The Department of Defense (DOD) acquires goods and services from contractors, federal arsenals, and shipyards to support military operations. The acquisition is a broad term that applies to more than just the purchase of an item or service; the acquisition process encompasses the design, engineering, construction, testing, deployment, sustainment, and disposal of weapons or related items purchased from a contractor.
DoD Directive 5000.01, The Defense Acquisition System has for many years articulated life cycle systems management as a key cornerstone of defense acquisition, stating in Enclosure 1, Paragraph E1.1.29 entitled “Total Systems Approach” that: “the PM (program manager) shall be the single point of accountability for accomplishing program objectives for total life-cycle systems management, including sustainment. The PM shall apply human systems integration to optimize total system performance (hardware, software, and human), operational effectiveness, and suitability, survivability, safety, and affordability. PMs shall consider supportability, life cycle costs, performance, and schedule comparable in making program decisions. Planning for Operation and Support and the estimation of total ownership costs shall begin as early as possible. Supportability, a key component of performance, shall be considered throughout the system life cycle.”
The Department of Defense (DoD) has changed its acquisition policies in a way that marks, according to a DoD release, “one of the most transformational changes to acquisition policy in decades.” Deputy Secretary of Defense David Norquist signed into effect DoD Directive 5000.01, the Defense Acquisition System, on Sept. 9 2020. The new 16-page directive outlines the new policies for acquisition in the department and represents rules rewrite process many months in the making.
The objective of the Defense Acquisition System (DAS) is to support the National Defense Strategy, through the development of a more lethal force based on U.S. technological innovation and a culture of performance that yields a decisive and sustained U.S. military advantage. The acquisition system will be designed to acquire products and services that satisfy user needs with measurable and timely improvements to mission capability, material readiness, and operational support, at a fair and reasonable price.
The new policies were crafted to “deliver performance at the speed of relevance,” according to the document. Katie Arrington, DoD’s CISO for Acquisition and Sustainment, emphasized the need to accelerate the acquisition process earlier this year. “You can’t buy software like you buy hardware,” said Arrington, adding that 90-day acquisition periods are too slow for software acquisition. “You have to do it at the speed of relevance.” The directive and its six tenets of acquisition are being implemented using the Adaptive Acquisition Framework, according to the release. The framework includes specific directions for several other types of acquisition in addition to software acquisition.
DOD Acquisition process
Every weapon system in the U.S. arsenal is created to satisfy a specific military need (often referred to as a requirement), must be paid for by the federal budget, and is designed and built within an acquisition system. From concept to deployment, a weapon system must go through the three-step process of identifying the required weapon system, establishing a budget, and acquiring the system. These three steps (each of which is a system onto itself), taken together, are often referred to as “Big ‘A’” acquisition, in contrast with the Defense Acquisition System which is referred to as “little ‘a’” acquisition)
These processes are formally referred to as
- The Joint Capabilities Integration and Development System (JCIDS) which is the process used for identifying warfighter requirements,
- The Planning, Programming, Budgeting, and Execution System (PPBE) used for allocating resources and budgeting, and
- Finally, The Defense Acquisition System (DAS) for developing and/or buying an item
From a practical perspective, the interaction of these three processes is challenging. The JCIDS system is needs-based – and warfighter needs can occur at any time. The PPBE process for budgeting is on a fixed schedule occurring annually and covering multiple planning years. The Defense acquisition process is event-based and divided into phases, milestones, and reviews. These three processes must work together, as an acquisition program won’t begin unless there are identified warfighter needs, and can’t start until there is money to support the initiative.
The Requirements Process: Joint Capabilities Integration and Development System (JCIDS)
JCIDS is the process by which DOD identifies, assesses, and prioritizes what capabilities the military requires to fulfill its mission. As such, JCIDS is often referred to as the requirements generation process. Requirements identified through JCIDS can be addressed in a number of ways, including changes in doctrine, training, organization, or the acquisition of a new system, such as a weapon system.
The JCIDS process was created in 2003 in an effort to fundamentally change the way the Department of Defense developed requirements. Prior to 2003, DOD used a threat-based approach to identifying warfighter requirements. With the advent of JCIDS, DOD shifted to a capabilities-based approach to identifying warfighter needs. In other words, instead of developing, producing, and fielding systems based on specific perceived threats to the nation, DOD adopted a policy of identifying what capabilities it needed to meet the strategic direction and priorities set forth in high-level strategy and guidance documents, such as the National Military Strategy (NMS), National Defense Strategy (NDS), and Quadrennial Defense Review.
Many analysts suggest that under the threat-based approach, each military service identified a threat, and in response to the threat developed its own independent weapon system. The shift to a capabilities-based approach served to promote a more collaborative method to identifying capability gaps across services, instead of each service developing its own response. The impact was an increase in systems being developed jointly among services.
The process consists of four (4) steps.
1. Capabilities Base Assessment (CBA): validate capability gaps thru mission identification, operational characteristics, non-material viability, and recommended solution types.
2. Approval of the Initial Capabilities Document (ICD) and Courses of Action: validate capabilities required to perform the mission as defined; the gap in capabilities along with their priorities and operational risks; and the need to address the capability gaps.
3. Approval of the Capability Development Document (CDD): validate the Key Performance Parameters (KPP) and their associated threshold and objective values; assesses the risks in meeting those KPPs in terms of cost, schedule and technological maturity; and assesses the affordability of the system as compared to the operational capability being delivered.
4. Approval of the Capabilities Production Document (CPD): ensure the system being delivered meets the needs originally defined in the ICD at an affordable cost.
JCIDS is governed by Chairman of the Joint Chiefs of Staff Instruction (CJCSI) 3170.01H (dated January 10, 2012) and utilizes the procedures described in the Manual for the Operation of the Joint Capabilities Integration and Development System (updated February 2009). According to CJCSI 3170.01H, the first step in the process is conducting a Capabilities Based Assessment (CBA), which analyzes the military’s capability needs and gaps, and recommends both materiel and non-materiel ways to address the gaps. If, as a result of a CBA, a material solution (such as a weapon system) is considered, an Initial Capabilities Document (ICD) is prepared. The ICD justifies the need for a material solution to satisfy the identified capability gap.
The Joint Requirements Oversight Council (JROC), the organization responsible for identifying and prioritizing warfighter requirements, must approve the ICD. To approve the ICD, the JROC reviews and validates the capabilities required to perform the defined mission, gap in capabilities required to perform the mission, and need to address the capability gap. The JROC may approve an ICD and recommend a non-material solution to meeting the military need, such as a change to strategy or tactics. If the JROC approves the pursuit of a material solution, the program enters the Defense Acquisition System (DAS, or “little ‘a’”). Documentation developed during the JCIDS process is used throughout the acquisition process.
The Budgeting Process: Planning, Programming, Budgeting and Execution System (PPBE)
The Planning, Programming, Budgeting, and Execution System (PPBE) develops DOD’s proposed budget for all acquisitions, including Major Defense Acquisition Programs (MDAPs). According to DOD, the PPBE is intended to provide combatant commanders the best mix of forces, equipment, and support within fiscal constraints.
The PPBE process consists of four stages: planning, programming, budgeting, and execution.
• Planning: During the planning stage, the needs of combatant commands are analyzed and the findings are published in the Joint Programming Guidance document, which guides the DOD components’ efforts to propose acquisition programs. The Planning phase is the definition and examination of alternative strategies, the analysis of changing conditions and trends, threat, technology, and economic assessments in conjunction with efforts to understand both change and the long-term implications of current choices.
• Programming: During the programming stage, proposed programs are fleshed out and the Program Objective Memorandum (a document that outlines the anticipated missions and objectives of the proposed weapon system and anticipated budget requirements) is submitted to propose these programs. These memoranda are reviewed and, as deemed appropriate, integrated into an overall Defense program. The Programming phase defines and analyzes alternative force structures, weapon systems, and support systems together with their multi-year resource implications and the evaluation of various tradeoff options.
• Budgeting: Budgeting occurs concurrently with the programming stage. Proposed budgets are reviewed in a different manner than proposed programs. Upon completion of a program decision or as a result of a budget review, Program Budget Decisions are issued. The Budgeting phase includes formulation, justification, execution, and control of the budget. The primary purpose is to scrutinize the first one or two years of a programs budget to ensure efficient use of resources.
• Execution: Execution occurs simultaneously with the program and budget reviews. During execution, programs are evaluated and measured against established performance metrics, including the rates of funding obligations and expenditures.
Acquisition Category (ACAT)
Each defense program falls into an Acquisition Category (ACAT) depending on its overall funding level and importance. The category dictates the level of oversight a program will require and that oversight is provided by a Milestone Decision Authority (MDA) which is appointed by DoD senior leadership. The most expensive defense programs are known as Major Defense Acquisition Programs (MDAPs) or Major Automated Information System (MAIS) and have the most extensive statutory and regulatory reporting requirements.
The ACAT levels are shown below:
• ACAT I: R&D of more than $480M and total procurement $2.79 Billion
• ACAT II: R&D of more than $185 and total procurement $835 Million
• ACAT III: Less than ACAT II
• ACAT IV: Only for the Navy and Marines
The Defense Acquisition System (DAS)—for developing and/or buying the item.
The Acquisition Process is the management process of a defense program. It’s an event-based process where a defense program goes thru a series of processes, milestones, and reviews from beginning to end. Each milestone is the culmination of a phase were it’s determined if a program will proceed into the next phase. The management technique that integrates all these essential acquisition activities is called Integrated Product and Process Development (IPPD).
Each acquisition program, such as the programs for the F-35, Littoral Combat Ship, or Expeditionary Fighting Vehicle, is managed by an acquisition program office. The program office is headed by a Program Manager. Program Managers can be military officers or federal civil servants. They are usually supported by a staff that can include engineers, logisticians, contracting officers and specialists, budget and financial managers, and test and evaluation personnel. Program managers usually report to a Program Executive Officer. Program Executive Officers can have many Program Managers who report to them. Program Executive Officers can also be military officers or federal civil servants. They report to a Component Acquisition Executive. Most Component Acquisition Executives report to the Under Secretary of Defense for Acquisition, Technology, and Logistics, who also serves as the Defense Acquisition Executive (DAE)
The Federal Acquisition Regulation states that “Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of source, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract.”
Milestone Decision Authority (MDA)
The official responsible for deciding whether a program meets the milestone criteria and may proceed to the next phase of the acquisition process is referred to as the Milestone Decision Authority (MDA). Depending on the program, the MDA can be the Under Secretary of Defense (Acquisition, Technology, & Logistics), the head of the relevant DOD component, or the Component Acquisition Executive.
Materiel Development Decision review
To enter the Defense Acquisition System, a Materiel Development Decision review is held. A Materiel Development Decision review is where the determination is made whether a new weapon system is required to fill the identified gap or whether a non-materiel solution, such as a change in training or strategy, is sufficient. If a materiel solution is recommended, an Initial Capabilities Document is created.
The Acquisition Process is made up of five (5) phases. Each phase has specific DoD regulations and federal statute that must be met. At the end of each phase there is a Milestone Review (A,B,C) to determine if the program has met these required regulations and statues to continue on into the next phase.
The Defense Acquisition System uses “milestones” to oversee and manage acquisition programs. At each milestone, a program must meet specific statutory and regulatory requirements before the program can proceed to the next phase of the acquisition process. There are three milestones:
• Milestone A—initiates technology development,
• Milestone B—initiates engineering and manufacturing development, and
• Milestone C—initiates production and deployment.
Once the decision is made to develop a material solution, a program can enter the acquisition system at any point in the process as long as the program meets the requirements for that phase of the system. For example, a program can begin at Milestone B if a Material Development Decision is made, the program meets the criteria for entering into Milestone B as set forth by statue and DOD policy, and the MDA authorizes the program to enter at Milestone B.
The Five phases are listed below
Materiel Solution Analysis Phase
The purpose of the Materiel Solution Analysis or MSA phase is to select the most promising technology that can meet a user need. The Materiel Solution Analysis Phase assesses potential materiel solutions for a military need, and begins only after an Initial Capabilities Document has been approved by the JROC.
During this phase, an Analysis of Alternatives is conducted and a Technology Development Strategy is created. The purpose of the Analysis of Alternatives is to explore alternative methods of meeting the identified requirement. The analysis should include the comparative effectiveness, cost, schedule, concepts of operations, overall risks, and critical technologies associated with each proposed alternative, including the sensitivity of each alternative to possible changes in key assumptions or variables. The Analysis of Alternatives also addresses the fully burdened cost of fuel for each alternative, when appropriate.
Another major activity during this period is to establish a Program Manager or Program Management Office for this initiative. Concurrently interaction continues with the user community that develops a draft Capability Development Document or CDD. Work also continues on the budget or PPBE process so that funding can be put in place for Milestone A.
This phase encompasses the Material Development Decision review. At the review, JROC recommendations are presented by the Joint Staff, and the relevant component presents the Initial Capabilities Document, which details the operational need for a materiel solution.
The materiel solution-phase ends when the Analysis of Alternatives is completed, the lead component recommends materiel solutions identified by the Initial Capabilities Document, and the program meets the criteria for the milestone where the program will enter the acquisition system.
Technology Development phase
To enter the Technology Development phase of the acquisition system, a program must have an approved AoA, full funding for the technology development phase, and pass Milestone A. To pass Milestone A, the lead component must submit a cost estimate for the solutions identified in the AoA, and the MDA must approve the material solution and the Technology Development Strategy. During this phase, technologies are developed, matured, and tested. To be considered mature enough for product development, technologies must be tested and demonstrated in a ‘relevant’—or preferably, ‘operational’—environment.
In addition, a Capability Development Document and Reliability, Availability, and Maintainability strategy must be developed. Reliability, Availability, and Maintainability (RAM) refers to the reliability, availability, and maintainability of a system. Reliability is the probability of a system performing a specific function under stated conditions for a specified time. Availability is the measure of time a system is operable and able to be committed to a mission. Maintainability is the extent to which a system can be kept in or restored to a specific operating condition.
This phase is also where competitive prototyping occurs, which is when competing industry teams develop competing prototypes of a required system. The Technology Development Phase is complete when, among other things, an affordable program (or increment) is identified and the technology and manufacturing processes have been demonstrated in a relevant environment.
Engineering and Manufacturing Development Phase
The Engineering and Manufacturing Development Phase is where a system is developed, all technologies and capabilities are fully integrated into a single system (full system integration), and preparations are made for manufacturing (including developing manufacturing processes, designing for mass production, and managing cost). To enter this phase of the acquisition system, a program must have mature technology, approved requirements,26 full funding, and pass Milestone B. To pass Milestone B, the MDA must, among other things, approve the Acquisition Strategy, the Acquisition Program Baseline, and the type of contract that will be used to acquire the system. Before Engineering and Manufacturing Development can occur, a program must have approved Key Performance Parameters (KPPs). These KPPs can be amended later.
Most programs begin at Milestone B. Engineering and Manufacturing Development consists of two sub-stages: system integration known as Integrated System Design) and system demonstration (known as System Capability & Manufacturing Processes Demonstration). During system integration, the various subsystems are integrated into one system and a development model or prototype is produced. For example, on an aircraft carrier, system integration would be when the aircraft launching system, radar, nuclear reactor, and other subsystems are all integrated onto the ship.
To move from system integration to system demonstration, the MDA must complete a Post-Preliminary Design Review (PDR) and Post-Critical Design Review (CDR) Assessment. These assessments review the extent to which the system meets requirements and the overall design is mature (sufficiently complete), respectively. Not all technologies intended for the system are required to be mature to proceed to Milestone B. Some technologies that are still immature may remain in technology development while others proceed to Milestone B as long as the technologies proceeding to Milestone B provide an affordable, militarily useful capability. DOD’s approach to proceeding with detailed design and integration of mature technologies while continuing risk reduction of other less
mature technologies that will be integrated later is called Evolutionary Acquisition.
During system demonstration, the model or prototype enters into developmental testing to demonstrate its military usefulness (consistent with the Key Performance Parameters), and that the system can be supported through manufacturing processes. Much of the testing and evaluation of the system occurs in this phase. This phase is complete when, among other things, the system meets performance requirements as demonstrated by a model (that is similar to the expected final product) in an intended environment, and when manufacturing processes have been demonstrated.
Production and Deployment phase
The Production and Deployment phase is where a system is produced and deployed. To enter this phase, a program, among other things, must have passed developmental testing and operational assessment demonstrated that it is interoperable with other relevant systems, and can be supported operationally, shown that it is affordable, be fully funded, and pass Milestone C. At Milestone C, the MDA authorizes the beginning of low-rate initial production, which is intended to both prepare manufacturing and quality control processes for a higher rate of production and provide test models for operational test and evaluation (OT&E). Upon completion of OT&E, demonstration of adequate control over manufacturing processes, and with the approval of the MDA, a program can go into full-rate production. When enough systems are delivered and other pre-defined criteria are met, an Initial Operating Capability (IOC) can be attained, allowing for some degree of operations. Full Operational Capability (FOC) is achieved when the system is ready to operate as required
Operations & Support (O&S) Phase: a system is used and supported by users in the field.
The Operations and Support (O&S) Phase is where a system is used and supported by users in the field. The main focus on this phase is the execution of a support system that sustains the system in the most cost effective manner possible. The second main focus of this phase is the disposal of a system when it has reached its useful life. Operations and support is the final and longest phase. It is also the most expensive. To enter this phase you must have an approved Capability Production Document(CPD), an approved Life Cycle Sustainment Plan (LCSP) and a successful Full Rate Production system (FRP). Major activities are supporting operational units for full system life and dispose of the system at the end of life.
A major focus during the sustainment effort of the Operations and Support (O&S) Phase is identifying root causes and resolutions for safety and critical readiness degrading issues. These efforts include participating in Trade Studies and decision making relative to changes to the product support package, process improvements, modifications, upgrades, and future increments of the system. All these changes need to consider the operational needs and the remaining expected service life, Interoperability or technology improvements, parts or manufacturing obsolescence, aging aircraft (or system) issues, premature failures, changes in fuel or lubricants, and Joint or service commonality.
New DoDD 5000.01 Defense Acquisition System Policy
The newly rewritten Directive 5000.01 is a high-level policy that aims to empower program managers, simplify acquisition policy and rely more on data-driven analysis. In short, the new policy’s main purpose is to speed up the DOD acquisition at a time it wants to rapidly modernize into a digital force.
The policy also implements the Adaptive Acquisition Framework, which includes new software purchasing pathways. The policy is related to but doesn’t directly reference the department’s push for a new “color of money” for software purchases. Acquisition leaders say it will lead to greater innovation and easier purchasing of advanced technology.
“Representing one of the most transformational changes to acquisition policy in decades, the DoDD 5000.01 re-write was part of a comprehensive redesign of the DoD 5000 Series acquisition policies, which were streamlined and modernized to empower program managers, facilitate flexibility and enhance our ability to deliver capability at the speed of relevance,” DOD said in a statement.
DOD continues to push for a new “color of money,” or budget activity (BA), for program managers to use when buying code. Having a new way to purchase software would allow the department to sidestep policies designed for purchasing things like tanks when purchasing software, which often slows down the process.
The DAS will:
(1) Employ the following operating policies:
(a) Empower program managers (PMs).
(b) Simplify acquisition policy.
(c) Employ tailored acquisition approaches.
(d) Conduct data driven analysis.
(e) Actively manage risk.
(f) Emphasize product support and sustainment.
(2) Use an adaptive acquisition framework to emphasize these principles.
The DoD Components will acquire systems, subsystems, equipment, supplies, product support, sustainment, and services in accordance with the statutory requirements for competition. (1) Acquisition managers will take all necessary actions to promote a competitive environment, including consideration of alternative systems, data rights, and modular design to meet current and future mission needs. (2) Planning and contracting for appropriate amounts of data rights, and incorporating a modular and open design to enable upgrades, technology refreshes, and future re-competes may enhance competition throughout the life cycle.
Employ Performance Based-Acquisition Strategies.
To maximize competition, innovation, and interoperability, acquisition managers will consider and employ performance-based strategies for acquiring and sustaining products and services. “Performance-based strategy” means a strategy that supports an acquisition approach structured around the results to be achieved as opposed to the manner by which the work is to be performed. This approach will be applied to all new procurements and upgrades, as well as reprocurements of systems, subsystems, and spares that are procured beyond the initial production contract award.
Plan for Product Support.
Product support strategies (PSSs) will be informed by a business case analysis conducted pursuant to Section 2337 of Title 10, U.S.C. The PSS is designed to facilitate enduring and affordable sustainment consistent with warfighter requirements. Support metrics will be established, tracked, and adjusted where needed to ensure product support objectives are achieved and sustained over the system life cycle. PSSs include the best use of public and private sector capabilities through government and industry partnering initiatives, in accordance with statutory requirements.
Implement Effective Life-Cycle Management.
The PM is accountable for achieving program life-cycle management objectives throughout the program life cycle. Planning for operations and support will begin at program inception, and supportability requirements will be balanced with other requirements that impact program cost, schedule, and performance. Performance based life-cycle product support implements life-cycle system management.
Implement Reliability and Maintainability by Design.
DoD Components, MDAs, and acquisition leaders must implement fundamentals of design, manufacturing, and management that result in reliable and maintainable systems. These key fundamentals must be established early in the acquisition process and improved over the service life of the system.
Maintain a Professional Workforce
The acquisition workforce is a critical asset and essential to achieving the defense strategy. Consequently, the DoD must recruit, develop, and maintain a fully proficient military and civilian acquisition workforce that is highly skilled across a broad range of management, technical, and business disciplines.