Defense Acquisitions: DOD's Revised Policy Emphasizes Best Practices, but More Controls Are Needed
Published: 2003-11-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Defense's (DOD) investment in new weapon systems is expected to exceed $1 trillion from fiscal years 2003 to 2009. To reduce the risk of cost and schedule overruns, DOD revamped its acquisition policy in May 2003. The policy provides detailed guidance on how weapon systems acquisitions should be managed. The Senate report accompanying the National Defense Authorization Act for Fiscal Year 2004 required GAO to determine whether DOD's policy supports knowledge-based, evolutionary acquisitions and whether the policy provides the necessary controls for DOD to ensure successful outcomes, such as meeting cost and schedule goals. The report also required GAO to assess whether the policy is responsive to certain requirements in the Bob Stump National Defense Authorization Act for Fiscal Year 2003 concerning DOD's management of the acquisition process.
section_title: What GAO Found
paragraphs: DOD's new policy supports knowledge-based, evolutionary acquisitions by adopting lessons learned from successful commercial companies. One of those lessons is a knowledge-based approach, which requires program managers to attain the right knowledge at critical junctures--also known as knowledge points--so they can make informed investment decisions throughout the acquisition process. The policy also embraces an evolutionary or phased development approach, which sets up a more manageable environment for attaining knowledge. The customer may not get the ultimate capability right away, but the product is available sooner and at a lower cost. Leading firms have used these approaches--which form the backbone of what GAO calls the best practices model--to determine whether a project can be accomplished with the time and money available and to reduce risks before moving a product to the next stage of development. By adopting best practices in the acquisition policy, DOD's leadership has taken a significant step forward. The next step is to provide the necessary controls to ensure a knowledge-based, evolutionary approach. Implementing the necessary controls at all three knowledge points along the acquisition process helps decision makers ensure a knowledge-based approach is followed. Without controls in the form of measurable criteria that decision makers must consider, DOD runs the risk of making decisions based on overly optimistic assumptions. Each successive knowledge point builds on the preceding one, and having clearly established controls helps decision makers gauge progress in meeting goals and ensuring successful outcomes. DOD was responsive to the requirements in the Bob Stump National Defense Authorization Act for Fiscal Year 2003. DOD's responses reflected the committee's specific concerns about the application of certain statutory and regulatory requirements to the new evolutionary acquisition process, for more guidance for implementing spiral development, and about technology readiness at program initiations.

section_title: Letter
paragraphs: The Department of Defense (DOD) plans to spend more than $1 trillion  from fiscal years 2003 to 2009 for developing and procuring weapon  systems. To get the most out of its investment, DOD has set goals to  develop and procure weapons faster and at less cost. Guiding this effort is  DOD’s newly revised acquisition policy. Issued in May 2003, the policy  seeks to foster greater efficiency while building flexibility in the  acquisition process. The policy embraces a knowledge-based, evolutionary framework that emphasizes shorter development times.
DOD intends to use its policy to improve its record for meeting cost and  schedule estimates and for delivering capabilities as promised. Congress  has expressed support for DOD’s efforts to revamp its acquisition process  and has established requirements that DOD must take to ensure a  disciplined approach. Recognizing that a consistent and disciplined  application of policies will be key to achieving desired outcomes, the  Senate Armed Services Committee directed us to assess DOD’s  current acquisition policies to determine whether they (1) support  knowledge-based, evolutionary acquisitions, (2) provide the necessary  controls to ensure DOD’s policy intent is followed, and (3) respond to  specific requirements in the Bob Stump National Defense Authorization  Act for Fiscal Year 2003 (Public Law 107-314) regarding DOD plans to  manage its new acquisition process.
subsections: section_title: Background
paragraphs: Traditionally, DOD’s strategy for acquiring major weapon systems has  been to plan programs that would achieve a big leap forward in capability.  However, because the needed technologies often are not yet mature,  programs stay in development for years until the technologies are  demonstrated. As a result, weapon systems have frequently been  characterized by poor cost, schedule, and performance outcomes. This has  slowed modernization efforts, reduced the buying power of the defense  dollar, delayed capabilities for the warfighter, and forced unplanned—and  possibly unnecessary—trade-offs among programs.
Our extensive body of work shows that leading companies use a product  development model that helps reduce risks and increase knowledge when  developing new products. This best practices model enables decision  makers to be reasonably certain about their products at critical junctures  during development and helps them make informed investment decisions.  This knowledge-based process can be broken down into three cumulative  knowledge points.
Knowledge point 1: A match must be made between the customer’s  needs and the developer’s available resources—technology, engineering  knowledge, time, and funding—before a program starts.
Knowledge point 2: The product’s design must be stable and must  meet performance requirements before initial manufacturing begins.
Knowledge point 3: The product must be producible within cost,  schedule, and quality targets and demonstrated to be reliable before  production begins.
To bolster the knowledge-based process, leading companies use  evolutionary product development, an incremental approach that enables  developers to rely more on available resources rather than making  promises about unproven technologies. While the user may not initially  receive the ultimate capability under this approach, the initial product is  available sooner and at a lower, more predictable cost. Also, leading  companies know that invention cannot be scheduled and its cost is  difficult to estimate. They do not bring technology into new product  development unless that technology has been demonstrated to meet the  user’s requirements. Allowing technology development to spill over into  product development puts an extra burden on decision makers and  provides a weak foundation for making product development estimates.
DOD understands that it must improve acquisition process outcomes if  it is to modernize its forces within currently projected resources. To  help achieve this goal, DOD has revised its acquisition policy, called the  5000 series, to reflect best practices from successful commercial and DOD  programs. The policy covers most—but not all—major acquisitions. The  Secretary of Defense has delegated authority to the Missile Defense  Agency and to the National Security Space Team to develop separate  guidance for missile defense and space systems, respectively.Approximately 35 percent of DOD’s development funds in 2003 went to  these systems. (Figure 1 shows how $43.1 billion in development funds  were distributed across space, missile defense, and systems covered by  the 5000 series.) This report addresses policy for the defense programs  covered exclusively under the 5000 series.
section_title: DOD’s Revised Policy Provides a Framework for Knowledge-Based, Evolutionary Acquisitions
paragraphs: DOD’s leaders have made significant improvements to DOD’s acquisition  policy by adopting the knowledge-based, evolutionary approach used by  leading commercial companies. The revised policy has the potential to  transform DOD’s acquisition process by reducing risks and increasing the  chances for successful outcomes. The policy provides a framework for  developers to ask themselves at key decision points whether they have  the knowledge they need to move to the next phase of acquisition. If  rigorously applied, this knowledge-based framework can help managers  gain the confidence they need to make significant and sound investment  decisions for major weapon systems. In placing greater emphasis on  evolutionary product development, the policy sets up a more manageable  environment for achieving knowledge. Another best practice reflected in  the policy’s framework is separating technology development from  product development, which reduces technological risk at the start of  a program.
As shown in table 1, DOD’s policy emphasizes best practices used by  leading companies.
Similar to the best practices model, DOD’s policy divides its acquisition  process into phases, as shown in figure 2. Key decisions are aligned with  the three critical junctures of a product’s development, or knowledge  points.
In other similarities, DOD’s framework pinpoints program start at  milestone B, about the same point as program start on the best practices  model. At the midway point on both approaches, a stable product design  should be demonstrated. With DOD’s framework, managers are required to  know—by the time full-rate production decision review occurs—whether  the product can be produced within cost, schedule, and quality targets.  This requirement occurs earlier in the best practices model, before  production begins, or at knowledge point 3. Leading companies have  used this approach to reduce risks and to make costs and delivery dates  more predictable.
section_title: Controls Are Needed to Ensure Knowledge-Based Approach Is Followed
paragraphs: While DOD has strengthened its acquisition policy with a knowledge- based, evolutionary framework, the policy does not include many of the  same controls that leading companies rely on to attain a high level of  knowledge before making additional significant investments. Controls are  considered effective if they are backed by measurable criteria and if  decision makers are required to consider them before deciding to advance  a program to the next level. Controls used by leading companies help  decision makers gauge progress in meeting cost, schedule, and  performance goals and ensure that managers will (1) conduct activities to  capture relevant product development knowledge, (2) provide evidence  that knowledge was captured, and (3) hold decision reviews to determine  that appropriate knowledge was captured to move to the next phase.
To determine if DOD has the necessary controls, we compared controls in  DOD’s policy with those used in the best practices model at three critical  junctures. Table 2 shows the presence or absence of controls for various  versions of DOD policy since 1996, including the May 2003 revision.
At all three knowledge points, DOD’s policy does not provide all the  necessary controls used by commercial companies. For example, at  program launch (milestone B) or when knowledge point 1 should be  reached, the policy requires decision makers to identify and validate a  weapon system’s key performance requirements and to have a technical  solution for the system before program start. This information is then used  to form cost and schedule estimates for the product’s development.  However, the policy does not emphasize the use of a disciplined systems  engineering process for balancing a customer’s needs with resources to  deliver a preliminary design. The lack of effective controls at knowledge  point 1 could result in gaps between requirements and resources being  discovered later in development.
At the design readiness review or when knowledge point 2 should be  reached, DOD’s policy does not require specific controls to document that  a product is ready for initial manufacturing and demonstration. DOD’s  policy suggests appropriate criteria, such as number of subsystem and  system design reviews completed, percentage of drawings completed,  planned corrective actions to hardware and software deficiencies,  adequate development testing, completed failure modes and effects  analysis, identification of key system characteristics and critical  manufacturing processes, and availability of reliability targets and growth  plans. However, these criteria are not required. For example, we found  that a key indicator of a product’s design stability is the completion of  90 percent of the engineering drawings supported by design reviews.  DOD’s policy does not require that a certain percentage of drawings or  design reviews be completed to ensure the design is mature enough to  enter the system demonstration phase. As a result, a decision maker has  no benchmark to consider when deciding to advance a program to the  next level of development.
Finally, at production commitment or when knowledge point 3 should be  reached, DOD’s policy does not require specific controls to document that  a product can be manufactured to meet cost, schedule, and quality targets  before moving into production. For example, the policy states there  should be “no significant manufacturing risks” at the start of low-rate  production but does not define what this means or how it is to be  measured. DOD’s policy does not require the demonstrated control of  manufacturing processes and the collection of statistical process control  data until full-rate production begins but even then fails to specify a  measurable control. Given that low-rate production can last several years,  a significant number of products can be manufactured before processes  are brought under control, creating a higher probability of poor cost and  schedule outcomes.
section_title: DOD Is Responsive to Congressional Requirements about New Acquisition Process
paragraphs: While supporting efforts to build more flexibility into the DOD acquisition  process and to develop weapon systems using an evolutionary approach,  Congress asked DOD to be more disciplined in its approach. The Defense  Authorization Act for Fiscal Year 2003 required DOD to address (1) the  way it plans to meet certain statutory and regulatory requirements for  managing its major acquisition programs, (2) needed guidance for  implementing spiral developments, and (3) technology readiness (at  acquisition program initiation). DOD was responsive to all three  requirements. With regard to the second requirement, a description of the  process that would be used to independently validate that measurable exit  criteria for applying a spiral development process have been met was  unclear. DOD stated that the milestone decision authority provides that  independent validation as part of DOD’s milestone approval process.  DOD’s responses to the relevant sections of the act are summarized below.  More detailed comparisons are provided in appendixes I, II, and III.
subsections: section_title: Section 802: Evolutionary Acquisition
paragraphs: Requirements: This section directed DOD to report on its plan to meet  certain statutory and regulatory requirements for managing its major  acquisition programs applying an evolutionary acquisition process. These  include establishing and approving operational requirements and cost and  schedule goals for each increment, meeting requirements for operational  and live fire testing for each increment, and optimizing total system  performance and minimizing total ownership costs.
DOD response: In April 2003, DOD submitted its report reflecting how  these requirements are addressed in its acquisition policy. According to  the report, the policy addresses the statutory and other requirements  applicable to all major defense acquisition programs, including each  increment of evolutionary acquisition programs. For example, the policy  requires that each program or increment of an evolutionary acquisition  have a milestone B decision to approve program initiation and to permit  entry into system development and demonstration. The policy specifies  the statutory and regulatory information necessary to support the  decision.
section_title: Section 803: Spiral Development
paragraphs: Requirements: This section authorizes DOD to conduct a research and  development program for a major defense acquisition program using spiral  development only if approved by the Secretary of Defense or authorized  high-level designee. A program cannot be conducted as a spiral  development unless the Secretary of Defense or designee approves a plan  that describes such things as the program strategy, test plans, performance  parameters, and measurable exit criteria. The section also requires the  Secretary of Defense to issue guidance addressing the appropriate  processes for an independent validation that exit criteria have been met,  the operational assessment of fieldable prototypes, and the management  of these types of programs. It further requires the Secretary to report to  Congress on the status of each program applying spiral development by  September 30 of each year from 2003 to 2008.
DOD response: DOD established a technology development strategy in  the new policy to address this requirement. The strategy must be  completed before a program can enter the technology development phase.  The strategy also documents the cost and schedule goals, the test plans,  the number of prototypes, and a program strategy for the total research  and development program. The strategy requires a test plan to ensure the  goals and exit criteria for the first technology spiral demonstration are  met, and the policy requires an independent operational assessment for  the release of each product increment to the user. What is unclear in  DOD’s guidance is the process that will be used for independently  validating whether measurable cost, schedule, and performance exit  criteria have been met. However, DOD stated that the milestone decision  authority provides independent validation that exit criteria have been met  as part of DOD’s milestone approval process. As of October 23, 2003,  DOD’s report on the status of each program applying spiral development  was still in draft and not yet submitted. DOD’s current draft report states  that there are no research and development programs that have been  approved as spiral development programs as of September 30, 2003.  Section 803 requirements were implemented in DOD Instruction 5000.2,  which was effective in May 2003. DOD anticipates that there will be  approved spiral development programs to report in 2004.
section_title: Section 822: Independent Technology Readiness Assessments
paragraphs: Requirements: This section added a requirement to section 804  of the National Defense Authorization Act for Fiscal Year 2002  (Public Law 107-107) that directed DOD to report by March of each year  between 2003 and 2006 on the maturity of technology at the initiation of  major defense acquisition programs. Each report is required to (1) identify  any major acquisition program that entered system development and  demonstration during the preceding calendar year with immature key  technology that was not demonstrated in, at minimum, a relevant  environment, as required by the new policy; (2) justify the incorporation  of any key technology on an acquisition program that does not meet that  requirement; (3) identify any instances that the Deputy Under Secretary  of Defense for Science and Technology did not concur with the technology  assessment and explain how the issue has been or will be resolved;  (4) identify each case in which a decision was made not to conduct an  independent technology readiness assessment for a critical technology on  a major defense acquisition; and (5) explain the reasons for the decision  each year through 2006.
DOD response: In March 2003, DOD reported that two programs entered  system development and demonstration in 2002 with critical technologies  that did not meet demonstration requirements and provided justification  for them. DOD did not identify or report any cases where an independent  technology readiness assessment was not conducted or where the  Under Secretary disagreed with assessment findings.
section_title: Conclusions
paragraphs: DOD can maximize its $1 trillion investment in new weapons over the next  6 years by ensuring effective implementation of the new acquisition policy.  DOD’s leaders have taken noteworthy steps by incorporating into the  policy a framework that supports a knowledge-based, evolutionary  acquisition process, similar to one used by leading commercial companies  to get successful outcomes. A framework is an important and significant  step. DOD must now turn its attention to establishing controls. As leading  companies have found, having clearly established controls to capture and  use appropriate knowledge to make decisions at critical junctures is  crucial for delivering affordable products as planned. DOD’s policy  addresses specific congressional requirements and includes some controls  that leading companies use to capture knowledge at the start of a program.  However, additional controls are needed to ensure that decisions made  throughout product development are informed by demonstrated  knowledge.
section_title: Recommendations for Executive Action
paragraphs: DOD must design and implement necessary controls to ensure that  appropriate knowledge is captured and used at critical junctures to make  decisions about moving a program forward and investing more money.  We recommend that the Secretary of Defense require additional controls  for capturing knowledge at three key points—program launch, design  readiness review for transitioning from system integration to system  demonstration, and production commitment. The additional controls for  program launch (milestone B) should ensure the capture of knowledge  about the following:
Cost and schedule estimates based on knowledge from a preliminary  design using systems engineering tools.
The additional controls for transitioning from system integration to system  demonstration (design readiness review) should ensure the capture of  knowledge about the following:
Completion of 90 percent of engineering drawings.
Completion of subsystem and system design reviews.
Agreement from all stakeholders that drawings are complete and the  design is producible.
Completion of failure modes and effects analysis.
Reliability targets and a reliability growth plan based on demonstrated  Identification of key system characteristics.  Identification of critical manufacturing processes.  reliability rates of components and subsystems.
The additional controls for the production commitment (milestone C)  should ensure the capture of knowledge about the following:
Completion of production representative prototypes.
Availability of production representative prototypes to achieve reliability  goal and demonstrate the product in an operational environment.
Collection of statistical process control data.
Demonstration that critical manufacturing processes are capable and in  statistical control.
Because knowledge about technology, design, and manufacturing at  critical junctures can lower DOD’s investment risk, decisions that do not  satisfy knowledge-based criteria should be visible and justified. Therefore,  we also recommend that the Secretary of Defense document the rationale  for any decision to move a program to the next stage of development  without meeting the knowledge-based criteria, including those listed in the  first recommendation. The responsible milestone decision authority  should justify the decision in the program’s acquisition decision  memorandum and in a report to Congress.
section_title: Agency Comments and Our Evaluation
paragraphs: DOD provided us with written comments on a draft of this report. The  comments appear in appendix IV.
DOD partially concurred with our recommendation that the Secretary  require additional controls for capturing knowledge at three key points:  program launch, design readiness review for transitioning from system  integration to system demonstration, and production. DOD stated that it  agrees in principle with the advantages of using knowledge-based controls  at key points in the acquisition process to assess risk and ensure readiness  to proceed into the next phase of the acquisition process. DOD believes  the current acquisition framework includes the controls necessary to  achieve effective results, but it will continue to monitor the process to  determine whether others are necessary to achieve the best possible  outcomes.
While we believe DOD’s effort to establish a solid framework for  evolutionary acquisitions is a giant step forward, our work has shown that  a disciplined application of controls in the process is needed to implement  the framework if better acquisition outcomes are to be achieved. DOD’s  policy does not include all the necessary controls to ensure a high level of  product knowledge is attained and used for making decisions to move a  program forward in the product development process. Leading product  developers use additional controls, as listed in our first recommendation,  to achieve the knowledge necessary to reduce risk to reasonable levels at  critical junctures before making additional significant investments in  product development. Simply monitoring the process may not be enough  for DOD to achieve the best outcomes. Therefore, we are retaining our  recommendation that the Secretary require additional controls at three  critical points in the acquisition process.
DOD also partially concurred with our recommendation that the Secretary  document in each program’s acquisition decision memorandum and in a  report to Congress the rationale for any decision to move a program to the  next stage of development without meeting the knowledge-based criteria,  including those described in the first recommendation. DOD agreed that it  should record and be accountable for program decisions. Decision makers  will continue to use the acquisition decision memorandum to document  program decisions and the rationale for them. DOD did not concur with  the need for a report outside the department. Because we believe strongly  that knowledge-based criteria used to gauge a product’s development  progress at critical junctures can lower DOD’s investment risks, we think  it is important that decisions made without satisfying knowledge-based  criteria be justified in a visible and transparent way to hold managers  accountable for moving a program forward absent this knowledge.  Therefore, we are retaining our recommendation for reporting the basis  for decisions to move forward in a report to Congress.
section_title: Scope and Methodology
paragraphs: We reviewed DOD’s revised and past acquisition policies, DOD Directive  5000.1, DOD Instruction 5000.2, and DOD 5000.2-R, which provide  management principles and mandatory policies and procedures for  managing acquisitions programs. We contacted an official in the Office of  the Under Secretary of Defense for Acquisition, Technology, and Logistics  who is responsible for the development of the policy to better understand  its content. We also reviewed information from the Defense Acquisition  University that provided educational material on the policies.
We reviewed the relevant sections of the Bob Stump National Defense  Authorization Act for Fiscal Year 2003 and the accompanying Senate  Armed Services Committee report to identify the requirements applicable  to DOD’s acquisition policy. We compared these requirements with DOD’s  responses to determine whether they have been addressed.
Finally, we used information from more than 10 GAO products that  examine how commercial best practices can improve outcomes for  various DOD programs. During the past 6 years, we have gathered  information based on discussions and visits with the following companies:
Chrysler
Ford Motor
Motorola
Hewlett-Packard
Cummins
Toyota
Honda
Boeing Commercial Airplane Group
Bombardier Aerospace
Hughes Space and Communication
Xerox
Caterpillar
General Electric Aircraft Engines
Harris Semiconductor
Texas Instruments
Varian Oncology Systems
Ethicon-Endo Surgery  (division of Johnson &  Johnson)
Although the approaches varied, these companies consistently applied the  basic processes and standards in use. We compared this information with  the acquisition framework and controls established by DOD’s policy. We  concentrated on whether the policy provides a framework for a  knowledge-based, evolutionary process and the controls necessary to  carry out this intent.
We conducted our review from April 2003 to September 2003 in  accordance with generally accepted government auditing standards.
We are sending copies of this report to the Secretary of Defense; the  Secretaries of the Air Force, Army, and Navy; and the Director of the  Office of Management and Budget. We will also provide copies to others  on request. In addition, the report will be available at no charge on the  GAO Web site at http://www.gao.gov.
Please contact me at (202) 512-4841 if you have any questions concerning this report. Other key contributors to this report were  Lily Chin, Chris DePerro, Matt Lea, Mike Sullivan, and Adam Vodraska.
section_title: Appendix I: Section 802, Evolutionary Acquisition
paragraphs: Section 802 of the Defense Authorization Act for Fiscal Year 2003 required  the Secretary of Defense to submit a report to Congress explaining how  the Department of Defense (DOD) plans to meet certain statutory and  regulatory requirements for acquisition programs following an  evolutionary approach. In April 2003, the Secretary reported how these  requirements were addressed in DOD’s policy (such as in tables of  statutory and regulatory information requirements contained in enclosure  3 of Instruction 5000.2). According to the report, DOD’s policy requires  that each program—including an increment of an evolutionary  acquisition—have a milestone B decision to approve program initiation  and to permit entry into systems development and demonstration. DOD’s  policy specifies the statutory and regulatory information necessary to  support the decision. We examined the policy to ensure the statutes and  regulations identified in section 802 were addressed. Table 3 provides a  list of the statutory and regulatory requirements identified in section 802, a  corresponding document and page number where the requirement appears  in DOD’s policy, and a description of the requirement from the policy.
Section 802 also required DOD to report on its plans for addressing certain  acquisition process issues regarding each increment of an evolutionary  process. DOD reported on how it plans to establish and approve  operational requirements and cost and schedule goals; meet requirements  for operational and live fire testing; monitor cost and schedule  performance; achieve interoperability; and consider total system  performance and total ownership costs. We compared DOD’s response  with section 802’s reporting requirements. As shown in table 4, DOD was  responsive to the 802 requirements.
section_title: Appendix II: Section 803, Spiral Development
paragraphs: Section 803 of the Defense Authorization Act for Fiscal Year 2003  authorized the Secretary of Defense to conduct major defense acquisition  programs as spiral development programs. However, the section placed a  limitation on these programs. It stated that a research and development  program for a major acquisition may not be conducted as a spiral  development program unless the Secretary of Defense or authorized  high-level designee gives approval. The section requires the Secretary of  Defense to issue guidance for the implementation of such programs to  address appropriate processes for ensuring the independent validation of  exit criteria being met, the operational assessment of fieldable prototypes,  and the management of these types of programs.
DOD responded to these requirements principally by incorporating into  the acquisition policy the requirement for a technology development  strategy. This strategy is a prerequisite for a project to enter the  technology development phase of the acquisition process, or milestone A.  Table 5 compares the spiral development plan requirements in the act with  the technology development strategy requirements in DOD’s May 2003  acquisition policy.
As shown in the table, DOD’s policy generally responded to the  requirements in the act concerning guidance for implementation of spiral  development programs. While the policy includes a technology  development strategy that requires a test plan to ensure the goals and exit  criteria for the first technology spiral demonstration are met and an  independent operational assessment for the release of each product  increment to the user, it is unclear what the process is for independently  validating that cost, schedule, and performance exit criteria have been.  However, DOD stated that the milestone decision authority provides  independent validation that exit criteria have been met as part of DOD’s  milestone approval process. Section 803 also requires that a spiral  development plan include “pecific cost, schedule, and performance  parameters, including measurable exit criteria, for the first spiral to be  conducted.” DOD’s policy substituted “parameters” for “goals” and did not  use the term “measurable” in describing the required exit criteria.
Finally, section 803 requires the Secretary of Defense to submit to  Congress by September 30 yearly from 2003 through 2008 a status report  on each spiral development program. The report is to include information  on unit costs for the projected prototypes. As of October 23, 2003, DOD’s  report on the status of each program applying spiral development was still  in draft and not yet submitted. DOD’s current draft report states that there  are no research and development programs that have been approved as  spiral development programs as of September 30, 2003. Section 803  requirements were implemented in DOD Instruction 5000.2, which was  effective in May 2003. DOD anticipates that there will be approved spiral  development programs to report in 2004.
section_title: Appendix III: Section 804, Technology Maturity, and Section 822, Independent Technology Readiness Assessments
paragraphs: Section 804 of the Defense Authorization Act for Fiscal Year 2002 required  DOD to report on the maturity of technology at the initiation of major  defense acquisition programs. The act directed DOD to report by March 1  of each year between 2003 and 2006 on a requirement in DOD’s policy that  technology must have been demonstrated in a relevant environment (or,  preferably, in an operational environment) to be considered mature  enough to use for product development in systems integration. Each  report is required to (1) identify any major acquisition program that  entered system development and demonstration during the preceding  calendar year with immature key technology that was not demonstrated  in, at minimum, a relevant environment, as required by the new policy;  (2) justify the incorporation of any key technology on an acquisition  program that does not meet that requirement; (3) and identify any  instances that the Deputy Under Secretary of Defense for Science and  Technology did not concur and explain how the issue has been or will be  resolved, including information on the use of independent readiness  assessments. Section 822 of the Defense Authorization Act for Fiscal Year  2003 amended section 804 by adding a requirement that the Secretary of  Defense identify each case in which an authoritative decision has been  made within DOD not to conduct an independent technology readiness  assessment for a critical technology on a major defense acquisition  program and explain the reasons for the decision. On March 18, 2003, DOD  submitted its first report. Table 6 shows the specific requirements for the  report and DOD’s response.
section_title: Related GAO Products
paragraphs: 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 Program Implement Best Practices. GAO/NSIAD-99-206.  Washington, D.C.: August 16, 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.
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.