A New Way to Start Acquisition Programs: DoDI 5000.02 and WSARA of 2009

Bill Fast, CDFM-ACapital and Northeast Region

Defense Acquisition University703-805-2107

william.fast@dau.mil

ASMC PDI Workshop 50, 4 Jun 2010, 0915-1030

Objectives• Explain the major changes made to the

Defense Acquisition Management Systemin December 2008

• Identify the major provisions of the 2009Weapon Systems Acquisition Reform Act (WSARA of 2009)

• Reflect on how these changes shift the paradigm through which we understand how to start acquisition programs

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Motivations for Revision of DoDI 5000.2• Most potential programs proceeding to Milestone Bwithout a predecessor review to assess the capabilityneed and direct the analysis of alternatives

• Technical maturity not adequately demonstrated prior toprogram initiation

• Program cost, schedule, and performance inadequatelyinformed by design considerations

• No formal / effective opportunity between Milestone Band Milestone C for Milestone Decision Authority (MDA)to assess progress, adjust/refer requirements, orconsistent with statute, restructure the program

• Requirements “creep” continuing to destabilizeprograms

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New DoD Instruction 5000.02 (Dec 08) 1 - Initial Materiel Investment Decision

2 - Analysis of Alternatives

3 - Component Cost Estimate & Affordability Decision

4 - Cost-Performance Trades from Competitive Prototyping

5 – Systems Engineering Reviews (post assessments) raisedto Milestone Decision Authority (MDA) level

6 - Configuration Steering Boards Stabilize Requirements

PDR or PDR

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The Defense Acquisition Management System 2008

PDR Before Milestone B

• Mandatory for MDAPs• PDR Report to MDA prior to MS B• Planned for in Technology Development

Strategy• Includes recommended requirements

trades

B

Engineering & Manufacturing Development

C

TechnologyDevelopment

PDR CDR

CDD CPDPost CDRAssessment

PDR

Preliminary Design Review

or

PDR After Milestone B

• Planned for in Acquisition Strategy• PDR Report provided to MDA prior to Post

PDR Assessment• Reflects requirements trades• At Post PDR Assessment, MDA considers

PDR report; determines action(s) required to achieve APB objectives and issues ADM

Post PDRAssessment

4

Independent Variable,

$X1

Cost and Performance Trades

Y1

$X2

Y2

Cost, $X

Trade Space

5

Joint Air-to-Ground Missile (JAGM)

USA / USN Lockheed Martin RaytheonContract Type CPIF CPIFTD Contract Costs $66.7 M $66.7 MRequirements validated CDD, Jan 08; 6 KPPsTech Dev Phase 27 monthsPreliminary Design Rev 3QFY10TRL / MRL (at MS B) 6+ / 6 (Program Office Estimates)

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Required Signed and Documented Component-level Cost Positions for Milestone Reviews

(OSD Memo, Chairman, CAIG and Dir, ARA, March 12, 2009)

• Purpose: to strengthen and improve transparency in cost estimation review procedures and to support statutory certification and regulatory requirements

• Policies:– Signed / documented Component-level cost position required for all

Milestone A, B, C, and Full Rate Production Decisions– Components must fully fund to this cost position in current

President’s Budget Future Years Defense Program (FYDP), or commit to full funding in next President’s Budget FYDP

• Expectation:– Deputy Assistant Secretary for Cost and Economics signs the

Component Cost Position– Service Acquisition Executive and Chief Financial Officer

endorse and certify that the FYDP fully funds program consistent with component cost estimate

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The Defense Acquisition Management System(DoD Instruction 5000.02, Enclosure 2, Figure 1)

Full Fundingin FYDP

Updated Component Cost Position

Appropriated Funds to Support Contracts

• Realistic Cost Estimates• Full Funding in the FYDP• Appropriated Funds

*Full Fundingin FYDP

Full Fundingin FYDP

Full Fundingin FYDP

*Expectation of OSD Memo, Chairman, CAIG and Director, ARA, March 12, 2009,SUBJ: Required Signed and Documented Component-level Cost Position for Milestone Reviews

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Implementation of WSARA of 2009(Decision-Type Memorandum 09-027, 4 Dec 09)

1. Analysis of Alternatives Study Guidance2. Revised MDAP Definition3. Competitive Prototyping4. Preliminary Design Reviews (PDR)5. Assessment of MDAP Technologies6. Cost Estimation7. Critical Cost Growth8. Systems Engineering9. Developmental Test and Evaluation (DT&E)10. Acquisition Strategies to Ensure Competition11. Competition and Considerations for Operation and Sustainment

(O & S) of Major Weapon Systems12. Performance Assessments and Root Cause Analysis (PARCA)13. Certification IAW 10 USC 2366a & 2366bPhoto: President Barack Obama hands a pen to U.S. Rep. Robert Andrews (D-NJ) as he signs the Weapons Systems Acquisition Reform Act in the Rose Garden at the White House Friday, May 22, 2009. Standing from left are: Andrews, Rep. John McHugh (R-NY), Sen. Carl Levin (D-MI), Rep. Ike Skelton (D-MO) and Rep. Mike Conaway (R-TX). Official White House Photo by Samantha Appleton

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MDA Certifications (10 USC Sec 2366)Milestone A (Sec 2366a)• Program fulfills an approved initial

capabilities document

• Program is being executed by an entity with a relevant core competency as identified by SECDEF

• If program duplicates a capability already provided by an existing system, the duplication is necessary and appropriate

• A cost estimate for the program has been submitted and the level of resources required to develop and procure the system is consistent with the priority level assigned by the JROC

*Added by Sec 205, WSARA of 2009, May 22, 2009

Milestone B (Sec 2366b)• Program is affordable when considering using alternative

systems

• Program is affordable on unit cost and total acquisition cost basis in current FYDP

• Reasonable cost and schedule estimates have been developed

• Funding is available to execute product development and production plan in FYDP

• PDR / post-PDR assessment certifies high likelihood of accomplishing intended mission*

• Appropriate market research has been conducted prior to technology development to reduce duplication

• Analysis of alternatives was completed with respect to the program

• JROC has done its duties under 10 USC Sec 18l(b), including an analysis of operational requirements for the program

• Technology in the program has been demonstrated in a relevant environment, as determined by MDA on basis of independent assessment by Dir, Defense Research & Engineering*

• Program demonstrates a high likelihood of accomplishing its intended mission

• Program complies with all relevant policies, regulations, and directives of DoD

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What about Existing MDAPs ?

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MRAP – All Terrain Vehicles MQ-9 Reaper

Variant to ACAT 1D MRAP ACAT 2 to ACAT 1D, 2009

Production, based upon updated MRAP CPD, 2009

EMD Phase, withMS C planned 3QFY10

“Chief among institutional challenges facing the Department is acquisition.”

Secretary of Defense Direction

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Planning, Programming & Budgeting System

Acquisition Management System

Requirements Generation System New

DoDD 5000.1DoDI 5000.2Defense

AcquisitionGuidebook

Joint Capabilities Integration & Development System–signed May 04

QDR

Decision Support Systems

Planning,Programming,Budgeting, &

Execution(PPBE)

“Big A” Acquisition

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Operations & Support

The Defense Acquisition Management System 2008

Joint Concepts

Capabilities - Based Assessment

OSD/JCS COCOM FCB

Strategic Guidance

Incremental Development

A

User Needs

Production & Deployment O&S

Technology Opportunities & Resources

MDDICDTechnology

DevelopmentEngineering & Manuf

Development MaterielSolutionAnalysis

JCIDS Acquisition Process

B C

“Following the Materiel Development Decision (MDD), the MDA may authorize entry into the acquisition management system at any point consistent with phase-specific entrance criteria and statutory requirements.”

CDD CPD

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From two processes… To one process…

Evolutionary Acquisition

• Capability delivered in increments, recognizing up front need for future capability improvements

• Each increment: - depends on mature technology

- is a militarily useful and supportable operational capability

- Successive Technology Development Phases may be needed to mature technology for multiple increments

• Incremental Development: End-state is known; requirements met over time in several increments

• Spiral Development: End-state is not known; requirements for increments dependent upon technology maturation and user feedback.

No spirals!

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User Need• JCIDS Capabilities-Based

Assessment (CBA)• Initial Capabilities

Document (ICD)

Pre-Systems Acquisition

Technology Development

MaterielSolutionAnalysisMateriel Development Decision

User Needs

BA

Technology Opportunities & Resources

Technology Opportunities• All sources foreign & domestic• SBIR Program• S&T Activities: ATDs, JCTDs,

Qualified Prototype Projects, Joint Warfighting Experiments.

New terms/requirements in blue bold italics 16

Materiel Development Decision (MDD)

MDA:– Determines acquisition phase of entry– Identifies initial review milestone– Designates Lead DoD Component– Approves Acquisition Decision

Memorandum(ADM)

• Initial Capabilities Document (ICD)• Director, CAPE will prepare and approve AoA study guidance• AoA Plan due immediately following the MDD

New terms/requirements in blue bold italics

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Materiel SolutionAnalysis

MaterielDevelopmentDecision

Materiel Solution Analysis

Purpose: Assess potential materiel solutions

• Begin the phase: Approved ICD and study guidance for conducting AoA.

• Activities during the phase: Conduct AoA, develop Technology Development Strategy (TDS) & draft CDD

• Guided by: ICD and AoA Plan• End the phase: Materiel solution to capability need in ICD

recommended by lead Component conducting AoA, and phase-specific exit criteria have been satisfied

New terms/requirements in blue bold italics

A

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MDA approves:

–Materiel solution

–Technology Development Strategy (TDS)**

–Exit criteria for next phase

–Milestone A Certification (10 USC 2366a)

–Acquisition Decision Memorandum (ADM)

Milestone A

** The PM may submit the TDS to the MDA significantly before Milestone A (approximately 3-6 months). Approval of the TDS allows release of formal RFPs for the TD phase prior to the milestone review as well as proposal evaluation and source selection, as time permits. (Results of source selection though cannot be released, and contract award cannot be made, until after the milestone review.)

New terms/requirements in blue bold italics19

TechnologyDevelopment

Technology Development

APurpose: Reduce Technology Risk, Demonstrate Critical Technology on Prototypes, Complete Preliminary Design

Begin the phase: MDA approved materiel solution and TDS; full funding in FYDP(Note: this is a change since publication of DoDI 5000.02 – CAIG/ARA Memo, 12 Mar 09, SUBJ: Required Signed and Documented Component-level Cost Position for Milestone Reviews); ICE required for potential ACAT I/IA programs (also new)

Activities during the phase: Competitive prototyping; Develop RAM strategy; conduct Preliminary Design Review (PDR)

Guided by: ICD & TDS and supported by SE planningEnd the phase: Affordable increment of military-useful capability identified;

technology demonstrated in relevant environment; manufacturing risks identified; PDR conducted for candidate solutions; system or increment ready for production within short time frame (normally less than 5 years for weapon systems)

New terms/requirements in blue/red bold italics

B

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Technology and Manufacturing Readiness

MaterielSolutionAnalysis

Engineering &ManufacturingDevelopment

PRODUCTION &DEPLOYMENT

B CAOPERATIONS &

SUPPORT

MaterielDevelopmentDecision

Post CDRAssessment

FRPDecisionReview

TECHNOLOGYDEVELOPMENT

Analytical/Experimental

CriticalFunction/

Characteristic

Proof ofConcept

ComponentAnd/or

BreadboardValidation

In aLaboratory

Environment

SystemPrototype

Demonstrated

In anOperational

Environment

ActualSystem

CompletedQualifiedThroughTest and

Demonstration

ActualSystem

“MissionProven”Through

SuccessfulOperations

Capability to ProduceSystems, SubsystemsOr Components in a

Production RepresentativeEnvironment

Full RateProduction

Demonstrated.Lean Production

Practices In Place

Low RateProduction

Demonstrated.Capability InPlace for FRP

Pilot LineCapability

Demonstrated.Ready for LRIP

Cost Model UpdatedTo System Level

Unit Cost ReductionEfforts Underway

Engineering Cost Model

Validated

FRP UnitCost Goals

Met

LRIP CostGoals Met

Learning CurveValidated

Section 2366b of Title 10, United States Code, requires certification that: the technology in the program has been demonstrated in a relevant environment to enter Milestone B. [TRL 6]

Technology Readiness

LevelsDefense Acquisition

Guidebookpara. 10.5.2

Manufacturing Readiness

LevelsDraft MRA Deskbook

May 2008

IOC FOC

Capability to produceTechnology In Lab

Environment.Manufacturing Risks

Identified

ManufacturingCost Drivers

Identified

ManufacturingFeasibility Assessed.Conceptsdefined/

developed

TRLs 1-3

MRL 4 MRL 7 MRL 8 MRL 9 MRL 10MRLs 1-3

TRL 4 TRL 7 TRL 8 TRL 9

ComponentAnd/or

BreadboardValidation

In aRelevant

Environment

Cost ModelConstructed

System/Subsystem

Model orPrototype

Demonstrated

In a RelevantEnvironment

Capability toProduce System/

SubsystemPrototypes

Detailed Cost AnalysisComplete

Capability toProduce Prototype

Components

MRL 5 MRL 6

TRL 5 TRL 6

Joint Lightweight Tactical Vehicle (JLTV)

USA / USMC BAE Systems AM General/GDLS Lockheed MartinContract Type Various Various CPFFTD Contract Costs $62.9 M $61.3 M $53.4 MRequirements draft CDDTech Dev Phase 27 monthsPrelim Design Rev June - July 2009TRL / MRL 5 (underbody) / TD protoypes built on assembly line

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MDA approves:– Program Initiation (for most programs)– Entry into EMD– Acquisition Strategy (AS)** – Acquisition Program Baseline– LRIP quantities– Exit criteria for next phase– Type of Contract– Milestone B Certification (10 USC 2366b)– ADM

Milestone B

New terms/requirements in blue bold italics

** The PM may submit the AS to the MDA significantly before Milestone B (3-6 months). Approval of the AS allows release of formal RFP(s) for the EMD phase prior to the milestone review as well as proposal evaluation and source selection, as time permits. (Results of source selection though cannot be released, and contract award cannot be made, until after the milestone review.)

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Engineering and Manufacturing Development

Engineering & Manufacturing DevelopmentPurpose: Develop a system or increment of capability, develop an

affordable manufacturing process, minimize logistics footprint

B

Integrated System Design

System Capability & Manufacturing Process Demonstration

•Begin the effort Mature Technology; Approved Requirements; Full Funding in FYDP

•Activities during the effort: Define System of System Functionality & Interfaces, Complete Detailed Design, System-Level PDR (as needed)/CDR, Establish Product Baseline,

•Guided by: CDD, Acq Strategy, SEP & TEMP

•End the effort: Complete System-Level CDR and Post-CDR Assessment by MDA

•Begin the effort: Post-CDR Assessment and Establishment of initial Product Baseline

•Activities during the effort: Developmental Testing (DT) Assesses Progress Against Technical Parameters, and Operational Assessments (OA) Against CDD

•Guided by: CDD, Acq Strategy, SEP & TEMP•End the effort: System Demonstrated in

Intended Environment using production-representative articles; Manufacturing Processes Demonstrated; Meets Exit Criteria and MS C Entrance Requirements

New terms/requirements in blue bold italics

Post CDRAssessment

Post PDRAssessment

C

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Paradigm Shifts Based UponDoDI 5000.02 and WSARA of 2009

New Paradigm• Cost and schedule must be considered

before setting performance objectives

• Costs estimated at 80% confidence level (for MDAPs)

• Competitive prototyping before Milestone B

• MDA’s post-PDR & CDR assessments elevate Systems Engineering process

• Independent technological maturity and integration risk assessment by Director, Defense Research and Engineering

• Ensure competition at both prime and subcontract levels

Old Paradigm• Performance objectives often established

before cost and schedule considered

• With exception of high-risk elements, most costs estimated at 50% confidence

• Little prototyping due to cost

• PDR and CDR were recommended as “best practice” technical reviews

• Program Manager assessed technology readiness level in accordance with Defense Acquisition Guidebook

• Competition at prime level; prime responsible for subcontract competition

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Small Diameter Bomb (SDB) II

USAF / USN Boeing / Lockheed RaytheonContract Type CPFF CPFFTD Contract Costs $161.4 M $161.4 MRequirements validated CDD, June 2009; 5 KPPsTech Dev Phase 42 monthsCritical Design Rev within 6 months of MS B (June 2010)TRL / MRL (at MS B) 6 / 6 (Program Office Estimates)

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For Additional Information • DoDD 5000.01; DoDI 5000.02; Defense Acquisition

Guidebook

https://acc.dau.mil/dag

• Integrated Framework Chart

https://acc.dau.mil/ifc/

• DAU Rapid Deployment Training Topics

DoD Instruction 5000.02Frequently Asked Questions (FAQ)Weapon Systems Acquisition Reform Act of 2009

http://www.dau.mil/images/Pages/RDT.aspx

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On-Site, Targeted Training

(by Defense Acquisition University)

• TTB 002 Budget Execution

•TTB 004 DoD Budget “Primer”

• TTB 007 POM Development Process

• TTB 009 Business Financial Management Integrationinto Programs

All training will be tailored to the specific needs of the customer

Request at:http://icatalog.dau.mil/onlinecatalog/targeted_training.aspx

Workshop Take-Aways• DoDI 5000.02 (Dec 08) and WSARA of 2009

mandate changes to acquisition management system that attempt to fix mismatches between requirements, cost estimates, and budgets

• Cost and schedule estimates and program affordability must be considered before validation of system capability documents

• Knowledge gained from mandated competitive prototyping should help assess technologymaturity and inject realism into cost estimates

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