Best Practices: Agency acquisition policies could better implement key product development principles
why it matters
Each year, the Departments of Defense (DOD) and Homeland Security (DHS) and the National Aeronautics and Space Administration (NASA) together invest hundreds of billions of dollars to purchase stealth jets, cutters and ships, and lunar rovers, among others, all with complex software. However, GAO’s annual reviews of these agencies’ major acquisitions reveal that they often take longer and spend more money than expected to deliver functionality to users.
Key points to remember
Leading companies take a disciplined approach to developing innovative products that meet the needs of their customers and to deliver them to market on time and within planned costs. The top 13 companies surveyed by GAO perform similar activities when developing new products, such as iterative design in hardware and software development. These development process activities align with the four key principles that help project teams bring innovative products to market quickly and effectively (see figure). GAO has found that the department-wide acquisition policies of DOD, DHS, and NASA implement certain key product development principles. But, they still have to fully implement others. This gap prevents agencies from ensuring a consistent approach to developing and delivering products quickly and efficiently.
Great companies use four key principles for product development
For example, large companies focus on designing a minimal marketable product, a product with the minimum capabilities necessary for customers to recognize value. Large companies also prioritize the timing of a project: they release the most customer-critical features and will extend non-critical product features (an industry term for removing them from the current release) as needed. in order to meet the schedule. Large companies have mechanisms in place to solicit and implement customer feedback early and often throughout development to ensure the product is responsive to customer needs, among other things.
The major acquisition policies of DOD, DHS, and NASA incorporate many aspects of the four key principles, to varying degrees. However, agencies are missing opportunities to achieve positive results by not addressing certain sub-principles in their policies.
- DOD policies do not require all programs to consider non-critical ramp capabilities in order to stay on schedule, hampering the programs’ best chance of maintaining timelines.
- DHS policies do not require all programs to use modern design tools during hardware and software development, which limits ongoing opportunities for programs to successfully improve design reviews.
- NASA policies do not include mechanisms for programs to obtain and use product feedback from stakeholders or end users – such as astronauts operating spacecraft or the scientific community benefiting from research projects. NASA – to identify challenges or new features to include in future projects.
The GAO has previously found that other factors beyond policy can affect agency results, including structural differences between government and private industry. However, previous GAO work also demonstrates that key private industry principles can be thoughtfully applied to government procurement to improve outcomes, even with different cultures and incentives.
How the GAO did this study
This report examines the principles that guide the product development efforts of leading companies and the extent to which key DOD, DHS, and NASA department-wide acquisition policies reflect the companies’ key principles and achieve to similar results. GAO has identified the top 13 product development companies based on rankings in well-recognized lists; interviewed company representatives; analyzed department-wide acquisition policies of DOD, DHS, and NASA; and interviewed agency officials. The report is the first product in a set of scheduled jobs. In future work, GAO will explore how government agencies can apply some of the key principles outlined in this report.