December 2, 2008 / 9:18 PM / 9 years ago

UPDATE 1-Pentagon approves reforms to rein in weapons costs

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WASHINGTON, Dec 2 (Reuters) - Spurred by massive cost overruns and chronic schedule delays, the Pentagon's chief weapons buyer approved on Tuesday the first major changes in the Defense Department's acquisition policies in five years.

"Our policies must be more disciplined and effective to ensure that results are more predictable and that we are better stewards of taxpayer dollars," John Young, defense undersecretary for acquisition, technology and logistics, said in a statement.

The changes reflect the Pentagon's determination to improve the way it buys weapons and services, the department said.

The changed rules, which will affect Lockheed Martin Corp (LMT.N), Boeing Co (BA.N) and other major defense contractors, call for:

-- each program to go through a major review to ensure it is based on approved requirements and a rigorous assessment of alternatives.

-- use of prototypes of the system or key components, which demonstrate technologies and prove they work before engineering development begins.

-- more frequent and effective program reviews to assess progress.

-- use of configuration steering boards to avoid changes in requirements that have historically led to cost increases and schedule delays.

-- independent reviews to certify the maturity of program technologies for a program to progress to the costly final phase of development.

-- an emphasis on engineering in the final phase of the development of a new program.

-- more effective test and evaluation to ensure early detection and correction of problems. (Reporting by Andrea Shalal-Esa, editing by Matthew Lewis)

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