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2 Defense and Commercial System Development: A Comparison
Pages 31-38

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From page 31...
... The second section discusses the use of an incentive system for defense acquisition with regard to reliability. The final section of the chapter presents a view of best practices by Tom Wissink of Lockheed Martin and Lou Gullo of Raytheon, who have extensive experience in developing reliable defense systems.
From page 32...
... In contrast, defense system development has a number of relatively independent "agents," including the system development contractor; a DoD program manager; DoD testers; and the Office of the Secretary of Defense, which has oversight responsibilities. There is also the military user, who has a different relationship with the contractor than a customer purchasing a commercial product from a manufacturer (see below)
From page 33...
... Although DoD has at times used incentives to reward contractors for exceeding requirements, the panel is unaware of any attempt to institute a system of warranties for a defense system that provides for contractor payments for failure to meet reliability requirements.1 And in considering incentives, we are unaware of any studies of whether offering such payments has succeeded in motivating developers to devote greater priority to meeting reliability requirements. Most relevant to this report is the idea that rewards could be applied at intermediate points during development, with rewards for systems that are assessed to be ahead of intermediate reliability goals, or penalties for systems that are assessed to be substantially behind such goals.
From page 34...
... Looking at a later stage in the acquisition process, providing incentives (or penalties) for performance after delivery of prototypes, rather than during intermediate stages of development, would have the advantage of being able to use more directly relevant information, in that the the reliability level achieved by a system could be directly assessed through DoD developmental and operational testing.
From page 35...
... There should also be a "reliability growth incentive award scale and incentive fee scheduled during intervals in the development cycle so that the contractor is rewarded for favorable reliability growth that exceeds customer expectations." Reliability growth management planning entails the development of reliability growth curves for the system, major subsystems, products, and assemblies, along with the plan for achieving specified reliability values. Reliability growth management "includes reliability assessments and a test plan that contains various types of testing (e.g., accelerated life tests, highly accelerated life tests)
From page 36...
... to provide the following information: • the expected starting point (initial reliability) , with the context in a separate document that supports the data sources and the rationale for its selection; • the number of tests planned during the development program to be used to verify that starting point; • the expected reliability growth profile with the context in a sepa rate document that supports the data sources and the rationale for the selection of the points on the graph; • the number of tests needed to produce that profile, the schedule for these tests, and the schedule for implementing design change cor rective actions for the failures that are expected to occur, resulting in design reliability improvements; and • a risk assessment for the starting point, reliability growth profile, and number of tests necessary to meet the required reliability levels on the growth curve.
From page 37...
... DEFENSE AND COMMERCIAL SYSTEM DEVELOPMENT: A COMPARISON 37 in the DoD oversight of acquisition processes, which includes the review and approval of essential test and evaluation documents. Furthermore, we do not envision the construction of a master list of DoD-approved reliability growth tools.


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