interviewed senior management 

officials and program managers to gather consistent information about 

processes, practices, and metrics the companies use to support program 

managers and hold them accountable. In addition to the case studies, we 

synthesized information from GAO’s past best practices work about 

product development. 

Page 18 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

We also examined key best practices studies related to program 

management, including studies from organizations such as the Project 

Management Institute and the American Productivity and Quality Center.

Moreover, we relied on our previous best practice studies, which have 

examined incentives and pressures affecting weapon system programs, the 

optimal levels of knowledge needed to successfully execute programs, and 

complementary management practices and processes that have helped 

commercial and DOD programs to reduce costs and cycle time. 

In order to determine DOD practices for supporting program managers 

and holding them accountable, we conducted five separate focus groups 

between July and October 2004. Each group was composed of project 

managers from one of the services or the Missile Defense Agency. A total 

of 28 acquisition category I program managers representing a range of 

DOD programs were identified by their respective services for the 

meetings held in separate locations in Huntsville, Ala.; El Segundo, Calif.; 

Dayton, Ohio; Arlington, Va.; and Ft. Belvoir, Va. For each focus group, the 

facilitators introduced discussion topics to discover how program 

managers define success, as well as what they are accountable for and 

how they are held accountable. In addition, participants were asked to 

discuss how program managers are supported and what obstacles they 

encounter in performing their duties.

We analyzed the content of focus group transcripts and used the themes 

we identified to design a survey to gather information about acquisition 

category I and II program managers’ perceptions about factors that assist 

or block their success and to more clearly define other issues in the DOD 

acquisition process that affect program manager effectiveness. We elicited

input from several experts–retired program managers, active-duty 

members with program management experience, and senior acquisition 

officials who reviewed the questions and provided feedback on the draft 

survey. 

We pretested the survey with five program managers. During the pretest 

we asked the program managers questions to determine whether (1) the 

survey questions were clear, (2) the terms used were precise, (3) the 

questionnaire placed an undue burden on the respondents, and (4) the 

questions were unbiased. We then incorporated their comments into the 

survey, finalized the questions, and sent the web-based survey to 

acquisition category I and II program managers. We selected the category I 

and II program managers because they manage the more complex and 

expensive programs. We identified the program managers through 

consultation with each of the services. The survey consisted of openPage 19 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

ended and close-ended questions concerning support for program 

managers and how they are held accountable for program outcomes. 

Originally we e-mailed 237 program managers but later determined that 

52 should not be included because they managed programs other than 

acquisition category I and II. Of the 185 remaining program managers, we 

received completed surveys from 69 percent. 

The surveys were conducted using self-administered electronic 

questionnaires posted on the World Wide Web. We sent e-mail 

notifications to all acquisition category I and II program managers on 

April 12, 2005. We then sent each potential respondent a unique password 

and username by e-mail to ensure that only members of the target 

population could participate in the survey. To encourage respondents to 

complete the questionnaire, we began sending e-mail messages to prompt 

each nonrespondent between April 26, 2005 and May 19, 2005. 

Additionally, the team contacted nonrespondents through telephone calls 

between May 31, 2005 and July 12, 2005. We closed the survey on July 19, 

2005. 

In this report we discuss some of the results obtained from the survey. A 

more complete tabulation of survey questions together with tables 

indicating the levels of response can be found on our Web site at 

GAO-06-112SP. The survey contained close-ended questions and openended questions. We conducted a content analysis of the open-ended 

questions and constructed tables showing the results of the analysis 

arranged into broad categories. Some of the respondents to our survey 

provided more than one answer to the open-ended questions. All 

responses that indicated equally important factors were tabulated in the 

appropriate categories. However, because some respondents provided 

more than one answer, the percentages may add up to more than 

100 percent of respondents. The web-based report does not contain all the 

results from the survey. For example, we do not report responses for 

questions about demographics, some open-ended questions, or questions 

with high item nonresponse rates. 

In addition to the focus groups and survey, we conducted in-depth 

interviews with individual program managers, program executive officers 

from across the services, as well as program managers from Boeing and 

Lockheed Martin for two major weapon systems. To further assess the 

conditions and environment program managers were operating in, we 

relied on previous GAO reports. For example, we relied on a recent study 

of space acquisition problems that incorporated interviews of more than 

40 individuals, including experienced program managers, program 

Page 20 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 1: Introduction 

executive officials, officials responsible for science and technology 

activities, and former and current officials within the Office of Secretary of

Defense who have specific responsibility for space system oversight or 

more general weapon system oversight. 

To further determine relevant DOD policies and practices, we analyzed 

documents describing the roles and responsibilities of program managers, 

acquisition force career management, promotion rates, performance 

reporting, and training requirements. Moreover, we analyzed relevant 

legislation and the DOD 5000 series of directives and instructions. We also

interviewed career acquisition service officials, Defense Acquisition 

University course managers, and the Director of Training. We reviewed 

studies from the Rand Corporation, the Center for Strategic and 

International Studies, and the Defense Science Board, among others, on 

weapons system program management and acquisition issues as well as 

studies performed by past commissions focused on acquisition reform. 

We conducted our review between April 2004 and November 2005 in

accordance with generally accepted government auditing standards. 

Page 21 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 2: Senior Leader Support and 

Disciplined Knowledge-Based Processes Are 

Critical Enablers for Program Managers 

Page 22 GAO-06-110 Weapon Program Managers Best Practices 

Chapter 2: Senior Leader Support and 

Disciplined Knowledge-Based Processes Are 

Critical Enablers for Program Managers 

Program managers from the leading companies we spoke with believed 

that two critical enablers—(1) support from top leadership and 

(2) disciplined, knowledge-based processes for strategic investment, 

program selection, and product development execution—empowered 

them to succeed in delivering new products when needed within cost, 

quality, and performance targets originally set by the company. At all of 

the companies we visited, corporate leadership began at a strategic level,

long before the initiation of a new product development, with senior 

company leaders making critical strategic investment decisions about the 

firm’s mix of products and the return on investment they may yield. Once 

high-level investment decisions were made, senior leaders assured that 

new programs did not begin until there was a business case for them—

meaning there was assurance that the program fit in with the corporation’s 

goals and investment strategy and that there were resources available to 

execute the program. Once a business case had been made, senior leaders 

selected and tasked program managers with executing the program. They

also required the program managers to use a knowledge-based product 

development process that demanded appropriate demonstrations of 

technology, designs, and processes at critical junctures. They also 

empowered program managers as appropriate to execute the program and 

held them accountable for delivering the program within estimates. While 

they were empowered to execute the program, program managers were 

still supported by senior leaders, who encouraged open and honest 

communication and continually assured that the right levels of resources 

and management attention were available for the project. Figure 1 maps 

critical support and accountability factors. 
Chapter 2: Senior Leader Support and 

Disciplined Knowledge-Based Processes Are 

Critical Enablers for Program Managers 

Figure 1: Critical Support and Accountability Factors 

Measure results and hold

program manager accountable

Encourage open and

honest communication

Empower

program manager

to make tradeoffs

Train and mentor

program managers

Develop long-term vision and

investment strategy

Senior leadership

Develop the business

case, assign to a

program manager

Program start

Program manager stays through execution

Concept development

Strategic support Tactical support

Design Production

Knowledge-based process is 

followed. Information on cost, 

schedule, design, and production 

maturity is demanded throughout.

Gap between resources and 

requirements is closed.

Source: GAO.

At each of the companies we visited, senior leaders invested a great deal of 

time and effort positioning new development efforts for success. Before 

even considering initiating a new project, senior leaders made high level 

trade-off decisions between their long-term corporate goals, projected 

resources, market needs, and alternative ways of meeting those needs. 

These efforts culminated in investment strategies that assured that the 

company could fully commit to any product development effort it pursued. 

With a broad strategy in place, senior leaders would then begin concept 

development for potential new products, analyzing proposed products in 

terms of what requirements could be achieved today versus future 

versions of the product and what resources would be needed—not just in 

terms of cost, but in terms of technologies, time, and people. Once a 

specific concept was selected, senior leaders would follow rigorous 

systems engineering processes to narrow the gap between requirements 

and resources to a point where they were assured that they were pursuing 

a product that would meet market needs and could be developed within 

cost and schedule goals. The end point of this process was a sound 

business case that senior leaders could then hand off to a program 

Senior Leadership 

Provides Program 

Managers with a 

Strong Foundation for 

Success

Page 23 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 2: Senior Leader Support and 

Disciplined Knowledge-Based Processes Are 

Critical Enablers for Program Managers 

manager—who was then empowered to deliver the product on time and 

within cost. Program managers themselves highly valued this support 

because it ensured the companies were committed to their particular 

efforts, reduced the level of unknowns that they were facing, and kept 

them focused solely on executing their programs. Put more simply, they 

believed senior leaders consistently provided a sound foundation on which 

they could launch their programs. 

The most critical characteristics of the strategic leadership provided 

include the following: 

• Investment strategies. Because there are more product ideas than there is

funding to pursue them, the commercial companies we visited used a 

knowledge-based process to make decisions about which product 

development efforts to invest in. They began by developing an investment 

strategy that supports a corporate vision. For the most profitable mix of 

new products, companies analyzed factors such as customer needs, 

available technology, and available resources. Companies ensured that 

decisions to start new product developments fit within the investment 

strategy. The investment strategy determined project priority as well as 

providing a basis for trade-off decisions against competing projects. 

Program managers found their company’s use of investment strategies 

helpful because it gave them confidence that their project had 

commitment from their organization and from their top leaders and 

managers and clearly identified where their project stood within the 

company’s overall investment portfolio and funding priorities. 

• Evolutionary development. All of the companies generally followed an 

evolutionary path toward meeting market needs rather than attempting to 

satisfy all needs in a single step. In effect, the companies evolved products, 

continuously improving their performance as new technologies and 

methods allow. These evolutionary improvements to products eventually

result in full desired capability, but in multiple steps, delivering enhanced 

capability to the customer more quickly through a series of interim 

products. For example, the 2005 Avalon involved redesign of about 60 per

cent of the vehicle, but component sections such as the electronics and 

such features as the keyless ignition system and the reclining rear seat 

were either developed by suppliers or had been used on the Lexus. By 

using this method, the company changed the Avalon’s overall design and 

functionality by increments. In more strategic investment planning, Toyota

maintains an ongoing research into such technology areas as alternative

fueled automobiles and environmental implications of automotive 

developments that will feed into its long-term planning. Our previous work 

has found that this approach reduces the amount of risk in the 

Page 24 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 2: Senior Leader Support and 

Disciplined Knowledge-Based Processes Are 

Critical Enablers for Program Managers 

development of each increment, facilitating greater success in meeting 

cost, schedule, and performance requirements. The approach permits 

program managers to focus more on design and manufacturing with a 

limited array of new content and technologies in a program. It also ensures 

that the company has the requisite knowledge for a product’s design 

before investing in the development of manufacturing processes and 

facilities. Conversely, our past work has found that organizations that set 

exceedingly high technology advancement goals invariably spend more 

time and money than anticipated trying to address technology-related 

challenges amid other product development activities, including design 

and production stabilization. 

• Matching of Requirements and Resources. The companies we visited were 

able to achieve their overall investment goals by matching requirements to 

resources—that is time, money, technology, and people—before 

undertaking a new development effort. Any gaps that existed were 

relatively small, and it was the program manager’s job to quickly close 

them as development began. More specifically: 

• The companies had already extensively researched and defined 

requirements to ensure that they are achievable given available 

resources before initiating new efforts. 

• Technologies were mature at the start of a program, that is, they had 

been proven to work as intended. More ambitious technology 

development efforts were assigned to corporate research departments 

until they were ready to be added to future generations (increments) of 

the product. In rare instances when less mature technologies were 

being pursued, the company accepted the additional risk and planned 

for it. 

• Companies committed to fully fund projects before they began. Not 

one of the program managers we spoke with mentioned funding as a 

problem at the beginning of a development effort and throughout. 

Funding was a given once senior leaders had committed to their 

project. 

• Systems engineering was typically used to close gaps between

resources and requirements before launching the development process. 

As our previous work has shown, requirements analysis, the first phase 

of any robust systems engineering regimen, is a process that enables 

the product developer to translate customer wants into specific 

product features for which requisite technological, software, 

engineering, and production capabilities can be identified. Once these 

Page 25 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 2: Senior Leader Support and 

Disciplined Knowledge-Based Processes Are 

Critical Enablers for Program Managers 

are identified, a developer can assess its own capabilities to determine 

if gaps exist, and then analyze and resolve them through investments, 

alternate designs, and, ultimately, trade-offs. The companies we visited 

allowed their engineers to analyze and weigh-in on the customers 

needs as determined by its marketers. 

Our previous best practice work has consistently found the practice of 

matching requirements and resources prior to initiating a new program to 

be a hallmark for successful companies. Simply put, we have found that 

when wants and resources are matched before a product development is 

started, the development is more likely to meet performance, cost, and

schedule objectives. When this match does not take place at the start of a 

program, programs typically encounter problems such as increased costs, 

schedule delays, and performance shortfalls as they try to meet 

requirements during product development. Program managers we spoke 

with for this review specifically cited this process as an enabler for their 

own success because it ensured they were in a good position to commit to 

cost and schedule estimates that were attainable, and it did not require 

them to perform “heroic” efforts to overcome problems resulting from 

large gaps between wants and resources, such as technology challenges or

funding shortages. 

In addition to these critical strategic enablers, program managers at the 

companies also stated that senior leaders made concerted efforts to match 

program manager skills and experience to appropriate projects and to 

train and mentor program managers. In selecting program managers 

themselves, the companies placed high value on strong leadership 

qualities, including decision making skills, diplomacy, communication 

skills, ability to motivate others, and integrity, as well as how individual 

personalities fit with the job or team. Most of the program managers we 

spoke with had been groomed for their positions through formal training 

on budgeting, scheduling, and regulatory compliance and other aspects of 

program management; informal mentoring by senior executives or 

experienced program managers; and by being placed in positions that 

gradually increased their management responsibilities. In addition, many 

of the program managers we spoke with also possessed considerable 

technical experience. In fact, they often started at the company as 

engineers. The companies we visited were similarly deliberate in 

developing and deploying teams of functional experts to support a 

program manager. In some cases, the teams reported directly to the 

program manager. In others, they reported to their respective home units 

and worked collaboratively with the program managers. In either case, the 

program managers themselves valued the support they were getting from 

Page 26 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 2: Senior Leader Support and 

Disciplined Knowledge-Based Processes Are 

Critical Enablers for Program Managers 

these teams—particularly because they enabled the program manager to 

employ a broad array of expertise from day-one of the development effort 

and to facilitate an exchange of ideas. The program managers we spoke 

with believed that their functional teams were also highly skilled—to the 

point where they could easily delegate major tasks. 

Strategic leadership for the development of Toyota’s Avalon luxury sedan 

ties back to conscious decisions made by senior leaders in Japan when 

they built a Toyota facility in the United States 25 years ago. To assure that 

the vehicles could be made to the same levels of quality as those in Japan,

Toyota replicated its manufacturing facilities, used Japanese suppliers, 

and sent its managers to the United States to supervise development. As 

U.S. employees gained experience and demonstrated their capability, the 

reliance on Japanese suppliers and personnel gradually decreased. A 

second step Toyota took was to replicate its training and mentoring of 

program managers—pairing them with more experienced chief engineers, 

who oversee long-term planning across projects, and even bringing them 

to Japan to study how Toyota approached development. 

To support all of its new development efforts, senior leaders have 

developed an overall strategic plan—which takes a long- and short-term 

investment perspective. Over the long run, the plan envisions the company 

achieving significant advancements in capabilities, such as alternatively

fueled engines, through incremental improvements to technologies. Over 

the short run, a specific vehicle development program uses a marketing 

analysis about features customers desire in new models; and the staff 

determines whether a market exists for a certain type of product at a

certain price. In establishing a business case for the Avalon, Toyota 

embarked on a formal concept development effort, which was led by a 

chief engineer. The chief engineer, a high-level executive, was largely 

responsible for setting the vision for the new Avalon, securing resources 

needed for development effort prior to initiating the development 

program, and working with representatives from its sales division to make 

sure that the design and technologies being pursued still fit within market 

needs—not just in terms of cost, but in terms of vehicle features. A variety

of functional experts were consulted during this phase, though the chief 

engineer had the most formal authority over concept development. At the 

conclusion of this effort, Toyota decided to take on a very extensive 

redesign of the Avalon but also set a goal bringing the vehicle to market in 

only 18 months. Redesign features included a reinforced body, 

improvements to the engine and to the braking system, as well as features 

customers desired such as a keyless ignition system and reclining rear 

Strategic Leadership at 

Toyota and Siemens 

Medical 

Page 27 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 2: Senior Leader Support and 

Disciplined Knowledge-Based Processes Are 

Critical Enablers for Program Managers 

seats. Toyota leadership also decided to include mature technologies, 

often borrowed from other vehicle lines, or purchased from outsider 

suppliers. Once the design was approved, day to day project management 

shifted to the Chief Production Engineer, whose responsibility it was to 

see the vehicle through production to distribution. 

Figure 2: 2005 Toyota Avalon

Corporate leadership at Siemens Medical took a similar shape in the 

development of new medical equipment. For example, senior leaders 

developed an overall investment strategy, based largely on researching 

their customers’ technology needs as well as their own technology 

readiness, the direction their competitors were going in, economic trends, 

and projected manpower resources. From these assessments, a team 

within Siemens developed a portfolio of potential new projects to pursue, 

which upper management then prioritized based on their potential profit, 

how they fit in with corporate goals and projected resources. Ultimately, 

senior leaders produce a short-term (1 year) investment plan as well as a 

longer-term (3 to 5 year) plan. Once a specific project is selected, Siemens 

employs systems engineering practices to narrow down the gap between 

customer requirements and resources—working with both business and 

technical managers. A “product manager” is charged with making tradeoffs between requirements, schedule, and cost prior to initiating product 

development and is held accountable for systems engineering decisions 

made to level requirements with resources for the business case. This 

Source: Toyota Motor Manufacturing North America.

Page 28 GAO-06-110 Weapon Program Managers Best Practices 
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person sits at a relatively high level within the company and possesses 

marketing and business expertise. A “project manager” who reports to the 

product manager is ultimately assigned to execute the business case, but 

he or she plays a role in the concept development by participating in tradeoff decisions and raising concerns about how decisions can be executed.

At Siemens Medical, many project managers begin by serving as the 

technical leader working with three to five people in systems engineering 

or another technical area of a project. As the technical team lead, they gain 

experience with scheduling, communicating, and managing people. Over 

time the individual is given more responsibilities such as becoming a 

subsystem project leader; as the manager gains experience, he or she 

transitions to handling cross-functional areas including business, 

budgeting, staffing, technology, and testing. 

Siemens Medical project managers are also given formal training, 

including courses on regulatory and quality requirements as well as 

courses that help program managers learn about their management styles. 

In addition, Siemens ensures that project managers are well-trained on 

risk management so that they can identify and mitigate potential risks at 

the beginning of the project. Also, since project managers function within 

a centralized project management department, they are mentored both by

the head of the department and by their peers. 

Page 29 GAO-06-110 Weapon Program Managers Best Practices 
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Figure 3: Siemens Bi-Plane AXIOM Artis 

Once a new development effort began, program managers were 

empowered to execute the business case and were held accountable for 

doing so. At all of the companies we visited, program managers believed 

that following a disciplined, knowledge-based development process and 

continued support from senior leaders were essential to their success. The 

process itself was typically characterized by a series of gates or milestone 

decisions, which demanded programs assess readiness and remaining risk 

within key sectors of the program as well as overall cost and schedule 

issues, and it required go/no-go decisions to be made fairly quickly. The 

most important aspect of the process, in the view of the program 

managers, was that it empowered them to make decisions about design 

and manufacturing trade-offs, supplier base, staffing on the program team, 

etc.—as long as they were within the parameters of the original business 

case. At the same time, the process held program managers accountable 

and set clear goals and incentives. 

Source: SMS-AX copyright August 2005, Siemens Medical Solutions, Inc.

Knowledge-Based 

Process Followed to 

Execute Programs 

Page 30 GAO-06-110 Weapon Program Managers Best Practices 
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Disciplined Knowledge-Based Processes Are 

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Common critical characteristics of the knowledge-based process followed 

to execute programs include the following: 

• Knowledge-driven development decisions. Once a new product 

development began, program managers and senior leaders used 

quantifiable data and demonstrable knowledge to make go/no-go 

decisions. These covered critical facets of the program such as cost, 

schedule, technology readiness, design readiness, production readiness, 

and relationships with suppliers. Development was not allowed to proceed 

until certain thresholds were met, for example, a high proportion of 

engineering drawings completed or production processes under statistical 

control. Program managers themselves placed high value on these 

requirements, as it ensured they were well positioned to move into 

subsequent phases and were less likely to encounter disruptive problems. 

• Empowerment for program managers to make decisions. At all the 

companies we visited, program managers were empowered to make 

decisions on the direction of the program and to resolve problems and 

implement solutions. They could make trade-offs among schedule, cost, 

and performance features, as long as they stayed within the confines of the 

original business case. When the business case changed, senior leaders 

were brought in for consultation—at this point, they could become 

responsible for trade-off decisions. 

• Accountability. Program managers at all the companies we visited were 

held accountable for their choices. Sometimes this accountability was 

shared with the program team and/or senior leaders. Sometimes, it resided

solely with the program manager on the belief that company had provided

the necessary levels of support. In all cases, the process itself clearly 

spelled out what the program manager was accountable for—the specific 

cost, performance, schedule, and other goals that needed to be achieved.

• Tenure. To further ensure accountability, program managers were also 

required to stay with a project to its end. Sometimes senior leaders were 

also required to stay. At the same time, program managers were 

incentivized to succeed. If they met or exceeded their goals, they received 

substantial bonuses and/or salary increases. Awards could also be 

obtained if the company as a whole met larger objectives. In all cases, 

companies refrained from removing a program manager in the midst of a 

program. Instead, they chose first to assess whether more support was 

needed in terms of resources for the program or support and training for 

the program manager. 

Page 31 GAO-06-110 Weapon Program Managers Best Practices 
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Other important aspects within the development process included the 

following: 

• Common templates and tools to support data gathering and analysis. 

These tools included databases of demonstrated, historical cost, schedule,

quality, test, and performance data that helped program managers produce 

metrics as well as standard forms and guidance for conducting the 

meetings. Program managers valued these tools because they greatly 

reduced the time needed to prepare for milestone meetings. In all cases, 

program managers did not believe they were spending time collecting data

that was valuable to senior management but not to them. 

• Common processes that supported product development. The companies 

generally found that requiring program managers to employ similar risk 

management, project management, requirements approval, testing, quality

management, problem resolution, and other processes enabled them to 

add additional discipline and consistency to product development. Some 

companies were certified by professional organizations as achieving the 

highest level of proficiency within supporting development processes. For 

example, Motorola was certified as a level 5 software development 

organization by Carnegie Mellon’s Software Engineering Institute. 

• Lessons learned. All of the companies we visited continually refined and 

enhanced their development process via some sort of lessons-learned 

process. The program managers themselves placed a great deal of value on

these processes—as they were seen as the primary means for learning 

how to tailor the process to better fit a project and to prevent the same 

mistakes from recurring. 

Program managers also cited flexibility as an enabling quality of their 

processes. All of the companies allowed their processes to be tailored as 

needed. Milestones that were deemed unnecessary could be dropped. 

More often, however, additional meetings were added to gain consensus 

on how to address particular problems. Another enabling factor was that 

their processes ensured decisionmakers were not flooded with data. 

Often, program teams boiled down data into one or two pages, using 

simple metrics depicting status and risk on critical facets of the program 

such as cost, schedule, technology readiness, design readiness, and 

production readiness. Program managers valued the process of translating 

detailed data into higher level metrics because it required them to think 

about their programs in more strategic terms and focus on the highest 

problem areas. 

Page 32 GAO-06-110 Weapon Program Managers Best Practices 
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Motorola’s development process is comprised of 16 milestones or 

“gates”—the first five of which pertain to processes employed to develop a 

product concept and the business case. Eleven gates comprise the 

execution of the business case, from project initiation, to systems 

requirements definition, design readiness, testing, controlled introduction,

and then full deployment. Each gate demands an array of indicators on 

status and progress, including resources, cost, scope, risk, and schedule. A 

centralized database helps program managers produce this data and 

allows users to obtain data at any time and at any level of detail that they

need. For meetings themselves, program managers are required to 

produce a set of “vital few” performance measures relating to cost, quality,

program status, and customer satisfaction. At the gates themselves, 

program managers discuss the status of the program with senior leaders, 

but they are ultimately responsible for making decisions on whether to 

proceed to the next phase. In the past, program managers did not have this 

responsibility and acted more as an administrator than a leader, according 

to senior executives. With less responsibility and accountability, programs 

were not managed as well—often employing disjointed management 

processes with less attention to efficiency and effectiveness. By increasing 

program manager’s ownership and accountability over the project, senior

leaders found that they were more incentivized to meet and exceed cost,

schedule, and performance goals. To support this change, the company 

also adopted common supporting processes, including configuration 

management, design, training, testing, defect prevention, quality 

management, supplier management, and system upgrades. The common 

processes assured program managers employed the same set of quality 

controls and that deployed tools and guidance enabled program managers 

to reduce cycle times as well as to produce better and more consistent 

management data. 

Toyota’s process is comprised of eight key milestones—starting with a 

lessons-learned gate. At this point, senior leaders and project teams 

formally review what worked well and not so-well in the prior

development effort and assess whether the process needs to be tailored as

a result. The Avalon program manager told us that these “reflections” are 

not taken lightly; they are developed through a very detailed and 

soul-searching process during which people have to openly admit errors 

and inadequacies so that better processes and procedures can be devised.

The next gate, “image” represents the process by which the chief engineer

derives the business case. Once he is done, direct supervision of the 

project is transferred to a “chief production engineer,” who is charged 

with its execution of the business case although the chief engineer 

continues to be involved in the development. The next few milestones 

Knowledge-Based 

Development at Motorola 

and Toyota 

Page 33 GAO-06-110 Weapon Program Managers Best Practices 
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Disciplined Knowledge-Based Processes Are 

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come as the car is designed, prototyped, tested, and put through quality 

assurance. The last milestone, the production stage also contains a 

customer feedback phase, which is used to refine the next development 

effort. 

Within the business case itself, Toyota places highest importance on 

schedule because a number other vehicle development efforts are 

dependent on the same resources and staff being used by the current 

effort. As a result, the chief production engineer is more inclined to make 

trade-offs that favor schedule over other factors. At each milestone 

meeting, the chief production engineer reviews the status of the program 

with senior leaders, focusing first on what problems are occurring and 

what his solutions are for overcoming them. The meeting itself employs 

streamlined reporting with simple indicators of remaining risk on critical 

facets of the program—specifically, a circle, meaning low remaining risk 

and okay to proceed; a triangle, meaning there are problems but they can 

be fixed, or an “x,” meaning there is a problem without a solution. The 

chief production engineer is responsible for making decisions as to how to 

proceed at these milestones, unless there is a problem that significantly 

affects the business case. If so, senior leaders become more involved in

the decision-making rather than simply advising the chief production 

engineer. 

While the Toyota process only employs eight formal milestones, the chief 

production engineer actually involves functional experts, senior 

executives, and other stakeholders in frequent meetings to make tactical 

decisions about the program. For example, the Avalon chief production 

engineer told us that he held “obeya” (literally “big room,” signifying that

all inputs are desired) meetings twice a week, which involved all 

functional areas as well as “namewashi” (literally binding the roots 

together, signifying gathering facts and moving toward a decision) 

meetings before a formal milestone meeting—at which functional officials 

consulted with each other to identify problems and develop potential 

solutions that would be presented to senior leaders at the milestone. 

Overall, the accountability for meeting the Avalon program’s goals was 

shared between the chief production engineer, the functional team, and 

senior executives. At Toyota, senior leaders assume that the processes 

they have in place will work, and if the process is not delivering a suitable

quality outcome, then it was the shared responsibility of managers and 

staff to resolve the issue. If performance issues arose, senior leaders 

attempted to address them first through training, mentoring, and 

additional support, rather than removing the program manager. 

Page 34 GAO-06-110 Weapon Program Managers Best Practices 
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Empowering program managers to make decisions in executing the 

business case was seen as the most significant type of support provided by 

senior leaders. But program managers themselves pointed to other types 

of support that made it easier for them to succeed. Primarily, senior 

leaders did the following: 

• Provided unwavering commitment to the development effort. At all the 

firms we visited, senior leaders were champions of the project throughout 

its life and fully committed to supporting it. When significant problems 

arose that jeopardized the business case, they found ways to address those 

problems, rather than rejecting the program in favor of another one. 

Continued Senior 

Leadership during 

Product Development 

Further Enabled 

Success

• Trusted their program managers. Senior leaders trusted the information 

being provided by the program manager as well as his or her expertise. 

This reduced the need for instilling additional layers of oversight that 

could slow down the program. At the same time, however, senior leaders 

took personal responsibility for assuring their program managers had the 

knowledge and capability needed to succeed—in some cases, by 

personally mentoring them for a long period of time. 

• Encouraged program managers to share bad news. Senior leaders went 

out of their way to encourage program managers to share problems. In 

fact, program managers were often expected to discuss problems before 

anything else at key milestones. And, in some cases, program managers 

were evaluated based on their ability to identify and share problems. At 

the same time, senior leaders expected their program managers to come 

up with solutions—to take ownership over their efforts. 

• Encouraged collaboration and communication. Senior leaders spent a 

great deal of time breaking down stovepipes and other barriers to sharing 

information. The Avalon chief production engineer, in fact, told us that 

Toyota’s development processes alone were much like other automobile 

manufacturers he had worked for. What separated Toyota from the others 

was its emphasis on open information exchange, cooperation, and 

collaboration. He believed that this was the key enabler for Toyota’s 

superior systems integration. 

Page 35 GAO-06-110 Weapon Program Managers Best Practices 
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Figure 4: Best Practice Roles, Responsibilities, and Behaviors of Senior Managers 

·

·

·

·

·

·

·

·

Senior management must strongly commit to new products and product 

development.

New product metrics (e.g., percentage of sales or profits) should be an explicit 

part of senior management’s personal and annual objectives.

Senior management must understand the new product development process and 

particularly their own role and responsibilities in the process.

Senior management ideally should be engaged in the design of the organization’s

new product process.

Senior management must provide strong support, empowerment, and authority to 

the people working on new product projects.

Senior management should be involved in go/no go and spending decisions for 

new products.

Senior management should insist on measuring new product results each year 

(e.g., percentage of sales or profits achieved, percentage of success compared to 

failures, and on-time performance).

Senior management should not micromanage new product projects and leave the 

day-to-day activities and decisions in a new product project to the project’s leader 

and team.

Source: Improving New Product Development Performance and Practices. APQC copyright 2003.

Page 36 GAO-06-110 Weapon Program Managers Best Practices 
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Program Managers Effectively

Page 37 GAO-06-110 Weapon Program Managers Best Practices 

Chapter 3: DOD Is Not Supporting Its 

Program Managers Effectively 

While DOD’s leadership has taken action in recent years it hopes will 

better position programs and improve planning and budgeting, it is still not 

effectively positioning or supporting program managers for success. For 

example, rather than making strategic investment decisions, DOD starts

more programs than it can afford and rarely prioritizes them for funding 

purposes. The result is a competition for funds that creates pressures to 

produce optimistic cost and schedule estimates and to overpromise 

capability. Moreover, our work has shown that DOD often starts programs 

without establishing a business case. Specifically, technologies are not 

always mature at start, requirements are not fully defined, and cost and 

schedule estimates are not always realistic. In addition, program managers 

are not empowered to execute programs. They cannot veto requirements 

and they do not control funding or other resources. In fact, program 

managers who responded to our survey personally consider requirements 

and funding instability to be their biggest obstacles to success. Program 

managers also believe that they are not sufficiently supported once 

programs begin. In particular, they believe that program decisions are 

based on funding needs of other programs rather than demonstrable 

knowledge; they lack tools needed to enable them to provide leadership 

consistent with cost, schedule and performance information; they are not 

trusted; they are not encouraged to share bad news; and they must 

continually advocate for their programs in order to sustain commitment. 
Chapter 3: DOD Is Not Supporting Its 

Program Managers Effectively

Figure 5: Breakdowns in Support and Accountability Factors

Sustained support from senior

leadership is sporadic

Little accountability.

Programs are allowed to

incur significant delays

and cost increases and

to be continually

rebaselined

Evolutionary development

adopted in policy, but

programs are still pursuing

significant capability leaps

No short- or long-term

investment strategy

Senior leadership

Program start

Program manager does not stay through execution

Concept development

Less tactical support

Design Production

Knowledge-based process is 

encouraged but not followed. DOD 

lacks management controls to 

enforce process. Program managers 

incentivized to suppress bad news.

Policy encourages gaps between 

resources and requirements to be 

closed. But programs often move 

forward with unstable 

requirements and technology.

Source: GAO.

Less strategic support

According to program managers we interviewed as well as comments to 

our survey and our past reviews, senior leadership within DOD does not 

provide a strong foundation for success. While DOD is adept at developing 

long-term visions and strategic plans, it does not develop realistic, 

integrated investment strategies for weapons acquisitions to carry out 

these plans. Instead, more programs are started than can be funded and 

too many programs must compete for funding, which, in turn, creates 

incentives to produce overly optimistic estimates and to overpromise 

capability. Moreover, when faced with a lower budget, program managers 

believe that senior executives within the Office of the Secretary of Defense 

(OSD) and the services would rather make across-the-board cuts to a span 

of programs rather than hard decisions as to which ones to keep and

which ones to cancel or cut back. Our work continues to show that, while 

DOD has adopted evolutionary development in its policies, programs are 

being encouraged to pursue significant leaps in capability. In addition, 

DOD’s policy now encourages programs to match resources to 

Senior Leadership 

Does Not Provide a 

Strong Foundation for 

Success

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requirements before program initiation, but program managers reported in 

our survey that requirements and funding are not stabilized and were the 

biggest obstacles to their success. Further, while program managers 

believe their training has been adequate, they also believe that mentoring 

has been uneven and that they could benefit with tours of duty inside the 

Pentagon, for example, in offices that oversee budget or financial 

management. Table 2 highlights differences between strategic senior 

leadership support within the commercial companies we visited and DOD. 

Table 2: Are Best Practices Present in DOD?

Best practices DOD 

Develop long-term vision 

and investment strategy 

DOD has long-term vision, but not an investment strategy. 

Lack of investment strategy has created competition for 

funding and spurred low cost-estimating, optimistic 

schedules, and suppression of bad news. 

Adopt evolutionary path 

toward meeting customer 

needs 

DOD has adopted evolutionary development in policy but 

not in practice. 

Match requirements and 

resources before starting 

new product development 

DOD has encouraged achieving match in policy but not in 

practice. Requirements are not stable; funding

commitments are not enforced; key technologies are not 

matured before development. Requirements and funding 

are biggest obstacles in view of program managers. 

Source: GAO.

Investment Strategy and 

Evolutionary Development 

DOD is attempting to address some of the problems identified, but it is too 

early to determine how effective its solutions are. For example, it is 

implementing a new requirements setting processes—known as the Joint 

Capabilities Integration and Development System—in an attempt to bring 

more discipline to investment decisions. The system is organized around 

key functional concepts and areas, such as command and control, force

application, battlespace awareness, and focused logistics. For each area, 

boards of high-ranking military and civilian officials identify long-term 

joint needs and make high-level trade-offs on how those needs should be 

met. Once specific programs are proposed, the process is designed to 

encourage a more evolutionary approach by allowing requirements setters 

the flexibility to define requirements in terms of capabilities as well as to 

defer final requirements formulation to later in the development process. 

DOD has also been attempting to implement complementary planning and 

budgeting processes—for example, by asking the military services to plan 

budgets around guidance that takes a joint perspective and by taking a 

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portfolio planning approach. However, there is no evidence to date that

shows these enhancements are providing DOD with a sound investment 

strategy as well as the right controls for enforcing that strategy. 

While some program managers we spoke with believed the process’ focus 

on capabilities versus requirements promised more flexibility, program 

managers comments to our survey show that they also still widely believed 

that they were operating in an environment where there was unfair 

competition for funding. Figure 6 highlights specific views. 

Figure 6: Highlights of Program Manager Comments Regarding Competition for

Funding 

·

·

·

·

·

·

OSD staff has reduced funding without any understanding or appreciation for 

program impacts. It appears that the staff makes arbitrary cuts. 

OSD has a very near-term execution year focus, resulting in great instability. In 

reality, it should provide much more strategic vectors for the Department instead 

of short-term adjustments to fix more tactical-level funding needs. 

My experience is that the [service] and OSD typically cut programs to pay top 

down bills.

There is no such thing as funding stability in DOD. Funding reductions and 

program stretchouts are the norm due to top down fiscal bills that occur during 

the execution year. The Pentagon must pay the bills, therefore it takes funds from 

the programs, thereby contributing to program stretchout, cost increases, 

inefficiencies, etc.

Unstable funding results in pressure to do aggressive things in order to minimize 

the impact of budget cuts on schedule and performance. I believe this has been a

major factor in recent...program execution problems. 

Our product is considered a support function. When funding gets tight, we have 

been considered a bill payer for others, even if it has “broken” our program.

Source: GAO survey.

DOD has also adopted policies that encourage evolutionary development.1

 

However, our reviews continue to find that programs are still pursuing 

 1

 DOD Directive 5000.1, the Defense Acquisition System (May 2003) and DOD Instruction 

5000.2 Operation of the Defense Acquisition System (May 2003). The directive establishes 

evolutionary acquisition strategies as the preferred approach to satisfying DOD’s

operational needs. The directive also requires program managers to provide knowledge 

about key aspects of a system at key points in the acquisition process. The instruction

implements the policy and establishes detailed policy for evolutionary acquisition. 

Page 40 GAO-06-110 Weapon Program Managers Best Practices 
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significant leaps in capabilities. For example, we reported this year2 that 

the Joint Strike Fighter acquisition strategy was striving to achieve the 

ultimate fighter capability within a single product development increment, 

and that it had bypassed early opportunities to trade or defer to later 

increments those features and capabilities that could not be readily met. 

We also testified3

 that while DOD’s space acquisition policy states its 

preference for evolutionary development, programs still attempt to 

achieve significant leaps in one step.

Matching Resources to 

Requirements 

In recent years, DOD has changed its acquisition policy to encourage 

decisionmakers to match requirements to resources before starting a new 

program. For example, the policy specifically encourages that 

technologies be demonstrated in a relevant environment before being 

included in a program; that a full funding commitment be made to a 

program before it is started and that requirements be informed by the 

systems engineering process. Concurrently, DOD’s new requirements 

process is designed to instill more discipline during initial requirements 

development and postpone final determination of requirements to assure 

that requirements being set are achievable. 

In practice, however, our work has shown that there are still significant 

gaps between requirements and technology resources when programs 

begin. Our most recent annual assessment of major weapon systems 

programs,4

 for example, showed that only 15 percent of the programs we 

reviewed began development having demonstrated that all of their 

technologies were mature. More often than not, programs had to worry 

about maturing technologies well into system development, when they 

should have focused on maturing system design and preparing for 

production. These assessments also show that programs that started 

development with mature technologies experienced lower development 

and unit cost increases than those programs that started with immature 

technologies. Table 3 provides some examples. 

 2 Tactical Aircraft: Opportunity to Reduce Risks in the Joint Strike Fighter Program

with Different Acquisition Strategy, GAO-05-271(Washington, D.C.: March 15, 2005). 

3 Space Acquisitions: Stronger Development Practices and Investment Planning Needed

to Address Continuing Problems, GAO-05-891T, (Washington, D.C.: July 12, 2005). 

4 Defense Acquisitions: Assessments of Selected Major Weapon Programs, GAO-05-301 

(Washington, D.C.: March 31, 2005). 

Page 41 GAO-06-110 Weapon Program Managers Best Practices 
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Table 3: Technology Maturity and Program Outcomes

Program 

Percent 

increase 

in R&D (first 

full estimate 

to latest 

estimate) 

Percent of

critical 

technologies and 

associated

maturity level at 

development start

Advanced Threat Infrared 

Countermeasures/Common Missile Warning 

System 5.6 

50 % (3 of 6) at

6 or higher

C-5 Reliability Enhancement and Reengining 

Program 2.1 

100 % (11 of 11) 

at 6 or higher

DD(X) Destroyer 

417.3 

25 % (3 of 12) 

at 6 or higher

Future Combat System 

50.8 

32 % (17of 52)

at 6 or higher

Joint Strike Fighter 

30.1 

25 % (2 of 8) are 

6 or higher

Source: GAO.

Note: Technology readiness level of 7 or higher at program launch is considered best practice; a 

technology readiness level of 6 or higher is DOD standard. 

Although the majority of respondents to our survey believed that the initial 

baselines of their programs were reasonable, a significant group, about 

24 percent of program managers, responded that their program parameters 

were not reasonable at the start and 45 program managers responded that 

their program had been re-baselined one or more times for cost and 

schedule increases; 18 percent said one or more key technologies fell 

below a readiness level of 7, which is proven to work in an operational 

environment. They also noted that the most frequently missing critical skill 

was systems engineering—a key function for matching requirements to the 

technologies needed and for providing reasonable baselines at the 

beginning of development. In addition, in written comments and individual 

interviews, program managers noted pressure to agree to cost 

commitments that could be attained only if programs enjoyed higher-level

support. They also noted that requirements were often not fully defined at

the onset of a program, and many also pointed out that users and 

stakeholders often did not stick to the agreements they made when 

programs were launched, especially if technologies did not mature as 

planned. 

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Figure 7: To What Extent Were the Parameters of Your Program Reasonable at 

Program Start?

0

5

10

15

20

25

30

35

40

Little or no

Some extent

Moderate

Great extent

Very great

Percentage of frequency

Source: GAO survey.

9

37

30

18

6

 extent

 extent

 extent

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Figure 8: How Program Managers Responded to an Open-ended Question on What 

Were the Biggest Obstacles They Faced

0

5

10

15

20

25

30

35

40

Inexperienced

Excessive

Staffing

Requirements

Funding

Percentage of total

Source: GAO survey.

Obstacles

 instability

 instability

 problems

36

13

8

 oversight

 leadership

7 7

Program managers’ views were mixed when it came to whether human 

capital resources were well matched to new programs. They cited major 

improvements in DOD’s training programs and credited cross-functional 

teams as a valuable resource. They also generally believed they personally 

had the right mix of experience and training to do their jobs well. Ninetyfour percent of the program managers responding to our survey reported 

that they had been certified at the highest level for program management 

by DOD’s Defense Acquisition University. More than 80 percent also 

believed they had adequate training in the areas of systems engineering,

business processes, contracting, management, program representation, 

cost control, and planning and budgeting. Slightly less, about 76 percent, 

believed they had enough leadership training. In addition, about 92 percent 

said that they believed that their service consistently assigned people with 

the skills and experience to be effective program managers. 

At the same time, however, program managers comments and interviews 

with program executive officers pointed to critical skill shortages for staff 

that support them—including program management, systems engineering, 

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cost estimating, and software development. Some of these officials 

attributed the shortages to shifts in emphasis from oversight to insight of 

contractor operations. Lastly, in their written comments, about 18 percent 

of program managers who provided written comments cited shortcomings 

in their career path, such as lack of opportunities at the general officer 

level and requirements to move often as a disincentive; 13 percent cited 

the lack of financial incentives. Some program managers also noted that 

DOD loses opportunities to retain valuable experience, merely because 

there are no formal incentives for military officers to stay on as program 

managers after they are eligible for retirement. Civilians in program 

management also cited a lack of career opportunities; one problem cited 

was having to find their next job in contrast to military program managers, 

whose subsequent job is presented to them. 

According to program managers and our past reviews, the execution 

process does not provide adequate support and accountability. In 

particular, knowledge-based development processes are not employed, 

program managers are not empowered to execute, and they are not held 

accountable for delivering programs within targets. 

More specifically, DOD has encouraged following knowledge-based 

development processes in its acquisition policy but not always in practice.

The acquisition process itself mirrors many aspects of the commercial 

companies. For example, it requires a variety of senior, functional, and

program-level personnel to come together, assess progress, identify 

problems, and make go/no-go decisions at key points in development. It 

encourages oversight personnel to base these decisions on quantifiable 

data and demonstrated knowledge. To enhance product development, 

DOD has also been attempting to adopt and improve policies in areas such 

as software development and systems engineering. 

Execution in DOD 

Does Not Provide 

Adequate Support and 

Accountability 

However, program managers who responded to our survey believe that the 

acquisition process does not enable them to succeed because it does not

empower them to make decisions on whether the program is ready to 

proceed forward or even to make relatively small trade-offs between 

resources and requirements as unexpected problems are encountered. 

Program managers assert that they are also not able to make shifts within 

personnel to respond to changes affecting the program. At the same time, 

program managers commented that requirements continue to be added as

the program progresses and funding instability continues throughout. 

These two factors alone cause the greatest disruption to programs, 

according to program managers. Compounding this problem is the fact 

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that because acquisition programs tend to attract funds over other 

activities, including science and technology efforts that ultimately support 

acquisition, program managers are incentivized to take on tasks that really 

should be accomplished within a laboratory environment, where it is 

easier and cheaper to discover and address technical problems. 

With many factors out of their span of control, program managers in our 

focus groups also commented that it was difficult to hold them 

accountable for mistakes. In addition, in their written comments to the 

survey, many program managers expressed frustration with the time 

required of them to answer continual demands for information from 

oversight officials—many of which did not seem to add value. Some 

program managers in fact estimated that they spent more then 50 percent

of their time producing and tailoring and explaining status information to 

others. 

More broadly, in interviews and written comments, many program 

managers and program executive officials said that did not believe that 

DOD’s acquisition process really supported or enabled them. Instead, they 

viewed the process as cumbersome and the information produced as nonstrategic. When strategic plans or useful analyses were produced, they 

were done so apart from the acquisition process. 

Our own reviews have pointed to a number of structural problems with 

the acquisition process.5

 In particular, while DOD’s acquisition policy has 

embraced best practice criteria for making decisions, it does not yet have

the necessary controls to ensure knowledge is used for decision-making 

purposes. As a result, programs can move forward into design, integration, 

and production phases without demonstrating that they are ready to. 

Without a means to ensure programs and senior managers are adhering to

the process, the process itself can become an empty exercise—and, in the 

view of program managers, a time-consuming one. 

Table 4 highlights differences between DOD and commercial knowledgebased development support and accountability factors—collectively from 

the perspective of program managers, our past reports, and observations 

we made during the course of the review. 

 5 Defense Acquisitions: DOD’s Revised Policy Emphasizes Best Practices but More 

Controls Are Needed, GAO-04-53 (Washington, D.C.: Nov. 17, 2003). 

Page 46 GAO-06-110 Weapon Program Managers Best Practices 
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Table 4: Are Best Practices Present in DOD?

Best practices DOD 

Base decisions on quantifiable data and 

demonstrated knowledge 

DOD policy encourages decisions to be 

based on quantifiable data and

demonstrated knowledge, but not 

happening in practice. 

Empower program managers to make 

decisions 

Program managers say they are not 

empowered in the same way as 

commercial companies. They do not 

control resources. They do not have 

authority to move programs to next phases. 

Hold program managers accountable Difficult to enforce accountability. 

Program managers stay through execution Tenure has been lengthened, but program 

managers generally do not stay after 

3 to 4 years. 

Source: GAO.

Data Supporting Oversight 

and Management 

Decisions 

We reported that while DOD’s acquisition policy has embraced best 

practice criteria for making decisions, it does not yet have the necessary 

controls to ensure demonstrable data is used for decision-making 

purposes. We recommended that DOD assure that program launch 

decisions capture knowledge about cost and schedule estimates based on 

analysis from a preliminary design using systems engineering tools. In 

transitioning from system integration to system demonstration, we 

recommended that DOD ensure the capture of knowledge about the 

completion of engineering drawings; completion of subsystem and system 

design reviews; agreement from all stakeholders that the drawings are 

complete; and identification of critical manufacturing processes, among 

other indicators. And in transition to production, we recommended that

DOD capture knowledge about production and availability of

representative prototypes along with statistical process control data. 

We recommended adopting these controls because, in our view, they 

would help set program managers up for success by (1) empowering them 

with demonstrated knowledge as they move toward production and 

(2) bringing accountability to their positions and making the business case 

more understandable. Without these types of controls, the process can 

become an empty and time-consuming exercise in the view of program 

managers. At present, our reports continue to show that programs are 

allowed to proceed without really showing that they are ready to. In our 

most recent annual assessment of major weapon systems, for example, 

only 42 percent of programs had achieved design stability at design review 

and almost none of the programs in production or nearing production 

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planned to assure production reliability through statistical control of key 

processes. 

Our survey also indicated that a relatively small percentage of programs 

used knowledge indicators that successful commercial companies use. For 

example, in responding to our survey, only 32 percent of program 

managers said they used design drawing completion extensively to 

measure design maturity; only 26 percent said they used production 

process controls to a great extent. Even fewer program managers reported 

that their immediate supervisor used these measures extensively to 

evaluate progress. 

In our survey and interviews, program managers and program executive 

officers also frequently commented that they spend too much time 

preparing data for oversight purposes that is not strategic or very useful to

them. In fact, more than 90 percent of survey respondents said that they 

spent either a moderate, great, or very great extent of their time 

representing their program to outsiders and developing and generating 

information about program progress. In addition, program managers told 

us that they do not have standard tools for preparing program-status data. 

Instead, they must hand-tailor data to the requester’s particular demands 

for format and level of detail. The Air Force was cited by some program 

managers as taking initiative in developing a database (known as the 

System Management Analysis Reporting Tool) that could save time in 

answering internal oversight demands for data, but they also wanted to be 

able to use such a tool to answer outside demands. While program 

managers said they were spending a great deal of time reporting on 

program status to outsiders, some program executive officers and program 

managers also commented that they had to separately produce data,

analyses, and strategic plans for their own purposes in order to keep their 

programs on track—the types of plans and analyses that they used were 

simply not called for by the process itself. One program executive officer 

said that he used three documents, the approved program baseline, the 

acquisition strategy, and the test plan to evaluate the program manager’s 

plans—all of these documents and many more are required under current 

acquisition planning—but these were of most significance. In addition the

executive officer held a one-day review per quarter with each program 

manager and reviewed metrics such as earned value, use of award fee, 

contract growth, and schedule variation. 

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In several key areas, program managers said that they do not have the 

necessary authority to overcome obstacles and make trade-offs to achieve 

program goals. About 60 percent of the program managers that responded 

to our survey said that program managers should have more authority to 

manage their programs—particularly when it comes to funding, deciding 

when programs are ready to proceed to the next phase, and shifting staff. 

In interviews and written comments, some program managers commented

that they were seeking the ability to make relatively small trade-offs—for 

example, moving a staff member from one section of a program to another 

and shifting a small amount of funds from procurement accounts to 

research and development accounts, while others advocated for greater

authority, as long as their program stayed on track. In addition, program 

managers often commented that they should have a larger role in 

requirements decisions that are made after a program is started—

specifically, the ability to veto new requirements that would put too much 

strain on the program. A few program managers we interviewed, however, 

believed that they did have sufficient authority and that many program 

managers have not learned how to exercise it or are risk averse. Others 

commented that program managers were simply not allowed by senior 

managers to exercise their authority. At the same time, program executive 

officers, who manage a set of programs, commented in interviews that 

they also lacked authority over simple matters such as moving staff or 

shifting small amounts of funds. Lastly, in our focus groups and in written 

comments, program managers who specifically worked for the Missile 

Defense Agency indicated that they did have authority to make trade-offs 

among cost, schedule, and performance and to set requirements for the 

business case. They found that this authority alone greatly separated their 

current positions from past program manager positions and consistently 

cited it as a major enabler. 

Program Manager 

Authority 

Table 5 shows how program managers answered survey questions 

regarding the types of formal and information authority they have. Figure

9 highlights comments that were provided by program managers. 

Page 49 GAO-06-110 Weapon Program Managers Best Practices 
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Table 5: Program Manager Views on Formal vs. Informal Authority 

In percent 

Type of authority

I have formal 

authoritya

I have informal 

authority

No 

authority

Developing program 

requirements 10 82 7

Changes in program 

requirements 13 85 2

Flexibility within program to 

reallocate funding 81 15 5

Developing technology 42 45 9

Setting testing requirements 48 49 2

Selecting contractor sources 48 33 11

Administering contracts 60 37 3

Addressing difficulties to 

meet requirements 66 31 2

Source: GAO.

a

Note: Numbers may not total 100 percent due to rounding. 

Page 50 GAO-06-110 Weapon Program Managers Best Practices 
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Figure 9: Highlights of Program Manager Comments on What Types of Authority

They Need

·

·

·

·

·

·

·

·

·

·

Program managers need to have more ability to control their funding in order to 

make more efficient system and production trade-offs. Program managers also 

need more ability to work with the warfighter to pursue moderate or even high risk 

strategies when the payoff for the warfighter warrants such a change. Program 

managers also need the ability to directly interface with OSD and with Congress 

and should not be restricted through service staffs in order to facilitate 

communications.

Program managers should be able to select and award most contracts versus 

going to the PEO or service acquisition executive for a decision. 

I believe program managers should be allowed to spend small amounts of 

underrun as they see fit for their program. Too often, any underrun is taken to pay 

for other programs.

[We need] more authority to budget for and manage management reserves. The 

[planning and budgeting] process is too slow to react to new funding requirements 

to mitigate program risks.

In the current environment, we do not control the numbers of military, civilian, or 

contractor personnel that work in the program office. We do not have the authority 

to hire and fire personnel, or to seat personnel in our office space. We do not 

have the authority to get adequate tools for our people to do their work, such as 

computers, printers, copiers, telephones, etc.

Once appropriated by Congress, program managers should have more flexibility 

to transfer between program elements and budget accounts, and also the service 

and major commands should have less ability to remove funds that are being 

properly executed in order to transfer them to other programs.

Program managers should be given authority to move funds between colors of 

money. Colors of money greatly reduce the flexibility that program mangers often 

need to make tradeoffs within their programs.

[We need authority] to be able to fire or replace people immediately or affect their 

bonus.

[We need authority] to give monetary awards to support professionals.

The key is not more authority; it is allowing program managers to fully exercise 

the authority they already have. No program manager minds reasonable 

oversight, but the current level of oversight is unreasonable.

Source: GAO survey.

Accountability Program manager views with regard to accountability are mixed. In our 

interviews and our focus groups, many program managers stated they 

personally held themselves accountable; however, many also commented 

that it is difficult to be accountable when so much is outside their span of 

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control. During our focus groups, program managers cited sporadic 

instances when program managers were removed from their positions or 

forced to retire. They also cited instances when a program manager was 

promoted, even though the program was experiencing difficulties. In their

written comments for our survey, program managers often commented 

that it was a disincentive that senior leaders who were impacting their 

program negatively were not being held accountable. 

We observed some key differences between the commercial companies we 

visited and DOD when it comes to accountability. 

• Commercial companies make it very clear who is accountable on a 

program and for what. Goals that must be achieved are clearly spelled out 

and understood by the entire program team. In DOD, it is not always clear 

who is responsible. Moreover, the expectations set for program managers 

by their supervisors may not necessarily match up with the goals of their 

program—particularly when the program manager is a military officer who 

reports to both a PEO and another commanding official. 

• Program managers and senior managers in the commercial sector are 

required to stay with programs until they are done; at DOD they are not. 

• Program managers in the commercial sector are incentivized to stay with 

programs and be accountable for them—principally through 

empowerment and financial incentives, but also through their desire to 

help the company achieve its goals. At DOD, program managers strongly 

asserted that they are incentivized to help the warfighter, but few said they 

were incentivized by financial or promotion incentives or by 

empowerment. 

In commenting on senior leader support during program execution, 

program managers had mixed views on whether they received sustained 

commitment from their program executive officers, but widely believed 

that they did not receive sustained commitment from other senior leaders 

and stakeholders—unless their programs enjoyed priority and support 

from very high level officials, Congress, or the President. More often than

not, programs struggled to compete for funding and were continually beset 

by changing demands from users. Others noted that while DOD is 

emphasizing jointness in programs more and more, collaboration among 

senior leaders needed to achieve jointness is not always happening. Some

program managers lamented that they felt they were not respected in 

DOD, while others believed their service was taking some positive actions 

Senior Leader 

Support during 

Execution 

Page 52 GAO-06-110 Weapon Program Managers Best Practices 
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to put program managers on a par with military officers in operational 

positions. 

Program managers were also troubled by constant demands for 

information for oversight purposes as well as interruptions from 

stakeholders (for example, in department-wide budget or testing offices) 

that seemed to be non value-added. As we noted earlier, over 90 percent of 

the survey respondents said that they spent either a moderate, great, or 

very great extent of their time representing their program to outsiders and 

developing and generating information about program progress. 

Several program managers also cited reluctance on the part of senior 

managers to hear bad news. Our past reviews have similarly noted that the

overall competition for funding in DOD spurs program managers to 

suppress bad news because it can result in funding cuts. 

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in How Program Managers Are Supported and 

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Page 54 GAO-06-110 Weapon Program Managers Best Practices 

Chapter 4: Basic Incentives Drive Differences 

in How Program Managers Are Supported 

and Held Accountable 

Differences between DOD and leading companies in how program 

managers are supported and held accountable are rooted in differences in 

incentives and resulting behaviors. This begins with the definition of 

success. The commercial firms we studied concluded their survival hinged 

on their ability to increase their market share, which, in turn, meant 

developing higher-quality products, at the lowest possible price, and 

delivering them in a timely fashion—preferably before their competitors 

could do the same. This imperative meant that they had no choice but to 

narrow the gap between requirements and resources in a manner that not 

only ensured they met their market targets, but did so in a manner that 

consumed resources efficiently. It also meant that they had no choice but 

to fully support the development effort, to instill strategic planning and 

prioritization, to work collaboratively, to follow a knowledge-based 

process that makes product development manageable, and ultimately, 

assign accountability to all involved for success or failure. In theory, 

DOD’s success likewise hinges on its ability to deliver high quality 

weapons to the warfighter in a timely fashion. But in practice, the implied 

definition of success is the ability of a program to win support and attract 

funds. Of course, there are reasons for this disconnect. Corporate revenue

is generated by customer sales while DOD’s funding is dependent on 

annual appropriations. Corporations go out of business when their 

product development efforts do not succeed; DOD does not. Selling 

products to customers is the single focus of a private-sector company 

while DOD is charged with a myriad of important missions—each of which 

also competes for budget share. As a result, program managers are 

incentivized to overpromise on performance because it makes their 

program stand out from others. They are incentivized to underestimate 

cost and schedule and to suppress bad news because doing otherwise 

could result in a loss of support and funding and further damage their 

program. In short, unknowns become acceptable and desirable rather than 

unacceptable as they are in the corporate environment. And accountability 

becomes much more difficult to define. 
Chapter 4: Basic Incentives Drive Differences 

in How Program Managers Are Supported and 

Held Accountable 

Figure 10: Key Differences in Definition of Success and Resulting Behaviors 

Success for the commercial world is straightforward and simple: maximize 

profit. In turn, this means selling products to customers at the right price,

right time, and right cost. Each of the commercial companies we visited 

enjoyed success to this end, but at some point in time, as competitors 

made gains, markets tightened, and the pace of technology changes grew

faster, they realized they needed to do more to be successful. Toyota 

decided it needed to expand its role in the world market place and this 

need persisted as competition grew stronger over the years. For Siemens 

this realization came in the 1990s—when Siemens Medical Division took a 

hard look at its profitability for its medical devices and for Motorola in the 

1980’s when it began losing market share for its communication devices. 

To turn themselves around, all three companies chose not to depend on

technology breakthroughs or exotic marketing, but rather to improve their 

position by looking inward at how they approached development. Each 

found that there was room for improvement, starting with corporate 

cultures and ending with processes and controls. In Toyota’s case, 

emphasis was largely placed on collaboration and consistency. In Siemens 

case, emphasis was placed on quality, particularly because its medical 

products come under extensive Food and Drug Administration 

regulations. For Motorola, emphasis was placed on empowerment and 

Means to

success

Success

Commercial companies DOD

Sale to customer.

Strategic planning/prioritizing.

Realism and candor.

Early testing.

Collaboration and trust.

Source: GAO.

Attracting funds.

Competition for funds.

Optimism and unknowns.

Early redlights, greenlights based on 

demonstration.

Single program manager is

accountable for delivery.

Multiple program managers are 

accountable for continuation.

Senior leaders are program 

advocates. Corporate research 

departments are technology 

developers. Program manager is

executor.

Late testing.

Oversight and distrust.

Early greenlights; late redlights.

Program manager is often the 

advocate, technology developer, 

and executor.

Definition of Success 

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in How Program Managers Are Supported and 

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commonality, particularly in the processes that support product 

development like software development. 

At DOD, success is often formally defined in similar terms as the 

commercial world: deliver high quality products to customers (the 

warfighter) at the right time and the right cost. Virtually all program 

managers we spoke with first defined success in terms of enabling 

warfighters and doing so in a timely and cost-efficient manner. But when 

the point was pursued further, it became clear that the implied definition 

for success in DOD is attracting funds for new programs, and keeping 

funds for ongoing programs. Program managers themselves say they spend 

enormous amounts of time retaining support for their efforts and that their 

focus is largely on keeping funds stable. They also observe that DOD starts 

more programs than it can afford to begin with, which merely sets the 

stage for competition and resulting behaviors. As noted earlier, there are 

factors that contribute to how success is defined in practice, including the 

fact that DOD depends on annual appropriations and it must fund a wide 

variety of missions beyond weapon systems development. However, 

according to program managers, the willingness to make trade-off 

decisions alone, would help DOD mitigate these circumstances. 

Regardless of where they placed greatest emphasis, each company we 

studied adopted processes and support mechanisms that emphasized the 

following: 

Means for Success 

• risk reduction, 

• knowledge-based decisionmaking, 

• discipline, 

• collaboration, 

• trust, 

• commitment, 

• consistency,

• realism, and 

• accountability. 

Such characteristics were seen as absolutely essential to gaining strength 

in the market place. With limited opportunities to invest in new product 

development efforts, companies understand it is essential, for example, 

that they know they are pursuing efforts that will optimize profits. 

Therefore, estimates of costs and technology maturity must be accurate 

and they must be used for making decisions. Consistency and discipline 

are integral to assuring that successful efforts can be repeated. Ultimately, 

Page 56 GAO-06-110 Weapon Program Managers Best Practices 
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in How Program Managers Are Supported and 

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these characteristics translate into processes that help companies develop

products quicker, cheaper, and better. At the strategic level, processes 

include accurate, strategic planning and prioritization to ensure the right 

mix of products are pursued; investment strategies that prioritize projects 

for funding; and strong systems engineering to help them establish a 

realistic business case that levels market needs with available resources 

prior to beginning a product development. At the tactical level, this 

includes knowledge-based developments that center on designing and 

manufacturing products that will sell well enough to make an acceptable 

profit. This combination of focused leadership and disciplined processes 

promotes positive behaviors, such as an insistence that technology 

development take place separately from product development programs 

and trade-offs between requirements and resources be made before 

beginning a program; it promotes an atmosphere of early candor and 

openness from everyone as to potential program risks; and underscores 

the need for realistic, knowledge-based cost and schedule estimates to 

support full funding decisions; and the ability to test early, allowing “red 

lights” for problems that must be proven solved before they can be 

changed to “green lights.” 

Once attracting and sustaining funds becomes a part of the definition of 

success, as it is at DOD, different values and behaviors emerge. For 

example, it is not necessarily in a program manager’s interest to develop

accurate estimates of cost, schedule, and technology readiness, because 

honest assessments could result in lost funding. Delayed testing becomes

preferred over early testing since that will keep “bad news” at bay. 

Ultimately, no matter how well-intentioned or what improvements are 

made, DOD’s processes and support mechanisms eventually play into 

funding competition. On paper, the requirements process may emphasize 

realism and the importance of incremental development, but in practice, it 

consistently encourages programs to promise performance features that 

significantly distinguish them from other systems. Likewise, changes may 

be made to make the funding process more strategic, but because there 

are still many programs competing for funds, it encourages cost and 

schedule estimates to be comparatively soft with little benefit from 

systems engineering tradeoffs. By favoring acquisition programs over 

science and technology efforts, the funding process also encourages 

programs to take on technology development that should be carried out in 

research labs. Lastly, the acquisition process may adopt world-class 

criteria for making decisions, but because it is much easier to attract funds 

for a formal weapons program than funds for the exercise of gaining 

knowledge about technologies, the process encourages programs to move 

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in How Program Managers Are Supported and 

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forward despite risks with the assumption that programs can resolve 

technical, design, or production “glitches” later on. Significant unknowns 

are accepted in this environment. Delivering a product late and over cost

does not necessarily threaten program success. The cumulative effect of 

these pressures is unpredictable cost and schedule estimates at the outset

of a program that are breached, sometimes very significantly, by the time 

the weapon system is fielded. 

There are other environmental differences that put additional pressures on 

program managers within DOD. They include layers of internal and 

external oversight that come with DOD’s stewardship responsibilities, 

personnel rules that make it more difficult to manage human capital and

hold people accountable, laws and regulations that place additional 

constraints on an acquisition, and the mere size and scope of DOD, which 

adds significant challenges to communicating and collaborating 

effectively. 

For example, as shown below, commercial companies we visited tended

to have fairly streamlined oversight. No matter what level the program 

manager resided, they had access to top executives who were empowered 

to help them make go/no-go decisions. In addition to this structure, the 

companies were governed by a degree of oversight from shareholders, but 

this was not actualized in day-to-day management of program 

development activities. At DOD, by contrast, program managers operate 

under many layers of oversight—both internally and externally. These 

include Congress, the President, the Secretary of Defense, a myriad of 

functional agencies as well as the military services—all of whom have a 

say in DOD’s overall budget as well as funding for specific programs. 

Moreover, within these confines, leaders at all levels shift frequently. Much

of this oversight is necessary for carrying out stewardship responsibilities 

for public money, but studies conducted by a variety of commissions 

assessing acquisition problems through the years have consistently found 

that there are opportunities to reduce oversight layers and streamline 

oversight processes and protect programs from frequent leadership 

changes. Program managers themselves understood the need for 

oversight, but found that responding to oversight demands was taking too 

much of their time. They also identified opportunities to make it easier to

work within this environment, including development of databases to 

support internal and external oversight requests, empowering program 

managers for more day-to-day decisions, and making stakeholders more 

accountable. 

Other Differences Put 

Additional Pressures 

on DOD Program 

Managers 

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in How Program Managers Are Supported and 

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Figure 11: Commercial vs. DOD Oversight Environments 

Program

manager

Military service

Program

manager

Top executives

OSD agencies

Top OSD officials

External oversight

Includes: Secretary; Under 

Secretary; Comptroller, 

Acquisition Executive, 

Operating Command 

Executive

Includes: Defense Contract 

Audit Agency; Defense 

Contract Management Agency; 

Defense Finance and 

Accounting Service; Defense 

Information Systems Agency; 

Defense Intelligence Agency

Includes: Secretary; Deputy Under 

Secretary; Under Secretary for 

Acquisition Technology and Logistics; 

Comptroller; Assistant Secretary for 

Command, Control Communication and 

Intelligence; Director, Operational Test 

and Evaluation; Assistant Secretary 

(Intelligence Oversight); Inspector 

General; Joint Chiefs of Staff

Includes: White House (OMB), Congress, Government Accountability Office

Includes: CEO, COO, CFO, 

Chief Engineer, and 

sometimes Project Office

Best practices

DOD

Source: GAO.

Program managers also cited several trends that have increased pressures 

that they face. These include DOD’s movement toward developing more 

technical complex families of weapon systems as one package (system of 

systems), which they believe vastly increases management challenges and 

makes it more difficult to oversee contractors and DOD’s reduction in 

acquisition workforces over the past decade, which has made it more 

difficult to carry out day-to-day responsibilities and retain technical and 

business expertise. Overall, however, program managers themselves 

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in How Program Managers Are Supported and 

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consistently attribute their problems to competition for funding over these 

other factors. 

Page 60 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 5: Conclusions and Recommendations

Page 61 GAO-06-110 Weapon Program Managers Best Practices 

Chapter 5: Conclusions and 

Recommendations 

Like the commercial world, DOD has a mandate to deliver high-quality 

products to its customers, at the right time, and the right price. Quality 

and time are especially critical to maintain DOD’s superiority over others, 

to counter quickly changing threats, and to better protect and enable the 

warfighter. Cost is critical given DOD’s stewardship over taxpayer money, 

long-term budget forecasts which indicate that the nation will not be able

to sustain its current level of investment in weapon systems, and DOD’s 

desire to dramatically transform the way it conducts military operations. 

At this time, however, DOD is not positioned to deliver high quality 

products in a timely and cost-efficient fashion. It is not unusual to see cost 

increases that add up to tens of millions of dollars, schedule delays that 

add up to years, and large and expensive programs to be continually 

rebaselined. Recognizing this dilemma, DOD has tried to embrace best 

practices in its policies, instill more discipline in requirements setting, 

strengthen training for program managers and has lengthened program 

manager tenures. It has also reorganized offices that support and oversee 

programs, required programs to use independent cost estimates and 

systems engineering, and it has alternately relaxed and strengthened 

oversight over contractors in an effort to extract better performance from 

them. Yet despite these and many other actions, programs are still running 

over cost and over schedule and, in some cases, changes have merely 

added tasks for program managers while adding no value. 

Our work shows that this condition will likely persist until DOD provides a 

better foundation on which program managers can launch programs and 

more consistent and steadfast support once it commits to programs. At 

the core of this solution is developing and enforcing an investment 

strategy that prioritizes programs based on customer needs and DOD’s 

long term vision and reduces the burden of advocacy on the part of the 

program manager. DOD will always be facing funding uncertainties due to

the environment it operates in. But it has an opportunity to greatly 

mitigate the risks that come with this environment by separating long-term 

wants from needs, matching them up against what technologies are 

available today, tomorrow, and decades from now, as well as being 

realistic in determining what resources can be counted on. Without an 

investment strategy, all other improvements will likely succumb to the 

negative incentives and behaviors that come with continual competition 

for funding. With an investment strategy, senior leaders will be better 

positioned to formally commit to a business case that assures new 

programs fit in with priorities, that they begin with adequate knowledge 

about technology, time, and cost, and that they will follow a knowledgebased approach as they move into design and production. Another core 

enabler for improving program managers’ chances for success lies in 

leadership’s ability to implement evolutionary, incremental acquisition 
Chapter 5: Conclusions and Recommendations

programs that have limited cycle times from beginning to delivery of the 

weapon system. This allows DOD to align program managers’ tenures to 

delivery dates, thereby substantially increasing accountability for 

successful outcomes. 

Once senior leaders do their part—by providing program managers with 

an executable business case and committing their full support to a 

program—they can begin to empower program managers more and hold

them accountable. By embracing a model for supporting program 

managers that incorporates all these elements, DOD can achieve the same 

outcomes for its weapons programs as other high-performing 

organizations. 

We recommend that the Secretary of Defense take the following actions to

ensure program managers are well positioned to successfully execute and 

be held accountable for weapon acquisitions: 

Recommendations for 

Executive Action 

• DOD should develop an investment strategy that, at a minimum, 

• determines the priority order of needed capabilities with a corollary 

assessment of the resources, that is dollars, technologies, time and 

people needed to achieve these capabilities. The remaining capabilities 

should be set out separately as desirable, resources permitting. 

• lays out incremental product development programs for achieving 

desired capabilities, and 

• establishes controls to ensure that requirements, funding, and

acquisition processes will work together so that DOD will sustain its 

commitment to its priority programs. 

As DOD works to develop the strategy, it should take an interim step by 

identifying priorities for programs that are already past milestone B (the 

formal start of development). Once the strategy is complete, it should be 

used by the Office of the Secretary of Defense to prepare and assess 

annual budget proposals as well as to balance funding between science 

and technology efforts and acquisition efforts to ensure that robust 

technology development efforts are conducted, but outside the acquisition 

program until reaching maturity. 

• For each new major weapons program, require that senior-level officials 

from the requirements, science and technology, program management, 

testing communities as well as the Office of the Comptroller formally 

commit to a business case prior to approving a program at milestone B. At 

a minimum, the business case should demonstrate that 

Page 62 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 5: Conclusions and Recommendations

• a requirement exists that warrants a materiel solution consistent with 

national military strategy, 

• an independent analysis of alternatives has been conducted 

• the developer has the requisite technical knowledge to meet the 

requirement, 

• the developer has a knowledge-based product development and 

production plan that will attain high levels of design and production 

maturity, 

• reasonable estimates have been developed to execute the product 

development and production plan, and 

• funding is available to execute the plan. 

• Develop and implement a process to instill and sustain accountability for 

successful program outcomes. At a minimum, this should consider 

• matching program manager tenure with delivery of a product or for 

system design and demonstration, 

• tailoring career paths and performance management systems to 

incentivize longer tenures, 

• empowering program managers to execute their programs, including 

an examination of whether and how much additional authority can be

provided over funding, staffing, and approving requirements proposed 

after milestone B, 

• developing and providing automated tools to enhance management and 

oversight as well as to reduce time required to prepare status 

information. 

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

Procurement and Acquisition Policy concurred with our 

recommendations. In doing so, DOD asserted it was already taking actions 

to address our recommendations, notably by reviewing its overall 

approach to acquisition governance and investment decisionmaking as 

part of its Quadrennial Defense Review due in February 2006 and 

identifying ways to more effectively implement existing policies. DOD also 

stated it intended to develop a plan to address challenges in acquisition 

manpower including program manager tenure and career path and it 

intends to enhance its information management systems to facilitate 

oversight and management decisions. As underscored in our report, DOD 

has attempted similar efforts in the past—that is, reviewed its approach to

governance and investment decisions and policies—without achieving 

significant improvements. This is because DOD has not assured such 

actions were executed in tandem with (1) instilling more leadership and 

discipline in investment decisionmaking, in both the short and long term 

Agency Comments 

and Our Evaluation 

Page 63 GAO-06-110 Weapon Program Managers Best Practices 
Chapter 5: Conclusions and Recommendations

and (2) instilling accountability—by requiring key senior officials to sign a 

business case, based on systems engineering knowledge, prior to every 

new acquisition as well as by matching program managers’ tenure to cycle 

time. Therefore, in pursuing the actions it identifies in its response to our 

report, we believe that DOD should address the important questions of 

who should be held accountable for acquisition decisions; how much 

deviation from the original business case is allowed before it is no longer 

considered valid and the investment reconsidered; and what is the penalty 

when investments do not result in meeting promised warfighter needs. 

The full text of the department’s response is in appendix I. 

Page 64 GAO-06-110 Weapon Program Managers Best Practices 
Appendix I: Comments from the Department Appendix I: Comments from the Department of Defense 

of Defense 

Page 65 GAO-06-110 Weapon Program Managers Best Practices
Appendix I: Comments from the Department 

of Defense 

Page 66 GAO-06-110 Weapon Program Managers Best Practices
Appendix I: Comments from the Department 

of Defense 

Page 67 GAO-06-110 Weapon Program Managers Best Practices
Appendix I: Comments from the Department 

of Defense 

Page 68 GAO-06-110 Weapon Program Managers Best Practices
Appendix II: GAO Staff Acknowledgments 

Page 69 GAO-06-110 Weapon Program Managers Best Practices 

Appendix II: GAO Staff Acknowledgments 

GAO Contacts Michael J. Sullivan (202) 512-4841 or sullivanm@gao.gov 

Greg Campbell, Cristina Chaplain, Ron La Due Lake, Sigrid McGinty, 

Jean McEwen, Carol Mebane, Guisseli Reyes, Lesley Rinner, Lisa Simon, 

Bradley Trainor, and Michele Williamson. 

Staff 

Acknowledgments 
Related GAO Products 

Page 70 GAO-06-110 Weapon Program Managers Best Practices 

Related GAO Products 

DOD Acquisition Outcomes: A Case for Change. GAO-06-257T. 

Washington, D.C.: November 15, 2005. 

Defense Acquisitions: Stronger Management Practices Are Needed to 

Improve DOD’s Software-Intensive Weapon Acquisitions. GAO-04-393. 

Washington, D.C.: March 1, 2004.

Best Practices: Setting Requirements Differently Could Reduce Weapon 

Systems’ Total Ownership Costs. GAO-03-57. Washington, D.C.: February

11, 2003 

Best Practices: Capturing Design and Manufacturing Knowledge Early 

Improves Acquisition Outcomes. GAO-02-701. Washington, D.C.: July 15,

2002. 

Defense Acquisitions: DOD Faces Challenges in Implementing Best 

Practices. GAO-02-469T. Washington, D.C.: February 27, 2002.

Best Practices: Better Matching of Needs and Resources Will Lead to 

Better Weapon System Outcomes. GAO-01-288. Washington, D.C.: March 8, 

2001. 

Best Practices: A More Constructive Test Approach Is Key to Better 

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

2000. 

Defense Acquisition: Employing Best Practices Can Shape Better 

Weapon System Decisions. GAO/T-NSIAD-00-137. Washington, D.C.: April 

26, 2000. 

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

Programs Implement Best Practices. GAO/NSIAD-99-206. Washington,

D.C.: August16, 1999. 

Best Practices: Better Management of Technology Development Can 

Improve Weapon System Outcomes. GAO/NSIAD-99-162. Washington, 

D.C.: July 30, 1999. 

Defense Acquisitions: Best Commercial Practices Can Improve Program 

Outcomes. GAO/T-NSIAD-99-116. Washington, D.C.: March 17, 1999. 

Defense Acquisition: Improved Program Outcomes Are Possible. 

GAO/T-NSIAD-98-123. Washington, D.C.: March 17, 1998. 
Related GAO Products 

Best Practices: DOD Can Help Suppliers Contribute More to Weapon 

System Programs. GAO/NSIAD-98-87. Washington, D.C.: March 17, 1998.

Best Practices: Successful Application to Weapon Acquisition Requires

Changes in DOD’s Environment. GAO/NSIAD-98-56. Washington, D.C.: 

February 24, 1998. 

Best Practices: Commercial Quality Assurance Practices Offer 

Improvements for DOD. GAO/NSIAD-96-162. Washington, D.C.: August 26, 

1996. 

(120320) Page 71 GAO-06-110 Weapon Program Managers Best Practices 
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