Best Practices
Stronger Practices Needed to Improve DOD Technology Transition Processes Gao ID: GAO-06-883 September 14, 2006The Department of Defense (DOD) relies on its science and technology community to develop innovative technologies for weapon systems, spending $13 billion on basic, applied, and advanced technology research. Several GAO reports have addressed problems in transitioning technologies to the acquisition community. This report, which was prepared under the Comptroller General's authority to conduct evaluations, compares DOD's technology transition processes with commercial best practices. Specifically, GAO identifies technology transition techniques used by leading companies and assesses the extent to which DOD uses the techniques
Leading commercial companies use three key techniques for successfully developing and transitioning technologies, with the basic premise being that technologies must be mature before transitioning to the product line side. (1) Strategic planning at the corporate level: Strategic planning precedes technology development so managers can gauge market needs, identify the most desirable technologies, and prioritize resources. (2) Gated management reviews: A rigorous process is used to ensure a technology's relevancy and feasibility and enlist product line commitment to use the technologies once the labs are finished maturing them. (3)Corroborating tools: To secure commitment, technology transition agreements solidify and document specific cost, schedule, and performance metrics labs need to meet for transition to occur. Relationship managers address transition issues within the labs and product line teams and across both communities. Meaningful metrics gauge project progress and process effectiveness. Not only does DOD lack the breadth and depth of these techniques, the department routinely accepts high levels of technology risk at the start of major weapon acquisition programs. The acquisition community works with technologies before they are ready to be transitioned and takes on responsibility for technology development and product development concurrently. A defined phase for technology transition is not evident. These shortcomings contribute significantly to DOD's poor cost and schedule outcomes. A stark contrast exists between DOD's and private industry's environments for developing technology. The numerous examples of DOD programs that have incurred cost overruns, schedule delays, and reduced performance serve as reminders that inserting a few best practices and changing the mechanics of technology transition processes without changing the environment that determines incentives may not produce better outcomes.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-06-883, Best Practices: Stronger Practices Needed to Improve DOD Technology Transition Processes
This is the accessible text file for GAO report number GAO-06-883
entitled 'Best Practices: Stronger Practices Needed to Improve DOD
Technology Transition Processes' which was released on September 14,
2006.
This text file was formatted by the U.S. Government Accountability
Office (GAO) to be accessible to users with visual impairments, as part
of a longer term project to improve GAO products' accessibility. Every
attempt has been made to maintain the structural and data integrity of
the original printed product. Accessibility features, such as text
descriptions of tables, consecutively numbered footnotes placed at the
end of the file, and the text of agency comment letters, are provided
but may not exactly duplicate the presentation or format of the printed
version. The portable document format (PDF) file is an exact electronic
replica of the printed version. We welcome your feedback. Please E-mail
your comments regarding the contents or accessibility features of this
document to Webmaster@gao.gov.
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. Because this work
may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this
material separately.
Report to Congressional Committees:
United States Government Accountability Office:
GAO:
September 2006:
Best Practices:
Stronger Practices Needed to Improve DOD Technology Transition
Processes:
DOD Technology Transition:
GAO-06-883:
GAO Highlights:
Highlights of GAO-06-883, a report to congressional committees
Why GAO Did This Study:
The Department of Defense (DOD) relies on its science and technology
community to develop innovative technologies for weapon systems,
spending $13 billion on basic, applied, and advanced technology
research. Several GAO reports have addressed problems in transitioning
technologies to the acquisition community. This report, which was
prepared under the Comptroller General‘s authority to conduct
evaluations, compares DOD‘s technology transition processes with
commercial best practices. Specifically, GAO identifies technology
transition techniques used by leading companies and assesses the extent
to which DOD uses the techniques.
What GAO Found:
Leading commercial companies use three key techniques for successfully
developing and transitioning technologies, with the basic premise being
that technologies must be mature before transitioning to the product
line side.
* Strategic planning at the corporate level: Strategic planning
precedes technology development so managers can gauge market needs,
identify the most desirable technologies, and prioritize resources.
* Gated management reviews: A rigorous process is used to ensure a
technology‘s relevancy and feasibility and enlist product line
commitment to use the technologies once the labs are finished maturing
them.
* Corroborating tools: To secure commitment, technology transition
agreements solidify and document specific cost, schedule, and
performance metrics labs need to meet for transition to occur.
Relationship managers address transition issues within the labs and
product line teams and across both communities. Meaningful metrics
gauge project progress and process effectiveness.
Not only does DOD lack the breadth and depth of these techniques, the
department routinely accepts high levels of technology risk at the
start of major weapon acquisition programs. The acquisition community
works with technologies before they are ready to be transitioned and
takes on responsibility for technology development and product
development concurrently, as shown in the following figure. A defined
phase for technology transition is not evident. These shortcomings
contribute significantly to DOD‘s poor cost and schedule outcomes.
Figure: Path That DOD Follows for Technology Development and Product
Development:
[See PDF for Image]
Source: DOD (data); GAO (analysis and presentation).
[End of Figure]
A stark contrast exists between DOD‘s and private industry‘s
environments for developing technology. The numerous examples of DOD
programs that have incurred cost overruns, schedule delays, and reduced
performance serve as reminders that inserting a few best practices and
changing the mechanics of technology transition processes without
changing the environment that determines incentives may not produce
better outcomes.
What GAO Recommends:
GAO recommends that DOD strengthen its technology transition processes
by developing a gated process with criteria to support funding
decisions; expanding the use of transition agreements, relationship
managers, and metrics; and setting aside funding for transition
activities. DOD generally agreed with GAO‘s recommendations with the
exception of adopting process-oriented metrics and setting aside
funding for transition. It cited ongoing initiatives it believes
address several of the recommendations. GAO believes DOD‘s actions to
date are incomplete and all recommendations warrant further attention.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-883].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Michael J. Sullivan at
(202) 512-4841 or sullivanm@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Leading Companies Rely on Strategic Planning, a Gated Process, and
Tools to Transition Needed Technologies:
DOD Lacks Breadth and Depth of Techniques That Leading Companies Use to
Effectively Transition Technologies:
Differences in Environment and Incentives Contribute to Different
Practices and Outcomes:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Comments from the Department of Defense:
Appendix III: DOD Research, Development, Technology, and Engineering
Budget:
Appendix IV: DOD Technology Readiness Levels:
Related GAO Products:
Tables:
Table 1: DOD's Two Development Phases with Technology-Related
Activities:
Table 2: Metrics Used by Leading Companies to Assess Lab Projects and
Processes:
Figures:
Figure 1: Fiscal Year 2006 Categories for DOD Research, Development,
Test, and Evaluation Budget (dollars in billions):
Figure 2: Average Program Research, Development, Test, and Evaluation
Cost Growth from First Full Estimate (sample of 52 DOD weapon
programs):
Figure 3: General Flow of Process Leading Up to Technology Transition:
Figure 4: Generalized Depiction of Deliverables and Funding under Gated
Process:
Figure 5: Linkage between Technology Development and Product
Development:
Figure 6: Notional Boeing Technology Maturity Scorecard for a
Hypothetical Technology:
Figure 7: Questions That Should Be Answered in Technology Transition
Agreements:
Figure 8: Communication Flow for Motorola's Three Levels of
Relationship Managers:
Figure 9: Path that DOD Routinely Follows for Technology Development
and Product Development:
Figure 10: Criteria for DOD Technology Development Phase:
Figure 11: Accountability for Management and Funding of Technology:
Figure 12: Excerpts from a Defense Science Board Task Force Report on
the Manufacturing Technology Program:
Figure 13: DARPA, a Success Story:
Abbreviations:
DARPA: Defense Advanced Research Projects Agency:
DDRE: Director, Defense Research and Engineering:
DOD: Department of Defense:
RDT&E: research, development, test, and evaluation:
S&T: science and technology:
TRL: technology readiness level:
United States Government Accountability Office:
Washington, DC 20548:
September 14, 2006:
The Honorable John W. Warner:
Chairman:
The Honorable Carl Levin:
Ranking Minority Member:
Committee on Armed Services:
United States Senate:
The Honorable Duncan Hunter:
Chairman:
The Honorable Ike Skelton:
Ranking Minority Member:
Committee on Armed Services:
House of Representatives:
The Department of Defense (DOD) relies on the technological superiority
of its weapon systems and armed forces to protect U.S. interests at
home and abroad. The DOD science and technology (S&T) community is
tasked with ensuring that technologies are mature when DOD's
acquisition community takes over and integrates the technologies into
weapon systems. In fiscal year 2006, DOD plans to spend approximately
$13 billion[Footnote 1] in its science and technology efforts to
develop technologies that are as innovative as stealth and global
positioning were when they were first developed. In doing its work, the
S&T community must strike a balance between meeting the short-term
needs of today's warfighters and the long-term needs of future years'
warfighters. Achieving this balance is made more challenging because of
the need to keep pace with or exceed the pace of innovation and to
counter technologies developed by potential U.S. adversaries.
Although the United States has produced the best weapons in the world,
its acquisition programs often incur cost overruns, schedule delays,
and performance shortfalls that undermine DOD's buying power. This
dilemma is due in part to DOD's difficulty transitioning technologies
from a technology development environment to an acquisition program.
Because the acquisition community frequently pulls technologies too
early, it takes on the additional task of maturing the technologies--an
activity that is the primary responsibility of technology developers--
at the start of an acquisition program.[Footnote 2] The start of a
program ushers in a high-cost, delivery-oriented phase in which the
acquisition community is supposed to be focused on integrating
subsystems and working on system development and demonstration. DOD has
continued to allow the acquisition community to take over this task
before the S&T community considers the technologies ready for
transition. Numerous GAO reports have addressed the problems of
proceeding with immature technologies and have explained what leading
commercial companies do to ward off such problems.[Footnote 3]
This report examines DOD's technology transition processes through the
prism of best practices. Specifically, our objectives are to (1)
identify techniques that commercial companies use to transition mature
technologies before the start of product development and (2) assess the
extent to which DOD is using these techniques. We also describe how the
environments at private companies and DOD differ with regard to
technology development. The overall effort to hand off and integrate
mature technologies is referred to in this report as technology
transition. Also in this report, the private sector acquisition
community is generally referred to as a product line or business unit.
GAO has prepared this report under the Comptroller General's authority
to conduct evaluations on his own initiative as part of a continued
effort to assist Congress in overseeing DOD's technology and
acquisition investments.
In conducting our work, we interviewed lab and product line managers at
four leading commercial companies--Boeing, IBM, Motorola, and 3M--to
identify processes for successfully transitioning mature technologies.
These companies develop a variety of products such as the 787 airplane,
network servers, integrated radio communications and information
solutions, and fuel cell technology for cars, buses, trains, homes, and
businesses. We also conducted interviews and collected pertinent
documents from each of DOD's military services and the Defense Advanced
Research Projects Agency (DARPA), which is the central science and
technology organization for DOD. We compared commercial and DOD
practices to identify potential areas for improvement. Appendix I
includes additional details about how we performed our review, which
was conducted from June 2005 to July 2006 in accordance with generally
accepted government auditing standards.
Results in Brief:
Successful transition in leading companies starts with strong strategic
planning followed by a structured technology development process led by
research labs and supported by tools that pave the way for a smooth
handoff to the product line. Strategic planning is considered a
precursor to transition and allows managers to identify market needs so
the company can quickly adapt its technology portfolios to meet those
needs. A gated technology development process continually tests for
relevancy and feasibility of technologies and gauges the commitment of
product line managers to accept them. Once a technology is ready to
transition, management and funding responsibilities gradually shift
from the lab to the product line. By the end of transition, but before
product development starts, the technology is validated as mature
enough for use in the intended product. Companies highlighted three
tools to facilitate transition: technology transition agreements,
relationship managers, and metrics. The agreements put in writing the
technology and business-related expectations, such as specific cost,
schedule, and performance characteristics that labs must demonstrate.
The agreements also may require documenting manufacturing costs or
specifying whether certain lab scientists will be loaned to the product
line to provide continuity in technical knowledge. Relationship
managers communicate across the labs and product lines to address
transition issues. Last, metrics gauge the effectiveness of the
technologies and the process itself. These tools require the active
involvement of the labs and product lines to ensure successful
transition of technologies to new products.
Over the past several years, DOD has taken steps to improve its
transition processes, but it lacks many of the techniques that are
hallmarks of leading companies' ability to transition technology
smoothly onto new products. From a strategic perspective, the
department lacks strong influence at the corporate level to guide the
department's technology investments. In addition, DOD does not use a
gated process with criteria that would allow lab and program managers
to know when a technology is ready to transition. Consequently,
technologies are often not ready when needed and acquisition programs
pull the technologies into their programs too early, leading to
inefficiency during product development and cost and schedule
increases. We found that DOD has taken some positive steps to aid
technology transition. They hold promise, but must be accepted,
improved, and replicated significantly more than currently to have a
positive impact. For example, each of the military services has
established boards to select and oversee some of their technology
projects and has elevated the importance of meaningful metrics. They
are also using technology transition agreements. However, use of these
agreements thus far has been low. With regard to improving
communication, DARPA is using relationship managers to address
transition issues. And the Office of the Secretary of Defense has
initiated a number of new programs, including the Joint Capability
Technology Demonstration program, which requires the S&T and
acquisition communities to work more collaboratively earlier in the
acquisition process.
The environment and incentives of private world-class companies differ
dramatically from DOD's. Despite these differences, the practices used
by commercial companies can help DOD make better progress in
transitioning technologies to weapon programs. Private companies
operate in a competitive environment that demands speedy delivery of
innovative, high-quality products to satisfy market needs or the
company will go out of business. DOD has a variety of "customers" and
complex relationships that often hinder the chief technology officer at
the corporate level from providing the type of strategic leadership
found at successful companies. DOD puts pressure on itself to develop
many new technologies. And because competition for funding is fierce,
the technologies described with many superlatives for speed and
lethality tend to get more attention than others do. We previously
reported that to secure funding, DOD program managers frequently make
overly optimistic promises to the warfighter about technologies' cost,
feasibility, risk, and delivery schedule.[Footnote 4] The challenge for
DOD and congressional decision makers lies not only in the "how to"
aspects of technology transition but also in creating stronger and more
uniform incentives that encourage the S&T and acquisition communities
to work together to deliver mature technologies to programs.
We are making recommendations that DOD strengthen its technology
development and transition processes by developing a gated process that
includes a transition phase and identifies criteria that can be used to
support funding decisions. In addition, we are recommending that DOD
expand the use of transition agreements, relationship managers, and
metrics. We also recommend that DOD set aside a portion of research and
development (advanced component development and prototypes) funds for
the S&T community to manage the transition of technologies to
acquisition programs.
DOD concurred with our recommendations to develop a gated process for
developing and transitioning technology and to expand the use of
technology transition agreements, although we do not see its plans as
fully responsive. DOD partially concurred with the recommendation to
include additional metrics in technology transition agreements, stating
that it recently developed metrics to gauge manufacturing readiness and
that other metrics should be applied on a project-by-project basis. DOD
also partially concurred with expanding the use of relationship
managers, stating it already uses written documents to facilitate
communication. However, DOD agreed that more time should be devoted by
staff at the execution level on transition activities. We continue to
believe that additional person-to-person communication needs to take
place at all levels within the S&T and acquisition communities to
supplement the written agreements. DOD did not concur with our
recommendation to adopt more process oriented metrics because it
believes that other processes it plans to mature over the next 4-5
years will capture these metrics. We believe the metrics DOD wants to
use will not allow the department to analyze its investment portfolio
and make adjustments appropriately. Finally, DOD did not agree with our
recommendation to set aside a portion of its 6.4 budget activity
funding, known as advanced component development and prototypes funds,
for the S&T community to manage for the transition of technology. DOD
does not believe the S&T community should have additional resources to
mature technologies to the point of successful transition to programs.
We found otherwise in the commercial world and believe DOD's approach
to funding technology development and transition is flawed.
Background:
Mature technologies are pivotal in developing new products. Without
mature technologies at the outset, a product development program will
almost certainly incur cost and schedule problems. Effectively managing
technology as a separate process from product development can improve
the potential for on-time product delivery at reduced cost. Leading
companies know this and have established disciplined processes to
prioritize their technology investments based on market needs,
eliminate technologies that are not relevant or feasible, balance
technology push and customer pull, and then transition technologies to
product development efficiently. Overall, effective management of
technology facilitates the delivery of new, innovative products to the
user in less time. While DOD is very aware of the need for new advanced
technology in its weapon systems, it has not always been effective in
transitioning mature and relevant technologies to product development.
Development of DOD's new weapon systems depends on two distinct phases:
technology development and product development. DOD relies on its S&T
community to identify, pursue, and develop new technologies that
improve and enhance military operations and ensure technological
superiority over adversaries. This includes the development of
technologies for new weapons programs as well as those that will be
inserted into existing systems. The acquisition community takes these
new technologies, develops weapon system programs, and delivers the
products--that is, the weapon systems--to the warfighter. Table 1 shows
technology-related activities that take place during technology
development and product development, who performs the work, fiscal year
2006 funding, and overall goals.
Table 1: DOD's Two Development Phases with Technology-Related
Activities:
Technology development phase:
Activities: identify, fund, develop, and manage new technology projects
that warfighter needs;
Who does the work: government, industry, and academic technologists;
2006 funding: about $13 billion;
Goal: demonstrate a technology or subsystem in a relevant environment;
Product development phase:
Activities: integrate, demonstrate, support, and upgrade technologies
on weapon systems;
Who does the work: prime developer, industry supplier, and acquisition
community's development lab engineers;
2006 funding: about $58 billion;
Goal: develop and deliver weapon systems to the warfighter.
Source: DOD (data); GAO (presentation and analysis).
Note: Activities listed under the product development phase focus
solely on technology maturation and do not include other activities
that the acquisition community is responsible for, such as overall
design and manufacturing.
[End of table]
DOD uses research, development, test, and evaluation appropriations to
fund its technology activities. The budget is divided into categories
that generally follow a sequential path for developing technologies.
Figure 1 shows the amount of money DOD spends in each category. (App.
III contains additional details about the budget.)
Figure 1: Fiscal Year 2006 Categories for DOD Research, Development,
Test, and Evaluation Budget (dollars in billions):
[See PDF for image]
Source: DOD (data); GAO (analysis and presentation).
[End of figure]
The S&T community controls the budget for basic research, applied
research, and advanced technology development. The budget category of
advanced component development and prototypes involves testing and
evaluating prototypes of systems or subsystems in a high-fidelity or
realistic environment before product development starts. DOD officials
say it is assumed that either the S&T community or the acquisition
community could carry out this work, but traditionally the acquisition
side prevails. After this point, additional technology-related
activities are completed as part of product development under the
authority of the acquisition community, namely, the program manager for
a weapon system.
Prior GAO reports have said that DOD launches new weapon programs with
immature technology. We found this inability to mature the technology
before the start of product development to be a major contributor to
weapon system cost and schedule growth. In our March 2006 review of 52
major DOD weapon programs, we found that 90 percent of the programs
started with immature technologies[Footnote 5]. More than half of the
programs were working with immature technologies at design review, when
DOD acquisition policy expects the design to be stable. And by the time
production began, one-third of programs still did not have mature
technologies.
Not surprisingly, we found that DOD research, development, test, and
evaluation cost estimates increased dramatically for programs having
immature technologies at program start. Figure 2 shows the average cost
growth of DOD programs we reviewed when technologies were mature and
immature at program start.
Figure 2: Average Program Research, Development, Test, and Evaluation
Cost Growth from First Full Estimate (sample of 52 DOD weapon
programs):
[See PDF for image]
Source: DOD (data as of March 2006); GAO ( analysis and presentation).
[End of figure]
Programs that started with mature technologies have averaged a modest
4.8 percent cost growth above the first full estimate, whereas programs
that started with immature technologies have averaged about 35 percent
cost growth. Some programs experienced significantly greater cost
growth. A consequence of this cost growth is that the services
typically deliver weapon systems late, have to reduce quantities to
stay within cost estimates, shift funds away from other projects to
make up for added costs, or some combination of the three. For example,
the Air Force has incurred a 189 percent growth in the cost per
aircraft for its F/A-22 tactical aircraft program, in large part
because of technology maturation issues. In response, the Air Force has
reduced the quantity of F/A-22 aircraft it plans to procure by 72
percent from 648 to 183 to offset escalating costs. In the case of the
Space-Based Infrared System High satellite, technology and design
components matured late in development, contributing to research,
development, test, and evaluation cost growth and four Nunn-McCurdy
unit cost breaches[Footnote 6]. Instead of purchasing five satellites,
the Air Force now plans to buy three at a program acquisition unit cost
of about $3.4 billion, a 315 percent increase.
Leading Companies Rely on Strategic Planning, a Gated Process, and
Tools to Transition Needed Technologies:
To successfully develop and transition technologies from their labs to
their product lines, leading commercial companies depend on three key
techniques:
* strategic planning at the corporate level;
* a gated management review process that ensures a technology's
relevancy, feasibility, and transition readiness; and:
* effective tools to solidify commitment, address transition issues,
and gauge project progress and process effectiveness.
Overall, corporations are incentivized to follow these critical
techniques because the opportunity cost of not meeting customer demand
is late delivery and lost revenues and market share for the company.
Through rigorous adherence to these practices, leading companies
increase chances of eventual success because the strategy for
developing the technology fits the company's objectives, commitment is
strong for incorporating the technology, and only after the technology
is considered mature enough for use in a certain product does product
development begin. Because the cost of developing new and breakthrough
technologies can be high, funding typically comes from the corporate
level rather than from a single product line unit, enabling the
company's product lines to manage only product development risk, not
technology risk as well.
The central focus of this report is on how the lab and the product line
communities work together to solidify the final steps of technology
transition. Figure 3 depicts the general flow of technology development
and where technology transition resides in the process.
Figure 3: General Flow of Process Leading Up to Technology Transition:
[See PDF for image]
Source: GAO analysis and presentation of leading companies' practices.
[End of figure]
This report touches briefly on strategic planning, which precedes
technology development. As the lab community identifies and develops
high-priority technologies during the technology development phase,
product line managers develop the business case for a new product by
identifying the market potential of the new product and using systems
engineering to set product requirements. This report does not focus on
these product line activities or on product development.[Footnote 7]
Strategic Planning Is a Critical Precursor to Successful Transition:
Strategic planning--the effort to identify desirable technologies and
prioritize resources--is an important early step in a company's ability
to eventually deliver the highest-priority technologies to various
product lines. Leading companies organize their research and
development activities into technological "thrusts", or competencies
that represent the core markets of their businesses. 3M and the other
companies we visited undergo strategic planning at least annually, and
this process enables corporate management to conduct portfolio
analysis, identify long-term market needs, and match the projects in
each thrust area to market needs. Eventually, managers determine which
projects appear to be relevant and feasible, which ones are applicable
for which products, whether the right projects are getting the right
resources, whether the company wants to be first to market, and whether
the final products should be released to the marketplace as soon as
possible or several years down the road. Managers may decide to
establish new thrust areas as new ideas come to light, rely on outside
suppliers for some technology, or hire new people to fill technology
voids. Projects that no longer are relevant or feasible are eventually
terminated. This type of strategic planning is critical to ensuring
that the right technologies ultimately transition to the right product
line in an economical and timely way.
Each company we visited funds technology differently, however, all
ensure that funding for early technology projects is protected at the
corporate level and not immediately beholden to product lines. 3M, for
example, has 17 technological thrust areas, and the projects are
directly funded with seed money from the corporate level. IBM receives
the majority of its funding from the corporate level. IBM labs also
receive and manage funding from product lines for specific projects.
Both Motorola and Boeing require business units to fund a portion of
lab costs each year based on their historical usage of lab resources,
but the labs have freedom to use those funds in line with corporate
strategy. Decisions are made at least annually on the composition of
projects in the portfolio so it includes the most relevant and feasible
projects.
Leading Companies Use Gated Reviews to Validate Readiness for
Technology Transition:
After technology projects are selected for funding, they enter the
development "pipeline" where a gated process is used to manage and
oversee technology exploration, development, and transition. At each
gated review, lab managers assess technology progress and ensure that
certain criteria are met before technologies can enter the next stage
of development. The final phase is dedicated to technology transition
activities. The number and names of the gates vary by company, but the
type of information collected and knowledge obtained are similar. For
example, 3M uses a three-gate process, Boeing has a four-gate process,
and Motorola has a five-gate process. Regardless of where the funds
came from--a corporate or a product line unit--labs are responsible for
managing, overseeing, and using the money to fund technology projects
until the projects have transitioned to a product line. Figure 4
generally depicts the technology development gates that companies use,
lists types of deliverables expected during each gate, and shows who
provides funding.
Figure 4: Generalized Depiction of Deliverables and Funding under Gated
Process:
[See PDF for image]
Source: GAO analysis based on Boeing Commercial Airplanes, Motorola,
and 3M process.
[End of figure]
Explore gate: Lab technologists turn technology proposals into viable,
executable projects that ideally will meet future market needs, while
lab managers determine the amount of resources they need to invest in
the projects. Funding goes to projects that are deemed relevant. Prior
to the gated review, technologists deliver to lab managers a
preliminary assessment of the competitiveness of the technology and a
road map for completion. Technologists must address key deliverables
related to such areas as manufacturing, intellectual property,
marketing, life cycle management, and plans for the next gate.
Develop gate: Technologists develop prototypes of the project and
measure performance for relevancy and feasibility on an eventual
product. Technologists deepen their understanding of the technology,
refine the technology solution, identify the most attractive market
segments for introducing the technology, and select a product line that
will incorporate the technology into a new product. 3M and Motorola
require product line commitment to transition a technology before the
gated review draws near. This prevents labs from wasting valuable time
and resources developing technologies that product lines do not want.
Projects that do not gain product line commitment will either be
terminated or go through a different process to demonstrate their
relevancy and feasibility. Motorola leadership, for example, has a
special program called an early stage accelerator under which selected
projects can obtain funds to build additional prototypes to demonstrate
the value of technology to product line managers or potential
customers. Senior lab managers carefully monitor these projects through
quarterly reviews to determine how they are progressing. If the project
is not making sufficient progress, the project is quickly terminated so
resources can be spent on other projects.
Transition gate: Technologists demonstrate a prototype in an
operational environment. The product line maintains a "customer" role
until managers are confident that the technology will work in the
intended product. Then gradually, the responsibility for funding and
further developing the technology shifts from the lab to the product
line. This shift in responsibility requires up-front and continuous
planning by both the lab and product line communities to ensure a
smooth transition. As shown in figure 5, companies we visited plan for
technology transition to occur prior to program start. This provides
product line managers sufficient time to gain additional knowledge
about a technology's attributes as they are maturing it to its final
form, fit, and function. Product line managers, who concurrently have
been working on the business case for the product, are able to validate
that the technology can be integrated into the preliminary product
design. In addition, they can develop more reliable product development
cost and revenue estimates before they are locked into needing this
technology as a product feature.
Figure 5: Linkage between Technology Development and Product
Development:
[See PDF for image]
Source: GAO analysis based on leading companies' processes.
[End of figure]
During the transition phase, labs and product lines must complete a
number of activities for transition to go smoothly. For example, labs
must demonstrate that the technology meets product line cost, schedule,
and performance requirements. In addition, production costs must be
identified and acceptable to the product line. According to 3M
officials, past experience has shown that costly manufacturing is a
major reason for product line managers deciding not to transition a
technology. Labs must also address intellectual property concerns, a
step that is crucial to the company's ability to be a market leader.
Product lines must address any people or organizational issues, such as
the transition of jobs and training requirements that may result from
using the new technology. They must also work out any agreements with
the labs for on-going support. At the end of the phase, technical
documentation related to the technology is transitioned from the labs
to the product line.
Boeing Commercial Airplanes[Footnote 8] assesses the extent to which
these activities, as well as others, have been completed to determine
whether a particular technology is ready to transition. The information
is then summarized on a scorecard that lab and product line managers
can use to quickly identify areas that need additional attention. The
scorecard is updated continually and measures a technology's readiness
from a business and production standpoint as well as its technological
readiness. Boeing's labs have three phases for technology development,
which they call discovery, feasibility, and practicality, plus a
technology transition phase. Each technology is evaluated in 10
readiness categories, and bars are plotted horizontally across the
scorecard to indicate how much objective evidence exists for technology
readiness. Once a technology has demonstrated full readiness in all 10
categories, it is ready to be transitioned. Figure 6 shows a notional
picture of a technology's readiness at one point in time. Because the
hypothetical technology has reached full readiness in only five
categories and is halfway through transition in one category, the
technology is not ready for transition. The lab and product line would
have to address issues involving readiness categories 3, 4, 6 and 9
before transition can begin or the technology is in jeopardy of not
being applied to a product.
Figure 6: Notional Boeing Technology Maturity Scorecard for a
Hypothetical Technology:
[See PDF for image]
Source: GAO analysis based on The Boeing Company's scorecard.
[End of figure]
Technology Transition Is Bolstered by Formal Agreements, Relationship
Managers, and Metrics:
Companies we visited use three tools to aid transition, including
technology transition agreements, relationship managers, and metrics.
Technology transition agreements are formal documents that detail the
specific cost, schedule, and performance attributes of the technology
that labs must demonstrate before transition can occur. Relationship
managers address the details and issues surrounding transition, and
metrics allow managers to identify the effectiveness of their
technology development and transition processes and make adjustments
when necessary. These tools require the active involvement of the labs
and product lines to ensure successful transition of technologies to
new products.
Technology Transition Agreements:
Labs and product lines use technology transition agreements to
facilitate each technology's transition to product development. What
the agreements specify varies by company but typically consists of
specific technology and business readiness metrics, such as cost,
schedule, and performance characteristics that labs must demonstrate
for product line managers to agree to accept the technology. As figure
7 shows, the agreements should answer some basic questions.
Figure 7: Questions That Should Be Answered in Technology Transition
Agreements:
Is it real?;
Is it relevant?;
Is it marketable?;
Where will it transition?;
Do we have product line support?.
Source: GAO.
[End of Figure/Text Box]
These formal agreements may also include identification of product line
resources needed to transition the technology, such as nonrecurring
costs to further mature the technology, as well as consideration of
recurring manufacturing costs associated with integrating the new
technology on the product. Metrics collected in the agreements are used
by product line managers to manage technology risk. For example, if the
labs cannot develop needed technology within cost and schedule
parameters or with specified performance characteristics, the product
lines can terminate the agreement and go with an alternative
technology.
At Motorola, agreements enable technology project leaders to customize
their work for a particular product line's needs. Product lines may
request that the labs identify alternative technologies for a
particular product, produce a detailed report about a specific
technology, or conduct various tests to demonstrate the relevancy or
feasibility of a technology. Each of these items becomes a
"deliverable" in the agreement. 3M uses transition agreements only for
technologies that are expected to go into a product. 3M's agreements
incorporate many of the same metrics used by Motorola, including
feasibility, relevancy, and application of the technology. In addition,
agreements include an assessment of the product line's ability and
commitment to transition technology. For example, they evaluate a
product line's resource constraints that could inhibit a technology
from transitioning, such as asking if the technology is too expensive
or if manufacturing it would be too costly. 3M officials told us that
some agreements include loaning key lab technologists to the product
line for a period of time so product line teams can maintain momentum
after the lab has signed off and moved on to developing technology for
other parts of the company.
Relationship Managers:
3M, IBM, and Motorola use lab and product line relationship managers to
smooth transition. Relationship managers foster effective transition
practices by preventing the labs from pushing technologies that product
line managers do not want and by preventing product line managers from
pulling immature technologies from the labs. A Motorola official
referred to relationship managers as the most important communication
tool because communication occurs more frequently, thus allowing
problems to be identified and addressed more quickly.
Motorola designates key people at three different levels in both the
labs and the product line to serve as relationship managers. As a
technology is matured and demonstrated, communication intensifies and
additional levels of relationship managers become involved. Figure 8
depicts how Motorola's relationship managers communicate with each
other within the lab or product line and with their designated
counterparts in the other community.
Figure 8: Communication Flow for Motorola's Three Levels of
Relationship Managers:
[See PDF for image]
Source: Motorola; GAO (analysis and presentation).
[End of figure]
Executive managers in Motorola's labs and product lines are responsible
for interfacing with each other on a periodic basis. Altogether,
Motorola has eight executive managers--four in the labs and four on the
product line side. Motorola officials told us that this number provides
a one-to-one match between the labs and the product lines. Lab
executive managers are responsible for ensuring product line needs are
identified and new technology projects are started or existing projects
are reprioritized to meet those needs. Their counterparts have the
final word on what priority each technology project has with respect to
the needs of the product line. Lab and product line executive managers
are required to sign off on key technology projects and milestones for
the current year. In addition, they try to remove any roadblocks within
their own units and work with their counterparts to address any
roadblocks between the two communities.
Motorola considers liaisons the most critical in the process. Again,
there are four liaisons in the labs and four on the product line side.
They are the primary interface for coordination, collaboration, and
communication during technology development and transition. Liaisons in
the lab have broad oversight of technologies being developed and share
information about technology breakthroughs with their counterparts on
the product line side, and remove roadblocks for lab technologists.
These lab liaisons work intimately with their product line counterparts
to approve technology transition agreements and assess technology
readiness. The lab liaisons oversee 40 to 60 technology transition
agreements at any one time. Liaisons on the product line side are
responsible for providing information about the changing needs of the
product lines on a more real-time basis. They determine product line
needs and priorities during the annual planning process and remove
roadblocks for technologists on the product line side. Lab and product
line liaisons are incentivized through their annual performance
assessments and pay increases to work together to ensure the successful
transition of technologies.
The most direct and constant communication is between the lab's
technologist, who developed the technology, and the product line's
technologist, who is responsible for maturing the technology for
inclusion into the product. These two technologists stay in continuous
contact because they are the ones who have the most working knowledge
about the technology. The lab technologist is expected to spend as much
time as needed to make sure that transition happens as smoothly as
possible. While the lab technologist does not become an official asset
of a product line, he or she might have to spend a period of time
working in the product line's development lab.
Metrics:
Leading companies use product metrics--such as weight, power, and
reliability measurements--to assess the readiness of transitioning
technologies and process metrics--such as profit growth and cycle time-
-to gauge the impact of their technology development processes and
identify areas for improvement. The companies analyze data gained from
the use of these metrics to evaluate how well they deliver on what is
promised, better understand the value of their respective science and
technology activities, and identify cases of inefficient investment in
technologies or underutilization of lab technologies. Table 2 provides
a composite example of metrics used at the companies we visited and the
value of the metrics to management.
Table 2: Metrics Used by Leading Companies to Assess Lab Projects and
Processes:
Categories of metrics: Project: Technology-specific;
Examples of metrics: Nonrecurring development costs Scheduled delivery
Recurring manufacturing costs Performance characteristics;
* Size;
* Weight;
* Power;
* Reliability;
Head count;
Use of the metrics: Allows lab and product line managers to assess the
status of technology development and whether the technology meets the
needs of the product. If technologies do not meet agreed-upon goals,
the technology project may be terminated or the product line manager
may decide to include it on a future product.
Categories of metrics: Process: Status;
Examples of metrics: Number of ongoing projects;
Number of projects with a technology transition agreement;
Number of projects completed by labs;
Number of technologies transitioned;
Number of projects terminated;
Use of the metrics: Provides lab managers information on how many
technology projects transitioned, were terminated, and are still
ongoing. Companies expect that almost all technologies that make it to
the final stages of technology development will transition. If they
experience a lower transition rate than expected, officials will
examine their processes to determine what changes are necessary to
improve transition or determine why the project was not terminated
earlier.
Categories of metrics: Process: Timeliness;
Examples of metrics: Development cycle time;
Percentage of tasks on time;
Task slippage;
Time to market;
Use of the metrics: Measures the amount of time it takes labs to
develop technologies. The metrics allow lab managers to identify and
focus on projects that are moving slower than expected. A lab project
may be terminated or additional resources may be allocated to speed up
development. Use of the metrics allows product line managers to decide
whether a technology will be ready in time to include on a given
product.
Categories of metrics: Process: Impact;
Examples of metrics: Number of technologies commercialized;
Number of multiple transitions;
Return on investment;
Profit growth;
Market share growth;
Orders captured;
Cost reduction;
Number of patents/influential papers;
Customer satisfaction;
People rotation;
Use of the metrics: Provides lab and corporate managers feedback on the
market impact of their technology investments in terms of revenue and
market share. The metrics also provide information on product line
satisfaction of lab performance. Satisfaction survey results are a
useful tool for identifying development and transition problem areas
that need management attention.
Source: Interviews with leading companies (data); GAO (presentation and
analysis).
[End of table]
Motorola's labs use a suite of metrics, many of which are shown above,
to monitor technology projects and lab performance. For example, the
company tracks the estimated and actual development time and costs for
each project to determine estimation accuracy. In addition, it
identifies and tracks the number of lab and product line people
(headcount) needed for development and transition. These metrics are
not treated with the same rigor as metrics that are used after product
development begins. Corporate managers understand that technology
development must be managed with more latitude to accommodate
calculated risk taking. In addition, Motorola asks each product line to
fill out satisfaction surveys twice a year to assess lab performance.
Because relationships are at the heart of the process, the product
line's perceptions are of paramount importance, making internal
customer satisfaction a key metric. A Motorola official indicated that
satisfaction surveys are a ubiquitous part of the Motorola culture. Not
only do they help the labs improve, but they help the company improve
overall, the official said. The surveys also provide compelling
anecdotal information about performance problems that need to be
addressed by certain labs.
In addition to technology-specific metrics, Boeing tracks the number of
technologies that were actually integrated into products. While the
intent is that all completed technologies will make it into a product,
this does not always happen because of changes in market requirements,
timing, or funding constraints. Boeing also has metrics that assess the
technology's impact on orders for new airplanes and on its ability to
reduce manufacturing costs. The labs, for example, have a
responsibility for improving the way Boeing designs and builds its
products. As such, they have goals for reducing recurring and
nonrecurring costs and cycle time. Finally, Boeing uses a metric that
encourages the transfer of people, along with the technologies, to the
product line side. The company tracks the rotation of people from its
labs to its product lines specifically to improve its transition
processes and to refresh staff with "program people." As a result,
company officials believe they can better align their labs to their
product lines strategies.
Company officials also told us that, similar to DOD, they have
struggled to assess return on investment for technologies they develop.
This is because technology can undergo a metamorphosis after it leaves
the labs and can be applied to multiple products or altered before
going into the intended product. Company officials said they are
actively trying to track technology utilization and the impact their
technology investments have had on company revenues. 3M has a
technology database it uses to track each project it funds. The
database contains cost, schedule, and performance data and summarizes
other information, such as how long a project took to complete and lab
and product line funding used to mature the technology. 3M then
compares the cost information with worldwide sales, tracked through bar
codes, to determine its return on investment for a particular
technology. Company officials indicated that there are still problems
with this methodology for estimating return on investment and that they
are continuing to refine their approach.
DOD Lacks Breadth and Depth of Techniques That Leading Companies Use to
Effectively Transition Technologies:
DOD has taken some steps over the past few years to improve its
technology transition processes, but the practice of accepting high
levels of technology risk at the start of major weapon system
acquisition programs continues to be the norm. This shortcoming is a
major contributor to DOD's poor cost and schedule outcomes. Many of
DOD's problems can be attributed to deficiencies in strategic planning
for critical technologies, processes for technology development and
transition, and tools that support transition. A recent Defense Science
Board report states that DOD is not as well positioned as it should be
from a strategic standpoint to meet the challenges and exploit the
opportunities offered by technology. The report identified several
opportunities for improvement at the Director, Defense Research and
Engineering level (DDRE)[Footnote 9] to help the department jointly
identify, prioritize, develop, and deliver the technologies most
relevant and critical to meeting weapon system requirements in a timely
manner. DOD's technology development process is undisciplined and lacks
criteria for maintaining a close connection between fledgling
technologies and the products that will need them to meet the
warfighter's future needs. As a result, technologies are often not
ready when they are needed, and acquisition programs pull the
technologies into their programs too early, leading to inefficiency
during product development and cost and schedule increases. DOD's
process for transitioning technologies to product development is funded
and managed by its acquisition community, the opposite approach to that
taken by the companies we visited.
We identified some initiatives within DOD's S&T community that emulate
some of the tools we found in the commercial world. They hold promise,
but must be accepted, improved, and replicated significantly more than
currently to have a positive impact. For example, the military services
are using technology transition agreements and have established boards
to select and oversee some of its technology portfolio. Also, DARPA
uses relationship managers to expedite the efficient transition of
technologies to products and DOD has established other programs that
institutionalize some best practices. The collection and use of
meaningful metrics, however, remain a problem.
On the basis of our previous review of 52 major weapons programs, we
found that DOD's typical path involves starting programs with immature
technologies and concurrently working on technology development and
product development. Figure 9 is a depiction of this path.
Figure 9: Path that DOD Routinely Follows for Technology Development
and Product Development:
[See PDF for image]
Source: DOD (data); GAO (analysis and presentation).
[End of figure]
Strategic Planning Affects DOD's Ability to Meet Warfighters' Needs:
DOD has an annual strategic planning process that involves the
development of several plans at the corporate level and within the
services and defense agencies for determining how to invest its S&T
funding, which amounted to about $13 billion in fiscal year 2006.
Despite these efforts, a recent Defense Science Board report[Footnote
10] stated that DOD is not as well positioned as it should be at the
DDRE level (the corporate level) to meet the challenges and exploit the
opportunities offered by technology. The report identified several
opportunities for improvement. Until improvements are made, it is
likely that the there will be strategic gaps and overlaps in technology
coverage as the services and agencies develop their own approaches to
meet critical warfighter needs.
Similar to private industry, the department goes through an annual
strategic planning process led by its corporate level. As part of its
responsibilities, DDRE develops the Defense Science and Technology
Strategy, which serves as the foundation for DOD's science and
technology strategic planning process. The strategy identifies five
generic technology thrust areas--information assurance, battlespace
awareness, force protection, reduced cost of ownership, and maintaining
basic research--that have high priority in the department, and is
supported by four other documents, including the:
* Basic Research Plan, which presents the DOD objectives and investment
strategy for DOD-sponsored basic research performed by universities,
industry, and service laboratories;
* Defense Technology Area Plan, which presents the DOD objectives and
the strategies for applied research and advanced technology development
investments;
* Joint Warfighting Science and Technology Plan, which takes a joint
perspective across the applied research and advanced technology
development plans to ensure that the science and technology program
supports priority future joint warfighting capabilities; and:
* Defense Technology Objectives, which identify specific technology
advancements that will be developed or demonstrated, the anticipated
date of availability, and specific expected benefits.
Together, these documents, as well as the supporting S&T plans of the
military services and defense agencies, are supposed to provide the
framework for decisionmaking throughout the science and technology
community.
However, a recent Defense Science Board report states over time there
has been a relative decline in the influence of DDRE at the corporate
level on strategic matters. In the 1960s and 1970s, the corporate level
was more proactive and provided high-level direction that drove several
decisive technological developments, including stealth; standoff
precision strike; and tactical intelligence, surveillance, and
reconnaissance systems that have transformed U.S. military
capabilities. Since the 1980's DDRE has used a decentralized management
approach, relying on the services and agencies to determine and
prioritize the most needed technology projects. The report states that
as a result, the department is not wellpositioned to implement new
operational capabilities needed for future warfighters, including:
* identifying and tracking terrorists,
* addressing commercialization and globalization issues,
* rapidly evolving technologies such as bio-and nanotechnologies, and:
* identifying the proper mix of short-and long-term projects to work
on.
One of the recommendations included in the report is for the
Undersecretary of Defense (Acquisition, Technology, and Logistics) to
develop a strategic technology plan and that DDRE be tasked with
assuring that all research and development organizations are
implementing DDRE's strategic technology guidance. The board also
believes DDRE needs to be more involved in strategic challenges related
to (1) gathering and nurturing technology from a variety of sources,
(2) developing and exploiting technology to enable new disruptive
capabilities; (3) identifying and countering disruptive capabilities
developed by adversaries using readily available or advanced
technology, and (4) ensuring an adequate level of long-term research
for DOD needs. Without effective corporate level leadership, warfighter
needs are addressed in a decentralized, uncoordinated manner, thereby
increasing the risk that the department will not fulfill these needs.
DOD Does Not Use a Disciplined, Gated Process to Test for Relevancy,
Feasibility, and Transition Readiness:
DOD's 5000 series acquisition policy specifies that technology
development should be separated from product development and that a
project shall not exit the technology development phase until the
technology has been demonstrated in a relevant environment. This is in
line with the practices we found at leading companies, with the
exception that the companies require technologies to be demonstrated in
an operational environment before program start, which is a higher
degree of readiness. However, the department lacks a structured, gated
process for managing technology development and transition, as well as
criteria that would allow decision makers to know when technology is
ready to progress from the technology development environment into an
acquisition program to begin product development. As a result, the
services continue to launch new programs with immature technologies,
and acquisition programs take on technology development
responsibilities, an activity that is considered too risky for
commercial companies we visited. The following figure shows where the
technology development phase occurs in DOD's acquisition process and
the entrance and exit criteria for that phase.
Figure 10: Criteria for DOD Technology Development Phase:
[See PDF for image]
Source: GAO analysis and presentation of DOD processes and practices.
[End of figure]
As shown in the figure above, DOD has two phases prior to program start
(also referred to in DOD nomenclature as milestone B). The first is the
concept refinement phase, when acquisition programs refine the initial
concept and develop a technology development strategy that is supposed
to guide activities during the technology development phase. According
to the acquisition policy, the strategy should include:
* a discussion of the planned acquisition approach, including a summary
of the considerations and rationale concerning the approach;
* a discussion of the planned strategy to manage research and
development;
* a complete description of the first technology demonstration; and:
* a test plan.
The policy, however, does not address the role of the S&T community in
designing or supporting a technology development strategy. And
according to S&T officials, their role in this phase is minimal. We
recently reported that DOD skipped a formal milestone meeting that
should take place at the end of the concept refinement phase, referred
to as milestone A, for 80 percent of the programs we reviewed.[Footnote
11] This inhibits the S&T and acquisition communities' ability to
create a realistic plan for developing and maturing needed technologies
prior to program start and executing a plan once the program begins.
During the technology development phase, the acquisition policy calls
for DOD to focus on the development, maturation, and demonstration of
the technologies needed for the capability under consideration. To exit
this phase, technologies should be demonstrated to be sufficiently
mature. DOD defines this as demonstrating technologies in a relevant
environment. (See app. IV for definitions of technology readiness.)
When comparing the DOD process with that used by commercial companies
we visited, we identified two major differences. First, although DOD
policy states that the S&T community "shall enable rapid, successful
transition — to useful military products," there is no defined
transition phase with criteria to facilitate assessment of a
technology's readiness to transition. Instead, the services have senior-
level boards that review projects on an annual basis to determine if
they are on track relative to cost, schedule, and performance goals set
out for the program and rely on a technology readiness tool to gauge
development progress. The reviews do not include a formal assessment of
many of the technical and business criteria contained in the Boeing
scorecard, such as determining if the costs, benefits, and risk are
well understood and technology is affordable. As a result, program
managers often pull a technology from technology developers before the
program manager has the opportunity to validate that the technology can
be integrated into the preliminary product design and to develop good
product development estimates prior to the start of system development.
As stated earlier, commercial companies we visited had a dedicated
phase at the end of the technology development process for shifting
technology responsibilities to their product lines. We recently
reported that almost three-fourths of the programs started since the
acquisition policy was revised in 2000 began with critical technologies
that were not ready for product development.[Footnote 12] Seven of the
nine programs we reviewed more indepth, about 80 percent, were approved
to begin development even though program officials reported that
technologies were below readiness levels required for entering product
development. This included programs like the Future Combat System and
the Joint Strike Fighter.
We found DOD generally views immature critical technologies at the
beginning of development as an acceptable risk as long as there is a
plan to mature the technologies by the time the program reaches its
design readiness review. In effect, the department views risk
management plans as an acceptable substitute for demonstrated
knowledge. For example, the Navy's Multi-Mission Maritime Aircraft
program had none of its critical technologies mature at program
initiation. Instead of holding the program to the acquisition policy
criteria for entering development, the decision maker simply directed
the Navy to work with the Office of the Secretary of Defense to
implement risk mitigation and technology maturation plans during the
integration phase of system development.
Second, under DOD's current funding structure, the transition of
technology--which should occur prior to the beginning of product
development and milestone B--is funded and managed by acquisition
programs. This contrasts with the approach used by commercial
companies, where the lab manages and funds these activities. Commercial
firms find that holding their labs accountable for the management and
funding of technology as it transitions to a new product forces them to
deliver more quickly and efficiently and allows the product lines to
focus on product development and the risks associated with it. Figure
11 illustrates the difference in responsibility.
Figure 11: Accountability for Management and Funding of Technology:
[See PDF for image]
Source: GAO analysis and presentation of landing companies' and DOD
practices.
[End of figure]
As shown above, in the commercial companies we visited, product
developers are allowed to act like customers for emerging technologies;
they are not required to accept, manage, and fund technology risk. This
significantly improves the chances of their products reaching the
market quickly, at predictable cost, and with high quality. In DOD,
major weapon system acquisition programs pull technologies that are not
yet ready for a product in order to meet that product's requirements.
The S&T community, although still called upon to review technology
readiness, has no funds at stake and is no longer responsible for the
risk from technology at that point. This is a major contributor to the
significant cost overruns and late deliveries of major weapon systems
to the warfighter in recent years.
DOD Is Adopting Transition Tools, but Use Is Not Widespread:
DOD is using several tools we found were also being used by commercial
companies to facilitate the transition of technology to weapons
programs. For example, the services are using technology transition
agreements for some of their technology projects, DARPA is using
relationship managers to address transition issues, the services have
established boards to oversee and manage a portion of their technology
portfolios, and DOD has several new programs, including the Joint
Capability Technology Demonstration program to speed a technology's
transition to a weapon system. However, because of the newness or small
amount of funding associated with these tools, widespread use has yet
to occur. We also found that DOD is using technology-specific and
status metrics, but does not have sufficient measures in place to
assess the impact of their technology investments or technology
transition processes.
Technology Transition Agreements:
The services have recently begun using technology transition agreements
to formalize technical expectations labs must demonstrate in order for
acquisition programs to transition technologies into their programs.
DOD science and technology officials believe the agreements are a
useful way to hold the technology developers accountable and gauge lab
progress toward meeting technology specifications. We are encouraged by
their use of agreements, particularly in the Navy. Agreements we
reviewed, however, did not contain some of the information or metrics
commercial companies believe is valuable to track, and use thus far has
been limited.
The agreements we reviewed contained some of the same elements included
in agreements used by leading companies we visited, such as a
description of the technology project, key technology developer and
weapon system personnel associated with the project, and specific
performance characteristics that the lab must meet for transition to
occur. In addition, they identify the amount of funding acquisition
programs will have for transition and when that funding will be
available. Unlike the leading companies we visited, however, these
agreements did not typically require the technology developer to
demonstrate cost metrics for the technology to be included in a weapons
program. Commercial companies, for example, include an assessment of
manufacturing costs that could be expected if a technology were to be
included on a new product and they usually demand prototypes of the
technology as demonstration of readiness to transition. A recent
Defense Science Board Report highlighted the importance of addressing
manufacturing concerns during technology development. Excerpts are
shown in figure 12.
Figure 12: Excerpts from a Defense Science Board Task Force Report on
the Manufacturing Technology Program:
"Immature technologies and manufacturing challenges have a significant
impact on DOD's ability to rapidly and affordably transition technology
to the war fighter."; "S&T program managers often believe that
affordability and manufacturing issues are not relevant concerns in 6.3
programs, focusing instead on fabrication of test and evaluation and
prototype articles. But this line of thinking leads to higher costs
later in a program, when manufacturing concerns are addressed after
technical designs are considered 'ready.' "; "In order to achieve the
objective of lower cost equipment, manufacturing concerns must be
addressed earlier in the program life cycle. Production and support
costs need to become a component of key technical design requirements,
before the final stages of development when technologies are released
for prototyping.".
Source: Defense Science Board study (data); GAO (presentation and
analysis).
[End of Figure/text Box]
We also found that the services' use of technology transition
agreements has been very limited. For example, we found that the
services have a combined total of 224 applied and advanced technology
projects that they have identified as candidates for transition, of
which 146--or about 65 percent--have technology transition agreements.
The Navy accounted for the greatest percentage, with 90 of its 115
projects having an agreement, almost 80 percent. However, there are
hundreds of other military services applied and advanced technology
research projects that were not selected as candidates where agreements
may also be useful. As stated earlier, commercial companies we visited
had agreements for nearly all technology projects. The agreements were
updated at least annually or sooner if particular tasks were completed.
Lab officials use metrics included in the agreements, as well as other
criteria, to determine if the project should be continued.
It should also be pointed out that while technology transition
agreements are useful tools for firming weapons program commitment to
transition, they do not guarantee transition success. For example, a
Navy official told us that about one-third of the projects that had
been expected to transition in fiscal year 2005 did not transition for
the following reasons:
* The technology did not meet the cost parameters required for
transition to occur.
* Weapon system requirements changed, forcing changes to the original
agreement.
* Program offices did not identify dollars in its budget to transition
the technology.
* A program office decided the technology was too risky compared with
current hardware in production.
Air Force and Army officials told us they do not track information on
why their technologies do not transition. However, they have
experienced similar problems as the Navy. They also stated that some
lab technologies do not transition because prime contractors decide to
use technologies developed in-house, even though DOD technology
developers met the metrics included in the transition agreements.
Because agreements are usually established between the technology
developers and program offices prior to the selection of prime
contractors, there is no assurance that the technologies will
transition. Even in cases where a prime contractor is known, such as
for ongoing development programs, the prime contractor is not a party
in the agreement.
Relationship Managers:
With the exception of DARPA, DOD does not use relationship managers in
the same manner as leading private companies. According to an Air Force
lab official, relationship managers market technologies being developed
by the labs or gather data about ongoing projects for senior lab
management. Most communication about technology transition in DOD takes
place through integrated product teams or during annual reviews of
technology projects by the senior-level oversight boards for each of
the services. Use of relationship managers for these purposes are
helpful, but the managers do not necessarily serve as points of contact
within the labs and acquisition communities, do not devote time toward
efficiently transitioning technologies to multiple weapon system
programs, and do not help identify and address systemic transition
problems.
Within DARPA, senior officers, called operational liaisons, focus on
marketing and transitioning DARPA-sponsored technologies. According to
the DARPA director, the liaisons have been very helpful with
transitioning technologies because they are well practiced at using the
command chain of their respective services and finding the right
service contact at the right time. The liaisons:
* provide operational advice for planning and strategy development;
* provide an understanding of service perspectives, issues and needs so
that potential customers can be identified and effective agreements can
be written;
* draft and coordinate agreements between DARPA and the services; and:
* direct technology insertion in the services.
Figure 13 describes the impact that operational liaisons have had on
transitioning a DARPA-sponsored program called Boomerang. We believe
that DARPA's approach could serve as a model for how the military
services might establish more formal roles for communication between
the S&T and acquisition communities.
Figure 13: DARPA, a Success Story:
The DARPA director credits operational liaisons for the quick
transition of the Boomerang, an acoustic shot-detection system, from
the lab to troops in Iraq. DARPA developed the system in response to
feedback from Iraq that convoys were being engaged by snipers yet
remained unaware of sniper attacks until a windshield was broken, a
soldier was hit, or a vehicle was visibly damaged upon inspection at
the end of the convoy mission; Within 60 days of an urgent Army
request, DARPA fielded the first Boomerang system. But DARPA's director
said the system did not hold up well in the extreme weather conditions
and under wartime conditions. As Boomerang II was being prepared for
fielding, the director said the operational liaisons helped craft a
more realistic concept of operations, training package, and logistical
support package to ensure that Boomerang II not only was
technologically ready for combat but was properly supported with spare
parts, maintenance facilities, maintenance personnel, training, and
lessons-learned feedback to DARPA and the Army. The liaisons also
ensured that the Army acquisition community was alerted to Boomerang
II's deployment so product developers would be ready to evaluate the
final product for movement into the more traditional acquisition
process.
Source: DARPA (data); GAO (presentation and analysis).
[End of Figure/Text Box]
DOD Programs to Aid Transition:
The military services and the Office of the Secretary of Defense have a
variety of programs to help transition technologies to weapons systems
or directly to the warfighter. These programs, some of which are
relatively new and others that have been around for several years, have
met with some success. However, these programs represent a small
portion of $13 billion DOD spends on science and technology
development. As such, they cannot single-handedly overcome transition
problems, but rather demonstrate various ways to ease transition.
In recent years, each of the military services has established senior-
level boards to oversee technology programs that include advanced and
in some cases applied research projects. This includes the Air Force's
Advanced Technology Demonstration program, the Army Technology
Objectives program, and the Navy's Future Naval Capabilities program.
The boards, which are comprised of representatives from the lab,
acquisition, and warfighter communities, are responsible for selecting
projects to be developed, allocating funding to those projects, and
reviewing the projects' progress on an annual basis. The boards
emphasize transition planning and can address obstacles to successful
transition. According to officials, these programs represent about $1.3
billion of DOD's S&T budget.
The Advanced Concept Technology Demonstration program and the newly
established Joint Capability Technology Demonstration program were
initiated by DOD as a way to get technologies that meet critical
military needs into the hands of users faster and at less cost than by
the traditional acquisition process. Under these programs, military
operators test prototypes that have already been developed and matured
in realistic settings. If they find the items to have military utility,
DOD may choose to buy additional quantities or just use the items
remaining after the demonstration. Fiscal year 2006 was the first year
of a 3-to 5-year period where the current Advanced Concept Technology
Demonstration program will be phased out in favor of the new Joint
Capability Technology Demonstration program. Department officials
believe the new joint program offers improvements over the earlier
program in that capabilities will be demonstrated 1-2 years earlier,
there is a greater focus on combatant command needs during the
selection process, and the Office of the Secretary of Defense provides
significantly more funding during the first 2 years of the
demonstration project.
A big difference between the two programs is that the new joint program
is expected to provide a better path for the transition of technologies
because it includes funding for both advanced technology development
and advanced component development and prototypes. The Advanced Concept
Technology Demonstration program only includes funding for advanced
technology development. It must rely on the acquisition community to
identify advanced component development and prototype funding for
transitioning the technologies. An additional benefit is that the
Office of the Secretary of Defense is partnering with the Naval
Postgraduate School to conduct business case analysis for completed
demonstration projects. This type of analysis is expected to aid
decision makers in evaluating alternative approaches to the allocation
of scarce resources competing for transition funds.
The Manufacturing Technology Program is aimed at quickly identifying
and solving production problems associated with technology transition.
It focuses on the needs of weapon system programs for affordable, low-
risk development and production. For example, one project, which was
given $730,000, was geared toward improving the reliability and
strength of large-diameter fasteners used to attach various components
on the Seawolf and Virginia Class submarines. Corrosion concerns
required that the existing fasteners be replaced at periodic intervals
to preclude catastrophic failure. Navy and commercial companies
evaluated a wide variety of materials for strength and corrosion
resistance to determine the best candidate material and then adjusted
the material manufacturing process to obtain the required strength and
toughness levels to ensure the fasteners could be produced without
extraordinary measures or a deterioration of the material properties.
Among other things, program officials expect the project to result in
cost avoidance of $1.1 million per fielded submarine per year and
improved reliability.
There are other, smaller programs that also focus on transition. Two of
these are the Foreign Comparative Testing Program, which focuses on
identifying, evaluating, and procuring technologies that have already
been developed and tested in other countries, and the Technology
Transition Initiative, which focuses on speeding the transition of
technologies developed by DOD's S&T programs into acquisition programs.
These programs received about $37 million and $29 million in fiscal
2006, respectively. The Foreign Comparative Testing Program, for
example, successfully evaluated a South African mine-protected
clearance vehicle that will protect soldiers from the effects of
landmine explosions during route clearance operations. As of June 2006,
61 of these vehicles have been delivered to the Army, Navy, and Marine
Corps.
Metrics:
For the most part, the military services track and use only a few of
the metrics we found at commercial companies. As stated earlier, they
have some technology-specific metrics in their technology transition
agreements. In addition, they have status metrics to track some of the
on-going, completed, and transitioned projects that are funded by the
Air Force, Army, and Navy S&T communities as well as the number of
projects with technology transition agreements. However, the services
have few metrics that would enable them to gauge the impact of their
investments and the effectiveness of their processes for developing and
transitioning technology.
DOD officials told us that establishing good, quantifiable metrics to
measure transition success is difficult to do. Some of the challenges
they face include determining:
* how long to track a technology after it has transitioned,
* how to track and distinguish transition success when the same
technology is used on multiple weapons programs, and:
* how much credit to take when only portions of a technology transition
to a weapon program.
Further, DOD S&T officials do not believe that they have enough
resources to track technology once technology developers finish working
on a project. They say that it would be very labor-intensive to track
long-term measures, such as the impact of transitioned technology in
terms of cost savings and improved performance. Instead, the services
rely heavily on projected cost, schedule, and performance improvements
that are required by S&T program management as part of the project
selection process. Although progress in meeting technology expectations
is monitored throughout technology development, once technology
developers are finished working on a technology, little is done to
determine if it actually went onto a weapon system and if it is being
used in the field.
Last year, we reported that the Office of the Secretary of Defense had
difficulty tracking the impact of three small technology transition
programs it oversees--the Technology Transition Initiative, the Defense
Acquisition Challenge Program, and the Quick Reaction Fund.[Footnote
13] Nevertheless, we pointed out that there may already be readily
available starting points within the department to capture more
information regarding return on investments. For example, we pointed
out that the DOD Foreign Comparative Testing Program has established
metrics to measure the health, success, and cost-effectiveness of the
program and has a database to facilitate return on investment analyses.
Further, a study by the Naval Postgraduate School to identify metrics
for the Advanced Concept Technology Demonstration program may also be
useful to the military services for assessing transition success and
impact.
Differences in Environment and Incentives Contribute to Different
Practices and Outcomes:
There are critical differences between the environments and cultures of
private world-class companies and DOD that must be recognized before
tangible progress can be made in establishing more efficient practices
for transitioning technologies to major weapon system acquisition
programs. Examples from past initiatives serve as reminders that just
changing the mechanics of technology transition processes, without
changing the environment that determines incentives, may not produce
better outcomes. Private companies operate in a competitive environment
that demands speedy delivery of innovative, high-quality technologies
and products to satisfy market needs. If the company cannot meet those
criteria, it will cease to exist in that environment. On the other
hand, DOD operates in an environment with a complex variety of
"customers." These complex relationships often hinder the ability of
DDRE, its "corporate" component, to provide strategic leadership
similar to that of the private company. Success in this environment is
often based on a single service's ability to launch a program to
address critical needs and to secure annual funding for the program.
The challenge for DOD and congressional decision makers may not lie so
much in the "how to" aspects of technology transition as in creating
stronger and more uniform incentives that encourage the S&T and
acquisition communities to work together to deliver mature technologies
to programs.
Private firms must continually deliver innovative, reliable products to
market very quickly to prosper. The delivery-oriented environment that
private firms live in creates a need for strategic simplicity and
directness from leadership and forces product lines and labs to measure
success in terms of lower costs and increased revenue and market share.
The ability to deliver new, innovative, reliable products of high
quality to market as soon as possible drives revenue and market share.
This environment creates incentives to maintain an efficient technology
base that is focused on market needs and can efficiently transition
feasible technologies into new products, keeping costs down while
achieving greater revenues. Because commercial firms understand that
they do not succeed until a new, innovative product is delivered to the
customer, they view successful transition of technologies to products
as a critical part of their value chain. The corporation, therefore,
insists on accountability from and supports its technology developers
with a strong strategic process for ensuring that its product portfolio
is balanced. It does not want too many programs vying for scarce
investment dollars.
For example, IBM officials stated that poor strategic planning was one
of the problems the company had to address after it incurred an $8
billion loss in 1992-1993. According to company officials, technologies
no longer could be developed for the sake of development; they had to
be aligned with a product line and have market potential to be funded.
IBM labs now conduct a situation analysis that takes an internal and
external look at technologies being developed and a gap analysis to
determine where IBM might be behind in technology development.
At 3M, meeting market imperatives is critical and senior leadership has
set a goal to increase sales 5 to 8 percent annually through new
products. In this environment, the company has established a
companywide initiative referred to as 2X/3X. Generally, the goal is to
double the number of new ideas going into the product development
pipeline and to triple the market success of the products coming out of
the pipeline. Lab and product line managers are evaluated and held
accountable for the success of the initiative based upon their ability
to meet sales goals and properly resource their projects. According to
3M's 2004 annual report, the initiative is producing strong results. 3M
officials believe their culture is well aligned with this competitive
environment. For example, technologists participate in companywide
technology forums to discuss problems and share information. A
technology council, comprised of about 80 lab and technical directors,
meets monthly to share ideas, experiences, and best practices among the
labs.
At Motorola, the corporate vision is known as "seamless mobility."
Senior leaders have aligned the company's global resources--including
its $3.1 billion annual research and development budget and a worldwide
research network--to help achieve this goal. According to Motorola
officials, the seamless mobility vision has been instrumental in
uniting Motorola labs and product lines over the past 3 years toward a
common goal.
On the other hand, DOD operates in an environment that often hinders
the ability of its corporate component--DDRE--to provide strategic
leadership similar to the private company. Not only must the department
worry about national security imperatives, it must also answer to
Congress and its oversight agencies; manage a stove-piped, parochial
culture; ensure the public's trust that tax dollars are wisely and
fairly spent; and incentivize an industrial base to deliver cutting-
edge, often very risky technologies and products. This is a complex set
of deliverables by any measure. It creates an environment that makes it
difficult for DDRE to lead and has contributed to an undisciplined
strategic planning process. Success in this environment is often based
on a service's ability to launch a program to address critical needs
and to secure annual funding for the program. It is characterized by
fierce competition among the services to win scarce funding to begin
major weapon system acquisition programs, regardless of the readiness
of technologies to meet far-reaching requirements. As a result,
programs are pressured to distinguish themselves from other programs
previously developed by promising new, enhanced features such as being
faster and/or more lethal than anything else. It is very common for
these new programs to include requirements for new technologies with
overly optimistic assessments of technological feasibility, risk, and
delivery schedules. This environment and these incentives breed
uncertainty and risk and, as a result, cost overruns and delivery
delays.
Conclusions:
In DOD, delivering mature technologies to weapon system acquisition
programs at the right time continues to be a challenge. Rather than
addressing technology issues in a science and technology environment
before product development starts, acquisition programs carry
significant technology risk into product development. This brings with
it a high risk that costs will rise and deliveries to the warfighter
will be delayed. In fact, there is strong evidence that acquisition
programs that start with immature technologies encounter significantly
poorer acquisition outcomes than others. This approach is in sharp
contrast to the approach taken in the commercial world. High-performing
companies solve technology challenges in the S&T environment. To do
this, they have put in place processes and adopted techniques that are
pertinent to DOD. Strong strategic planning defines critical investment
priorities, and a structured process defines the path towards a
technology's transition to product development. This transition is
supported by technology transition agreements that hold the research
labs accountable for what they must deliver. They also include
clarification of the responsibilities the product developer has in
accepting new technologies. Metrics are used to force demonstration of
relevancy and feasibility at key points in the process and gauge the
success of individual projects and the process itself. Funding for
technology development largely comes from the corporate level, with the
research labs having responsibility for technology development until
technology is matured and transitioned to the product line. This is
critical to success, because it allows product developers to play a
customer role. They are allowed to say no to technologies that are not
ready for their programs and can focus on their job at hand--product
integration, supplier management, and quality.
DOD has adopted some of these practices. The department has begun using
technology transition agreements and relationship managers and has
initiated programs that place greater emphasis on technology transition
planning. However, the reach of these initiatives is limited, and there
is no unified, corporate approach to using them at this point. We
recognize that the environment and incentives for DOD are very
different than those of commercial firms we visited. For commercial
practices to work on a broad scale, the DOD environment must be
conducive for applying such practices. DOD senior leadership is a
critical factor in providing this direction and vision as well as in
maintaining the culture of the organization. The department must devote
greater attention to strategic planning and technology development
processes so that resources are spent on technologies that can and will
be transformed into capabilities for the warfighter. In addition, the
S&T and acquisition communities must work together to expand the use of
technology transition agreements and relationship managers. Finally,
the department should examine the way it currently funds technology
transition. It may benefit from an examination of commercial companies'
methods in this regard. They hold their technology developers
accountable for delivering relevant technologies that are ready to be
integrated into new products, but they empower them to succeed by
providing adequate funding to get the job done.
Recommendations for Executive Action:
DOD should take steps to improve its transition of technologies to more
efficiently deliver capabilities to its warfighters. The Defense
Science Board has recommended strengthening of DOD's strategic planning
function, and we believe this would move the department in the right
direction. We believe a disciplined, gated approach for technology
development, supported by technical and business criteria, would
provide adequate knowledge to acquisition program managers about the
risk of including particular technologies on specific weapons programs.
It would also provide a more systematic way for the S&T community to
continually assess the relevancy, feasibility, and potential transition
commitment of its technologies and make decisions about future
investments. DOD's current process lacks specific decision points with
"go/no go" decisions. As such, we recommend that the Secretary of
Defense take the following actions:
* develop a gated process for developing and transitioning technologies
that establishes a transition phase and defines activities that should
occur during this phase, and:
* include specific criteria to support continued funding of specific
projects in that process.
We also believe greater use of tools, such as technology transition
agreements, relationship managers, and metrics, could help the
department improve its ability to deliver mature technologies when
needed, address transition issues more quickly, and gauge the impact of
their science and technology investments and lab processes. Therefore,
we recommend that the Secretary of Defense:
* expand the use of technology transition agreements to applied and
advanced development projects;
* include additional metrics in technology transition agreements to
provide S&T and acquisition program managers demonstrated knowledge
about the manufacturing readiness, producibility, other benefits, and
risks of including the technology on a weapons program;
* expand the use of relationship managers by designating people at
various levels in both the S&T and acquisition communities to address
systemic transition issues and those related to specific weapon system
programs. Also, define responsibilities for each level of relationship
manager;
* adopt additional process-oriented metrics, such as the percentage of
advanced technologies that--once past milestone A of the acquisition
process--transitioned into a weapons program or were fielded and the
cycle time from milestone A to milestone B as a way to measure the
effectiveness of S&T processes and the impact of science and technology
investments;
Commercial companies fund technology development and transition
activities in their labs and hold the labs accountable for delivering
mature technology to their product lines. As such, we are recommending
that the Secretary of Defense:
* Set aside a portion of advanced component development and prototype
funds for the S&T community to manage the transition of technologies to
acquisition programs. For this funding to be used effectively, it will
require the discipline provided by corporate leadership in defining
priorities, processes, and metrics.
Agency Comments and Our Evaluation:
DOD provided us with written comments on a draft of this report. DOD
generally concurred with the recommendations in our report to improve
its ability to transition technology to our warfighters. In doing so,
it emphasized that that commercial industry program managers operate in
an environment driven by profit and market opportunities, while DOD is
organized to support our warfighters. We understand the basic
differences in the environments, but believe there are many lessons
that can be gleaned from our commercial visits. While it is true that
private companies are motivated by profit, they can not achieve a
profit without being focused on the timely delivery of products to the
market. We note in this and other best practices reports that
commercial firms have significant pressures on them to deliver cutting
edge technologies quickly. They often bet their very existence on
delivering new products and technologies before anyone else does so. In
some cases, such as medical systems, their customers have urgent, life-
or-death needs, similar to those of the warfighters, that demand very
complex technological solutions. The real difference between these
companies and the department is that they understand the futility of
promising more than can be delivered to the market at any given point.
They understand that, in the final analysis, they only succeed--or
survive--only by delivering needed capability. On the other hand, the
department's acquisition programs consistently accept immature
technologies into product development that become a major cause of cost
increases, schedule delays, and ultimately very late delivery to the
warfighter who needs the equipment. The list of programs that have
delivered late is extensive.
Rather than focus on the different environment in the commercial world,
DOD should focus on the practices used in the commercial world that
allow it to deliver mature technology to product development (then, to
the user) quickly and efficiently, an outcome woefully lacking in the
department.
Specially, of the six recommendations we made, DOD concurred with two
recommendations, partially concurred with two others, and did not
concur with the final two. DOD's comments appear in appendix II.
DOD concurred with the recommendation that called for establishing a
gated process for developing and transitioning technologies. In its
response, the department stated that it has a gated process for
programs that have a formal milestone A decision point and that
technology maturity and technology readiness assessments are used in
this process. DOD explained that the technology maturity assessments,
in particular, often lead to risk mitigation plans, which include
explicit gates that immature technologies must pass through to become
qualified for adoption.
We are not confident that DOD's implementation plans are fully
responsive to this recommendation. First, the department does not have
a process similar to those that we found at commercial companies to
actively manage and make investment decisions across all technologies
and determine if an individual technology is ready to transition. In
its comments, DOD refers to a process for programs beginning at
milestone A. However, we have reported that 80 percent of the programs
we reviewed that passed milestone B since 2000 did not have a milestone
A.
Second, we found that even when technology readiness assessments
indicated that technologies were not ready to be included in an
acquisition program, DOD often decided to use them anyway. Third, risk
mitigation plans used by DOD are subjective engineering judgments and
are of limited value when evaluating the transition readiness of
technologies.
The department also concurred with our recommendation that it expand
the use of technology transition agreements to applied and advanced
development projects. However, in its response, DOD did not identify
specific actions it plans to take to implement this recommendation.
DOD partially concurred with the recommendation that it include
additional metrics in technology transition agreements. In its
response, the department indicated that it has taken steps to
incorporate manufacturing readiness assessments as a means to improve
technology readiness and that any additional metrics should be project-
specific and included as exit criteria as part of the technology
transition agreement. We are encouraged by DOD's recent development of
manufacturing readiness levels and believe they should be a mandatory
tool for the S&T and acquisition program managers to use to assess the
manufacturability of a new technology. While we agree that the
department should develop additional metrics on a project-by-project
basis, we also believe that a more holistic approach, as depicted
earlier in the report, is needed to determine the transition readiness
of a particular technology. Transition readiness is not solely
dependent upon the technical maturity achieved by S&T, but is also
dependent upon the readiness of an acquisition program to accept the
new technology and therefore should include an assessment of other
factors such as cost, benefit, risk, scalability, and acquisition
program endorsement.
DOD also partially concurred with the recommendation to expand the use
of relationship managers to address systemic transition issues and
those related to specific weapon system programs. In its response, DOD
indicated that it relies on written documents--the technology maturity
assessments and technology transition agreements--to facilitate
communication between the S&T and acquisition communities, particularly
at the executive level. As stated earlier, these documents do not
address many of the factors that could hinder transition. As DOD states
in its comments, technology transition is referred to as a "body-
contact sport." We agree, and this is why our recommendation is aimed
at more direct person-to-person communication. Leading companies
believe relationship managers play a key role in their ability to
successfully transition technology. While DOD did acknowledge that its
S&T investment would benefit from expanded emphasis by staff at the
execution levels on technology transition issues, it did not directly
address the need for midlevel relationship managers. We continue to
believe DOD would benefit from the use of midlevel relationship
managers. These managers provide the back and forth communications
between the S&T and acquisition communities that help ensure that the
right technology is being developed in the time frame needed. These
managers are also uniquely positioned to ensure that technology is
applied to multiple platforms when applicable and can identify systemic
transition problems that should be addressed.
DOD did not concur with the recommendation that it should develop
additional process-oriented metrics, even though it stated that it is
installing a process to do this through the use of technology maturity
and technology readiness assessments. DOD stated that it does not want
to commit to overly burdensome metrics that may be more oriented to
measuring the process for the sake of measurement. Like DOD, we do not
believe the department should develop metrics just for the sake of
measurement. Rather, we believe DOD should develop and use metrics that
allow DOD, Congress, and taxpayers to gauge the effectiveness of DOD
S&T investments, which are expected to reach about $13 billion this
year. The metrics that DOD references--those derived from technology
maturity and technology readiness assessments--are project-level
metrics rather than portfolio and process metrics that would allow the
department to analyze its investment and make adjustments
appropriately.
DOD also did not concur with the recommendation to set aside a portion
of advanced component development and prototype funds for the S&T
community to manage the transition of technologies to acquisition
programs. In its response, DOD stated that acquisition programs are
best suited for transitioning technology because they have the training
and discipline to field systems and have the responsibility to ensure a
stable design, identify a responsive and responsible contractor, manage
execution, and plan for life cycle support of the system. While DOD
discusses transition to the warfighter, our recommendation is aimed at
transitioning technology from S&T to acquisition programs. We found
that in the commercial world, the training and discipline for
transitioning technologies to product development is managed by the
technology development community and is adequately funded. DOD believes
its current approach of setting aside a small portion of S&T funds for
transition through programs such as the Advanced Concept Technology
Demonstration program, Joint Capability Technology Demonstration
program, the Technology Transition Initiative, Manufacturing Technology
program, and the Foreign Comparative Testing program is appropriate. We
continue to believe DOD's approach to funding transition is flawed and
that small pots of money for specific transition activities offer a
piecemeal solution to a more systemic problem. DOD currently uses some
of its advanced component development and prototype funds for S&T
activities, including transition. However, acquisition programs
typically carry out and fund these activities. We believe the S&T
community should be responsible for these activities and as such,
should be given the appropriate level of funding to carry them out. We
believe DOD would be better positioned to develop and deliver weapon
systems more quickly to its warfighters if the S&T community was
responsible for developing, maturing, and transitioning mature
technologies to the acquisition community and if the acquisition
community focused solely on product development activities and
delivering weapon systems to the warfighter That being said, we
recognize that the acquisition and warfighting communities play
critical roles in this process and therefore must continue to work
toward setting realistic program requirements and establishing an
evolutionary approach for developing new weapon programs.
We are sending copies of this report to the Secretary of Defense, the
Director of the Office of Management and Budget, and interested
congressional committees. We will also make copies available at no
charge on the GAO Web site at http://www.gao.gov.
If you have any questions about this report or need additional
information, please contact me at (202) 512-4841 or sullivanm@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. Key contributors
to this report were Karen Zuckerstein, Assistant Director; Cheryl
Andrew; Lily Chin; Sameena Ismailjee; and Sean Merrill.
Signed by:
Michael Sullivan:
Director:
Acquisition and Sourcing Management:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
This report examines the Department of Defense's (DOD) efforts to
improve its technology transition processes, with a focus on
identifying specific management, funding, and organizational practices
that could improve technology transition and weapon system outcomes.
Specifically, our objectives were to (1) identify techniques that
commercial companies use to transition mature technologies before the
start of product development and (2) assess the extent to which DOD is
using these techniques.
We used a case study approach to compare and contrast DOD and leading
commercial companies' practices. Companies were selected on the basis
of such factors as the amount of money spent on research and
development activities over the past several years and the percentage
of change in research and development spending. For the most part, we
selected Fortune 500 companies that were in the top 100 for research
and development spending and had not experienced major cutbacks in this
funding. We also took into account the type of products each company
develops and selected companies representing several different business
sectors. Below are descriptions of the four companies featured in this
report.
Boeing:
Boeing is a leading aerospace company and the largest manufacturer of
commercial jetliners and military aircraft combined, with capabilities
in rotorcraft, electronic and defense systems, missiles, satellites,
launch vehicles, and advanced information and communication systems.
Boeing Phantom Works develops advanced systems solutions, such as
advanced homeland security and air traffic management, as well as
breakthrough technologies, such as advanced avionics and composite
materials that are intended to significantly improve the performance,
quality, and affordability of aerospace products and services. We met
with research officials, as well as product line officials representing
both its commercial and defense sectors in Seattle, Washington.
3M:
3M is a diversified technology company with a worldwide presence in
various markets, including consumer and office; display and graphics;
electronics and communications; health care; industrial; safety,
security, and protection services; and transportation. With more than
55,000 products, 3M invests more than $1 billion annually in research
and development and related activities associated with 30-plus core
technologies. The company was awarded nearly 500 U.S. patents in 2005.
We met with research, business unit, and government programs officials
at 3M headquarters in St. Paul, Minnesota.
IBM:
IBM is one of the world's largest technological companies, spending
about $3 billion annually on research and development activities. It is
the largest supplier of hardware, software, and information technology
services and pioneered the development and implementation of on-demand
business. With 3,248 U.S. patents, IBM earned more patents than any
other company for the 12th consecutive year in 2004. In the past 4
years, IBM inventors received more than 13,000 patents--approximately
5,400 more than any other patent recipient. We met with research and
product development officials at the Watson Research Center in
Hawthorne, New York.
Motorola:
Motorola is a Fortune 500 global communications leader that provides
seamless mobility products and solutions across broadband, embedded
systems and wireless networks for products in homes, automobiles, and
workplaces. Motorola spent about $3.5 billion in 2005 on research and
development activities. Approximately 22,000 professional employees
were engaged in research activities during 2005. We met with research
officials and product development officials, as well as partnership
development managers at its offices in Schaumburg, Illinois.
For each of the companies, we interviewed senior management officials
knowledgeable about research and development activities to gather
consistent information about processes, practices, and metrics the
companies use to transition technology smoothly. In particular, we
discussed their (1) strategic planning process for identifying and
prioritizing customer needs, (2) technology development process used to
fund and mature technologies required to meet customer needs, (3) tools
used to facilitate communication between labs and product lines to
transition technology, and (4) technology transition process, including
when transition occurs, the organizations involved, and how technology
is funded throughout the transition phase. We synthesized information
from GAO's past best practices work about technology and product
development.
To determine DOD's practices for transitioning technology, we met with
science and technology (S&T) and acquisition officials to discuss the
same categories of questions listed above that we asked leading
commercial companies. The following is a list of the organizations we
met with:
* Director, Defense Research and Engineering, Alexandria, Virginia:
- Director, Plans and Programs:
- Deputy Under Secretary of Defense, Advanced Systems and Concepts:
- Director, Defense Advanced Research Projects Agency:
* Air Force:
- Office of the Assistant Secretary of the Air Force for Acquisition
(Science, Technology, and Engineering), Alexandria, Virginia:
- Air Force Material Command, Wright Patterson Air Force Base, Ohio:
- Air Force Research Labs, Wright Patterson Air Force Base, Ohio:
- Joint Unmanned Combat Air Systems Program Office, Wright Patterson
Air Force Base, Ohio:
* Army:
- Assistant Secretary of the Army Acquisition, Logistics and
Technology, Alexandria, Virginia:
- Deputy Assistant Secretary for Research and Technology Chief
Scientist, Alexandria, Virginia:
- Joint Tactical Radio System Cluster 5 Program Office, Alexandria,
Virginia:
* Navy:
- Deputy Assistant Secretary of Navy for Research, Development, Test
and Evaluation, Alexandria, Virginia:
- Office of Naval Research, Alexandria, Virginia:
- Naval Air Systems Command, Patuxent River Naval Air Station,
Maryland:
- Naval Sea Systems Command, Washington Navy Yard, D.C.
- CVN-21 Program Office, Washington Navy Yard, D.C.
- Multi-mission Maritime Aircraft Program Office, Patuxent River Naval
Air Station, Maryland:
- Aircraft Launch and Recovery Equipment Program Office, Patuxent River
Naval Air Station, Maryland:
At each of these locations, we collected appropriate documents that
describe the various programs, organizations, responsibilities, and
funding. We obtained examples of key documents, such as technology
transition agreements or memorandums of agreement that are used to
solidify agreements made between labs and weapon programs. We reviewed
DOD and military service strategic plans and research, development,
test, and evaluation funding documents. In addition, we reviewed
documents required as part of the selection and oversight process for
the Air Force Advanced Technology Development program, the Army
Technology Objectives program, and the Future Naval Capabilities
program. We relied on previous GAO best practices and weapon system
reports that highlight cost and schedule impacts of launching new
weapon programs with immature technology. A list of these reports can
be found at the end of this report.
[End of section]
Appendix II: Comments from the Department of Defense:
Office Of The Director Of Defense Research And Engineering:
3040 Defense Pentagon Washington, D.C. 20301-3040:
SEP 5 2006:
Mr. Michael J. Sullivan:
Director, Acquisition and Sourcing Management:
U.S. Government Accountability Office:
441 G Street, N. W.
Washington, DC 20548:
Dear Mr. Sullivan:
This is the Department of Defense (DoD) response to the General
Accountability Office (Gao) Draft Report, "Best Practices: Stronger
Practices Needed to Improve DOD Technology Transition Processes," dated
August 2006 (GAO Code 120454/ GAO-06-883).
While we generally concur with recommendations in the report that would
encourage DoD to improve its ability to transition technology to our
warfighters, we believe it is important to recognize there are
differences between the Government and industry. Industry program
managers operate in an environment driven by profit and market
opportunities while DoD is organized to support our warfighters. Some
of the ways DoD provides warfighter capabilities is through technology
upgrades, leap-aheads, and transformation driven by the near and mid-
term operational priorities. The essential governance process of annual
appropriations and authorizations is also a factor that private sector
technology investment does not experience. We adopt industry best
practices where practical and in a manner consistent with both our
legislative mandates and the DoD mission. Comments are provided at the
enclosure.
The staff has worked closely with the GAO team and appreciates their
inputs for transitioning technology to the warfighter. Thank you for
the opportunity to comment on the draft report.
Sincerely,
Signed by:
Alan R. Shaffer:
Director, Plans and Program:
GAO Draft Report Mated August 2006 GAO Code 120454/gao-06-883:
"Best Practices: Stronger Practices Needed to Improve DOD Technology
Transition Processes"
Department Of Defense Comments To The Recommendations:
The Department has reviewed the GAO's report concerning implementation
of industry best practices for technology transition and partially
agrees with the findings. However, as discussed during the exit
briefing, private sector industry program managers operate in a
significantly different environment than DoD managers, with profit
objectives driving commercial investments, vice our DoD-mission focus
on meeting warfighter objectives for technology upgrades, leap-aheads,
and transformation. These objectives drive many of the inherent
cultural changes which we are continuing to address with periodic
process changes across multiple programs and organizations in the
Department.
Recommendation 1: The GAO recommended that the Secretary of Defense
develop a gated process for developing and transitioning technologies
that establishes a transition phase and defines activities that should
occur during this phase, and include specific criteria to support
continued funding of specific projects in that process. (p. 32/GAO
Draft Report):
DOD Response: Concur.
The Department has, and recognizes the value of, a gated process for
programs that have a formal Milestone A. That process involves the use
of Technology Maturity Assessments (TMA's) and Technology Readiness
Assessments (TRA's). This formal process is under the responsibility of
the Science and Technology community and helps ensure that critical
technologies are proven prior to delivery to the Acquisition community.
The use of TMAs and TRAs has been in use for about two years, and we
would expect that another 4-5 years of assessments will be needed in
order to realize the desired results. TMA's often lead to technology
risk mitigation plans, which include explicit "gates" that immature
technologies must pass through to become qualified for adoption. The
Department also supports technology transition agreements, signed by
the developer and acquisition managers, with specific, mutually agreed
upon exit criteria, as a viable alternative for those programs that
have transition as a specific objective.
Recommendation 2: The GAO recommended that the Secretary of Defense
expand the use of technology transition agreements to applied and
advanced development projects.
(p. 32/GAO Draft Report):
DOD Response: Concur.
Technology transition agreements have been used successfully by the
Services and OSD to document and facilitate technology transition
between the Science & Technology (S&T) and acquisition communities.
Recommendation 3: The GAO recommended that the Secretary of Defense
include additional metrics in technology transition agreements to
provide S&T and acquisition program managers demonstrated knowledge of
manufacturing readiness, producibility, other benefits, and risks of
including the technology on a weapons program. (p. 32/GAO Draft
Report):
DOD Response: Partially Concur.
The Department has taken steps to incorporate manufacturing readiness
assessments as a means to improve technology transition. Recently the
Joint Defense Manufacturing Technology Panel, with the support of
industry and the defense acquisition community, developed a set of
Manufacturing Readiness Level (MRL) definitions and supporting tools.
MRLs are designed to serve the same purpose for manufacturing risk/
maturity as the Technology Readiness Levels (TRLs) serve for technology
readiness, and incorporate a similar numbering system. They are
described in the DoD Technology Readiness Assessment Deskbook, at
http://www.dod.mil/ddre/doc.tra_deskbook.pdf Any additional metrics
should be project specific and determined by the S&T and acquisition
managers, and be documented as mutually agreed upon exit criteria as
part of the technology transition agreement.
Recommendation 4: The GAO recommended that the Secretary of Defense
expand the use of relationship managers by designating people at
various levels in both the S&T and acquisition communities to address
systemic transition issues and those related to specific weapon system
programs. Also, define responsibilities for each level of relationship
manager. (p. 32/GAO Draft Report):
DOD Response: Partially Concur.
The DoD already has a process in place with defined responsibilities
for both the S&T and acquisition communities. TMAs are provided to the
Program Executive Officers, the Defense Acquisition Board (DAB), and
the Overarching Integrated Process Teams for Acquisition Category 1
(ACAT 1) programs. The TMAs are part of the DAB reviews to ensure a
transition path is established. For technology not part of an ACAT 1
program, the Department uses Technology Transition Agreements to
accomplish this purpose thereby causing the S&T and Acquisition
managers to negotiate exit criteria that must be met before the
technology transitions. Technology transition is frequently referred to
as a "body-contact sport," in recognition of the important role that
personal communication and relationships usually play in successful
efforts. Throughout DoD'S S&T enterprise, there are many staff who
focus on fostering transitions by establishing relationships between
technology developers and potential technology users, and by breaking
down barriers to technology transition. Many of these efforts are
successful and move certain technologies forward from research to
adoption reasonably quickly. However, it's probably a fair observation
that a substantial fraction of DOD's S&T investment would benefit from
expanded emphasis by staff at the execution level in the labs,
Agencies, and Program Managers, etc. in terms of technology transition
versus technology development.
Recommendation 5: The GAO recommended that the Secretary of Defense
adopt additional process-oriented metrics, such as the percentage of
advanced technologies that--once past Milestone A of the acquisition
process-transitioned onto a weapons program or were fielded and the
cycle time from Milestone A to Milestone B as a way to measure the
effectiveness of S&T processes and the impact of science and technology
investments.
(p. 32/GAO Draft Report):
DOD Response: Nonconcur.
We are installing a process to do this through the use of TMAs and
TRAs. As we mature this process over the next 4-5 years, we would not
want to commit to overly burdensome metrics that may be more oriented
to measuring the process for the sake of measurement rather than using
this process to improve transition. Technology has transitioned when:
it has moved into an acquisition program of record; it can be acquired/
procured through normal DoD procurement programs; it has addressed or
met the requirements of DoD doctrine, operations, training,
maintenance, procurement, logistics, and facilities and; it provides
sustainable capability. With this transition we also transition from
S&T funding to Acquisition funding to reflect the proper alignment of
programs and funding. Technology transition is the result of a
collaboration between the requirements, technology, and acquisition
communities. Each of the Military Services have a process in place to
bring these collaborative elements together. The technology is already
certified at Acquisition Milestone A with a technology pathway for
achieving Technology Readiness Level (TRL) 6 at Acquisition Milestone
B.
Recommendation 6: The GAO recommended that the Secretary of Defense set
aside a portion of advanced component development and prototype funds
for the S&T community to manage the transition of technologies to
acquisition programs. (p. 32/GAO Draft Report):
DOD Response: Nonconcur.
GAO recognizes the transition programs established by the Department to
make technologies ready for transition, including the Advanced Concept/
Joint Concept Technology Demonstrations (AC/JCTDs), Technology
Transition Initiative (TTI), Manufacturing Technology (ManTech) and
Foreign Comparative Testing (FCT). But these, in practice, reflect a
collaborative contract between the S&T community, the acquisition
community procurement program of record, and the warfighter to deploy
the technology when it is ready to be fielded. In addition, the
training and discipline to field systems resides in the acquisition
community, as they have the responsibility to ensure a stable design,
identify a responsive and responsible contractor, manage execution, and
plan for life cycle support of the system. While there may be examples
of stand-alone systems where the S&T community could manage the
transition to a fielded system, this is not a desirable or feasible
approach for larger system-of-system development programs with broad
involvement from many stakeholders and longer system life cycles.
However, to assist the transition of those technologies not
specifically tied to a program of record, the DDR&E invests
approximately $500 million annually in programs like but not limited to
ACTDs/JCTDs, TTI, ManTech, and FCT as mentioned above. Accordingly, DoD
is setting aside a portion of S&T funds for transition. We believe the
current balance is correct, but we will continue to assess to assure
ready technologies are offered to our warfighters rapidly, efficiently,
and affordably.
[End of section]
Appendix III: DOD Research, Development, Technology, and Engineering
Budget:
Dollars in billions.
Name: Basic research;
Budget activity: 1;
Description: Basic research is systematic study directed toward greater
knowledge or understanding of the fundamental aspects of phenomena and
of observable facts without specific applications towards processes or
products in mind. It includes all scientific study and experimentation
directed towards increasing fundamental knowledge and understanding in
those fields of the physical, engineering, environmental, and life
sciences related to long-term national security needs. It is farsighted
high-payoff research that provides the basis for technological
progress;
Which DOD community controls spending: S&T;
Budget (fiscal year 2006): $1.5.
Name: Applied research;
Budget activity: 2;
Description: Applied research is systemic study to understand the means
to meet a recognized and specific need. It is a systematic expression
and application of knowledge to develop useful materials, devices, and
systems or methods. Applied research may translate promising basic
research into solutions for broadly defined military needs, short of
system development. Applied research precedes system- specific
technology investigations or development;
Which DOD community controls spending: S&T;
Budget (fiscal year 2006): $5.2.
Name: Advanced technology development;
Budget activity: 3;
Description: Advanced technology development includes development of
subsystems and components and efforts to integrate them into system
prototypes for field experiments and/or tests in a simulated
environment. The results of this type of effort are proof of
technological feasibility and assessment of subsystem and component
operability and producibility rather than the development of hardware
for service use. Projects in this category have a direct relevance to
identified military needs. Program elements in this category involve
pre-acquisition efforts, such as system concept demonstration, joint
and service-specific experiments, or technology demonstrations, and
generally have technology readiness levels (TRLs) of 4, 5, or 6.
Projects in this category do not necessarily lead to subsequent
development or procurement phases, but should have the goal of moving
out of science and technology and into the acquisition process within
years defense program. Upon successful completion of projects that have
military utility, the technology should be available for transition;
Which DOD community controls spending: S&T;
Budget (fiscal year 2006): $6.6.
Name: Advanced component development and prototypes;
Budget activity: 4;
Description: Advanced component development and prototypes consists of
efforts necessary to evaluate integrated technologies or prototype
systems in a high fidelity and realistic operating environment. These
activities include system-specific efforts that help expedite
technology transition from the laboratory to operational use. Emphasis
is on proving component and subsystem maturity prior to integration in
major and complex system sand may involve risk reduction initiatives.
Advanced component development and prototypes efforts are to occur
before an acquisition program starts product;
Which DOD community controls spending: Acquisition;
Budget (fiscal year 2006): $13.9.
Name: System development and demonstration;
Budget activity: 5;
Description: System development and demonstration consists of newly
initiated acquisition programs and includes engineering and
manufacturing development tasks aimed at meeting validated requirements
prior to full-rate production. Characteristics of this activity involve
mature system development, integration, and demonstration to support a
production decision;
Which DOD community controls spending: Acquisition;
Budget (fiscal year 2006): $19.3.
Name: Research, development, test and evaluation management support;
Budget activity: 6;
Description: RDT&E management support includes efforts to sustain
and/or modernize the installations or operations required for general
RDT&E. Such efforts may related to test ranges, military construction,
maintenance support of laboratories, operation and maintenance of test
aircraft and ships, and studies and analyses I support of the RDT&E
program;
Which DOD community controls spending: Acquisition;
Budget (fiscal year 2006): $4.0.
Name: Operational system development;
Budget activity: 7;
Description: Operational system development includes development
efforts to upgrade systems that have been fielded or have received
approval for full-rate production and anticipate production funding in
the current or subsequent fiscal year;
Which DOD community controls spending: Acquisition;
Budget (fiscal year 2006): $20.6.
Source: DOD (data); GAO (presentation and analysis).
[End of table]
[End of section]
Appendix IV: DOD Technology Readiness Levels:
Technology readiness level: 1. Basic principles observed and reported;
Description: Lowest level of technology readiness. Scientific research
begins to be translated into applied research and development. Examples
might include paper studies of a technology's basic properties.
Technology readiness level: 2. Technology concept and/or application
formulated;
Description: Invention begins. Once basic principles are observed,
practical applications can be invented. Applications are speculative
and there may be no proof or detailed analysis to support the
assumption. Examples are still limited to analytic studies.
Technology readiness level: 3. Analytical and experimental critical
function and/or characteristic proof of concept;
Description: Active research and development is initiated. This
includes analytical studies and laboratory studies to physically
validate analytical predictions of separate elements of the technology.
Examples include components that are not yet integrated or
representative.
Technology readiness level: 4. Component and/or breadboard. Validation
in laboratory environment;
Description: Basic technological components are integrated to establish
that they will work together. This is relatively "low fidelity"
compared to the eventual system. Examples include integration of "ad
hoc" hardware in a laboratory.
Technology readiness level: 5. Component and/or breadboard validation
in a relevant environment;
Description: Fidelity of breadboard technology increases significantly.
The basic technological components are integrated with reasonably
realistic supporting elements so it can be tested in a simulated
environment. Examples include "high fidelity" laboratory integration of
components.
Technology readiness level: 6. System/subsystem model or prototype
demonstration in a relevant environment;
Description: Representative model or prototype system, which is well
beyond that of TRL 5, is tested in a relevant environment. Represents a
major step up in a technology's demonstrated readiness. Examples
include testing a prototype in a high-fidelity laboratory environment
or in simulated operational environment.
Technology readiness level: 7. System prototype demonstration in an
operational environment;
Description: Prototype near, or at, planned operational system.
Represents a major step up from TRL 6, requiring demonstration of an
actual system prototype in an operational environment such as in an
aircraft, vehicle, or space. Examples include testing the prototype in
a test bed aircraft.
Technology readiness level: 8. Actual system completed and qualified
through test and demonstration;
Description: Technology has been proven to work in its final form and
under expected conditions. In almost all cases, this TRL represents the
end of true system development. Examples include developmental test and
evaluation of the system in its intended weapon system to determine if
it meets design specifications.
Technology readiness level: 9. Actual system proven through successful
mission operations;
Description: Actual application of the technology in its final form and
under mission conditions, such as those encountered in operational test
and evaluation. Examples include using the system under operational
mission conditions.
Source: DOD (data); GAO (presentation and analysis).
[End of table]
[End of section]
Related GAO Products:
Defense Acquisitions: Assessments of Selected Major Weapon Programs.
GAO-06-391. Washington, D.C.: March 31, 2006.
Best Practices: Better Support of Weapon System Program Managers Needed
to Improve Outcomes. GAO-06-110. Washington, D.C.: November 1, 2005.
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.
Defense Acquisitions: Factors Affecting Outcomes of Advanced Concept
Technology Demonstration. GAO-03-52. Washington, D.C.: December 2,
2002.
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.
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.
FOOTNOTES
[1] This represents the amount of money Congress authorized DOD for
basic research, applied research, and advanced technology development.
[2] GAO, Defense Acquisitions: Assessments of Selected Major Weapon
Programs. GAO-06-391 (Washington, D.C.: March 31, 2006).
[3] GAO, Best Practices: Better Management of Technology Development
Can Improve Weapon System Outcomes. GAO/NSIAD-99-162 (Washington, D.C.:
July 30, 1999) and Best Practices: Better Matching of Needs and
Resources Will Lead to Better Weapon System Outcomes GAO-01-288
(Washington, D.C.: March 8, 2001). Other best practices reports are
listed in the Related GAO Products section at the back of this report.
[4] GAO, Best Practices: Better Support of Weapon System Program
Managers Needed to Improve Outcomes. GAO-06-110 (Washington, D.C.: Nov.
1, 2005).
[5] GAO-06-391
[6] 10 U.S.C § 2433 establishes the requirement for unit cost reports
if certain thresholds for program costs are exceeded (known as unit
cost or Nunn-McCurdy breaches). DOD is required to report to Congress
and, if applicable, certify the program to Congress.
[7] Numerous GAO reports address issues surrounding product
development. See Related GAO Products at the end of this report.
[8] Boeing has two primary businesses: Boeing Commercial Airplanes and
Boeing Integrated Defense systems. Both businesses are supported by the
same science and technology lab. However, the two businesses have
different tools for transitioning technology.
[9] DDRE is the principal staff adviser to the Under Secretary of
Defense for Acquisition, Technology, and Logistics and the Secretary
and Deputy Secretary of Defense for research and engineering matters.
DDRE serves as the chief technology officer for the department.
[10] DOD. Defense Science Board Task Force on The Roles and Authorities
of the Director of Defense Research and Engineering, (Washington, D.C.:
Oct. 28, 2005).
[11] GAO, Defense Acquisitions: Major Weapon Systems Continue to
Experience Cost and Schedule Problems under DOD's Revised Policy. GAO-
06-368 (Washington, D.C.: April 13, 2006).
[12] GAO-06-368.
[13] GAO, Defense Technology Development: Management Process Can Be
Strengthened for New Technology Transition Programs. GAO-05-480
(Washington, D.C.: June 17, 2005).
GAO's Mission:
The Government Accountability Office, the investigative arm of
Congress, exists to support Congress in meeting its constitutional
responsibilities and to help improve the performance and accountability
of the federal government for the American people. GAO examines the use
of public funds; evaluates federal programs and policies; and provides
analyses, recommendations, and other assistance to help Congress make
informed oversight, policy, and funding decisions. GAO's commitment to
good government is reflected in its core values of accountability,
integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony:
The fastest and easiest way to obtain copies of GAO documents at no
cost is through the Internet. GAO's Web site ( www.gao.gov ) contains
abstracts and full-text files of current reports and testimony and an
expanding archive of older products. The Web site features a search
engine to help you locate documents using key words and phrases. You
can print these documents in their entirety, including charts and other
graphics.
Each day, GAO issues a list of newly released reports, testimony, and
correspondence. GAO posts this list, known as "Today's Reports," on its
Web site daily. The list contains links to the full-text document
files. To have GAO e-mail this list to you every afternoon, go to
www.gao.gov and select "Subscribe to e-mail alerts" under the "Order
GAO Products" heading.
Order by Mail or Phone:
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent
of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or
more copies mailed to a single address are discounted 25 percent.
Orders should be sent to:
U.S. Government Accountability Office
441 G Street NW, Room LM
Washington, D.C. 20548:
To order by Phone:
Voice: (202) 512-6000:
TDD: (202) 512-2537:
Fax: (202) 512-6061:
To Report Fraud, Waste, and Abuse in Federal Programs:
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm
E-mail: fraudnet@gao.gov
Automated answering system: (800) 424-5454 or (202) 512-7470:
Public Affairs:
Jeff Nelligan, managing director,
NelliganJ@gao.gov
(202) 512-4800
U.S. Government Accountability Office,
441 G Street NW, Room 7149
Washington, D.C. 20548:
