Defense_Acquisition_Guidebook_(DAG).pdf

DEFENSE ACQUISITION GUIDEBOOK

FOREWORD

The Defense Acquisition System exists to manage the Nation's investments in technologies, programs, and product support necessary to achieve the National Security Strategy and support the United States Armed Forces. In that context, our continued objective is to rapidly acquire quality products that satisfy user needs with measurable improvements to mission capability at a fair and reasonable price. The fundamental principles and procedures that the Department follows in achieving those objectives are described in DoD Directive 5000.1 and DoD Instruction 5000.2. The Defense Acquisition Guidebook is designed to complement those policy documents by providing the acquisition workforce with discretionary best practice that should be tailored to the needs of each program.

Acquisition professionals should use this Guidebook as a reference source supporting their management responsibilities. As an “on-line” resource, the information is limited only by the user’s interest or need. Some chapters contain general content; they provide individual topic discussions and describe processes and considerations that will improve the effectiveness of program planning. Some chapters may provide a tutorial on the application of these topics to the acquisition framework. Depending on the subject matter, a chapter may contain general background information, tutorial discussions, and/or discussions of the detailed requirements for each milestone decision and phase. All chapters contain non-mandatory staff expectations for satisfying the mandatory requirements in DoD Instruction 5000.2.

Each chapter is designed to improve understanding of the acquisition process and ensure adequate knowledge of the statutory and regulatory requirements associated with the process. Discussions, explanations, and electronic links to related information enable the “reader” to be efficient, effective, innovative, and disciplined, and to responsively provide warfighting capability. Each chapter lists potential ways the program manager or assigned manager can satisfy mandatory process requirements and meet staff expectations for other activities. Differences of view regarding discretionary practice will be resolved by the Milestone Decision Authority.

The Guidebook should be viewed as an electronic resource rather than a “book.” The “reader” “navigates” the information instead of “leafing” through hundreds of physical, collated pages. Navigation is electronic movement through the reference system. There are three ways to view the information:

• Select the Document View tab to review Guidebook information page-by-page.

• Select the Lifecycle Framework tab to review statutory and regulatory requirements and related best practice for each Milestone and acquisition phase. And

• Select the Functional/Topic View tab to review comprehensive discussions of key acquisition topics.

(There is also an on-line tutorial available that goes into greater detail and describes the full capability provided by the Guidebook.)

At the chapter level, you may scroll up and down through the text, and jump between previous and next paragraphs. Throughout the text, hyperlinks let you electronically jump to related information. Many times, the links take you to another paragraph in the Guidebook. Some links take you to related text in either acquisition policy documentsor the Joint Capabilities Integration and Development System documents.

Other links will take you to external references, such as United States Code, the Federal Acquisition Regulation, or other formal DoD publications. Still others will take you to related, informal sources that are rich in information, such as the various Defense Acquisition University Communities of Practice.

To maximize the utility of this system, we recommend you use a computer that has Internet Explorer 6.x or higher, and is JavaScript enabled. The hardware requirement is whatever is necessary to support Internet Explorer 6.

Overview of the Defense Acquisition Guidebook This Guidebook contains the following 11 chapters:

Chapter 1, Department of Defense Decision Support Systems, presents an overview of the Defense Department’s decision support systems for strategic planning and resource allocation, the determination of capability needs, and the acquisition of systems.

Chapter 2, Defense Acquisition Program Goals and Strategy, discusses acquisition program goals and the topics the program manager should consider in developing a strategy for the acquisition program. It addresses the required information associated with the Acquisition Program Baseline and the program’s Acquisition Strategy

Chapter 3, Affordability and Lifecycle Resource Estimates, addresses acquisition program affordability and resource estimation.

Chapter 4, Systems Engineering, covers the system design issues facing a program manager, and details the systems engineering processes that aid the program manager in designing an integrated system that results in a balanced capability solution.

Chapter 5, Lifecycle Logistics, provides the program manager with a description of Lifecycle Logistics and its application throughout the system life cycle, from concept to disposal.

Chapter 6, Human Systems Integration, addresses the human systems elements of the systems engineering process. It will help the program manager design and develop systems that effectively and affordably integrate with human capabilities and limitations; and it makes the program manager aware of the staff resources available to assist in this endeavor.

Chapter 7, Acquiring Information Technology and National Security Systems, explains how the Department of Defense complies with statutory and regulatory requirements for acquiring IT and NSS systems and is using a network-centric strategy to transform DoD warfighting, business, and intelligence capabilities. The chapter also provides descriptions and explanations of the Clinger-Cohen Act, the

Business Management Modernization Program and many other associated topics and concepts, and discusses many of the activities that enable the development of net-centric systems.

Chapter 8, Intelligence, Counterintelligence, and Security Support, describes program manager responsibilities regarding research and technology protection to prevent inadvertent technology transfer, and provides guidance for and describes the support available for protecting those technologies.

Chapter 9, Integrated Test and Evaluation, discusses many of the topics associated with test and evaluation, to include oversight, Developmental Test and Evaluation, Operational Test and Evaluation, and Live Fire Test and Evaluation. The chapter enables the program manager to develop a robust, integrated test and evaluation strategy to assess operational effectiveness and suitability, and to support program decisions.

Chapter 10, Decisions, Assessments, and Periodic Reporting, prepares the program manager and Milestone Decision Authority to execute their respective oversight responsibilities.

Chapter 11, Program Management Activities, explains the additional activities and decisions required of the program manager, not otherwise discussed in earlier chapters of this Guidebook.

CHAPTER 1

Department of Defense Decision Support Systems

1.0. Overview

1.0.1. Purpose

This chapter provides background information about the environment in which the Department of Defense must operate to acquire new or modified materiel or services.

1.0.2. Contents

Section 1.1 presents an overview of each of the three, principal, decision support systems used in the Department of Defense to acquire materiel and services, and describes the integration of those systems. Sections 1.2 through 1.4 provide details of each of these systems: Section 1.2 discusses the Planning, Programming, Budgeting, and Execution process, employed by the Department of Defense to conduct strategic planning and make resource allocation decisions; Section 1.3 discusses the Joint Capabilities Integration and Development System used to determine military capability needs; and Section 1.4 discusses the formal Defense Acquisition System used to acquire that capability.

1.1. Integration of the DoD Decision Support System

The Department of Defense has three principal decision-making support systems, all of which were significantly revised in 2003. These systems are the following:

Planning, Programming, Budgeting and Execution (PPBE) Process - The Department's strategic planning, program development, and resource determination process. The PPBE process is used to craft plans and programs that satisfy the demands of the National Security Strategy within resource constraints.

Joint Capabilities Integration and Development System - The systematic method established by the Joint Chiefs of Staff for assessing gaps in military joint warfighting capabilities and recommending solutions to resolve these gaps. To ensure effective integration of the capabilities identification and acquisition processes, the Joint Capabilities Integration and Development System guidance (CJCS Instruction 3170.01 and Manual 3170.01) was developed in close coordination with the revision to the acquisition regulations (DoD 5000 series).

Defense Acquisition System - The management process by which the Department acquires weapon systems and automated information systems. Although the system is based on centralized policies and principles, it allows for decentralized and streamlined execution of acquisition activities. This approach provides flexibility and encourages innovation, while maintaining strict emphasis on discipline and accountability.

Together, illustrated in Figure 1.1.1, the three systems provide an integrated approach to strategic planning, identification of needs for military capabilities, systems acquisition, and program and budget development. The next three sections provide brief introduction to each of these decision support systems.

Figu

E) locate resources within the Department d y the n d to his re 1.1.1 DoD Decision Support System

1.2. Planning, Programming, Budgeting and Execution (PPB

Process The purpose of the PPBE process is to al of Defense. It is important for program managers and their staffs to be aware of the nature and timing of each of the events in the PPBE process, since they may be called upon to provide critical information that could be important to program funding and success.

In the PPBE process, the Secretary of Defense establishes policies, strategy, an prioritized goals for the Department, which are subsequently used to guide resource allocation decisions that balance the guidance with fiscal constraints.

The PPBE process consists of four distinct but overlapping phases:

Planning. The planning phase of PPBE, which is a collaborative effort b Office of the Secretary of Defense and the Joint Staff, begins with a resource informed articulation of national defense policies and military strategy know as the Strategic Planning Guidance. The Strategic Planning Guidance is use lead the planning process, now known as the Enhanced Planning Process. T process results in fiscally constrained guidance and priorities - for milita forces, modernization, readiness and sustainability, an ry d supporting business cument ance set of airly ing a he ce of re that n as s of Defense for decisions. These decisions are then reflected in an pdated budget submission provided to the OMB. After that, the overall DoD budget is provided as part of the President’s Budget request to the Congress.

processes and infrastructure activities - for program development in a do known as the Joint Programming Guidance. The Joint Programming Guid is the link between planning and programming, and it provides guidance to the DoD Components (military departments and defense agencies) for the development of their program proposal, known as the Program Objective Memorandum (POM).

Programming. The programming phase begins with the development of a POM by each DoD Component. This development seeks to construct a balanced programs that respond to the guidance and priorities of the Joint Programming Guidance within fiscal constraints. When completed, the POM provides a f detailed and comprehensive description of the proposed programs, includ time-phased allocation of resources (forces, funding, and manpower) by program projected six years into the future. In addition, the DoD Component may describe important programs not fully funded (or not funded at all) in the POM, and assess the risks associated with the shortfalls. The senior leadership in OSD and the Joint Staff review each POM to help integrate the DoD Component POMs into an overall coherent defense program. In addition, the OSD staff and the Joint Staff can raise issues with selected portions of any POM, or any funding shortfalls in the POM, and propose alternatives with marginal adjustments to resources. Issues not resolved at lower levels are forwarded to the Secretary for decision, and the resulting decisions are documented in the Program Decision Memorandum.

Budgeting. The budgeting phase of PPBE occurs concurrently with the programming phase; each DoD Component submits its proposed budget estimate simultaneously with its POM. The budget converts the programmatic view into the format of the Congressional appropriation structure, along with associated budget justification documents. The budget projects resources only two years into the future, but with considerably more financial details than the POM. Upon submission, each budget estimate is reviewed by analysts from t office of the Under Secretary of Defense (Comptroller) and the Offi Management and Budget (OMB). The purpose of their review is to ensu programs are funded in accordance with current financial policies, and are properly and reasonably priced. The review also ensures that the budget documentation is adequate to justify the programs presented to the Congress.

Typically, the analysts provide the DoD Components with written questions in advance of formal hearings where the analysts review and discuss the budget details. After the hearings, each analyst prepares a decision document (know a Program Budget Decision, or PBD) for the programs and/or appropriations under his or her area of responsibility. The PBD proposes financial adjustment to address any issues or problems identified during the associated budget hearing. The PBDs are staffed for comment and forwarded to the Deputy Secretary u

Execution. The execution review occurs simultaneously with the program and budget reviews. The purpose of the execution review is to provide feedback to the senior leadership concerning the effectiveness of current and prior resource allocations. Over time, metrics are being developed to support the execution review that will measure actual output versus planned performance for defense programs. To the extent performance goals of an existing program are not being met, the execution review may lead to recommendations to adjust resources and/or restructure programs to achieve desired performance goals.

PPBE Biennial Cycles. In 2003, the Department adjusted its planning, programming and budgeting procedures to support a two-year cycle that results in two-year budgets. The revised process is described in Management Initiative Decision (MID) 913, dated May 22, 2003. The concept in MID 913 is consistent with submission of a biennial DoD budget that is part of the President’s Budget request to Congress for even-numbered fiscal years (FY) (e.g., the FY 2004 President's Budget, submitted to Congress in March 2003, contained justification material for both FY 2004 and FY 2005). In this cycle, the even-numbered years are called on-years, while the odd-numbered years are called off-years. Figure 1. 2.1 displays a nominal timeline for the PPBE phases in an on-year.

Figure 1.2.1. Typical PPBE Biennial Cycle, "On-Year"

In practice, Congress does not actually provide the Department with biennial appropriations. An amended budget justification must be submitted for the second year of the original biennial request so that Congress will appropriate funds for that second year. The Department uses a restricted process in the off-year to develop an amended budget that allows for only modest program or budget adjustments. Figure 1.2.2. displays a nominal timeline for the limited off-year process.

Figure 1.2.2. Typical PPBE Biennial Cycle, "Off-Year" In the off-year, there are no significant changes to policy, strategy, or fiscal oint Programming Guidance is provided, it would only to guidance. In fact, there may be no issuance of revised Joint Programming Guidance. If revised J contain minor revisions (although it could direct studies to support major decisions on strategy or program choices for the following Strategic Planning Guidance or Joint Programming Guidance). In addition, in the off-year, the DoD Components do not provide revised POMs or budget estimates. Instead, the DoD Components are allowed to submit Program Change Proposals (PCPs) and/or Budget Change Proposals (BCPs) to account for fact-of-life changes (e.g., program cost increases or schedule delays). BCPs and PCPs are limited a single issue and must identify resource reductions to offset any program or budget cost growth. PCPs address issues over a multi-year period, whereas BCPs address issues focused on the upcoming budget year. PCPs are reviewed in a manner similar to on-year program issues, and BCPs are resolved through the issuance and staffing of PBDs.

From a larger perspective, the biennial PPBE cycle is designed to support and implement policy and strategy initiatives for each new four-year Presidential administration. Figure 1.2.3. depicts alignment of the biennial PPBE cycle ove a four-year term.

r

Figure 1.2.3. . PPBE Two-Year Cycles Corresponding to Four-Year Presidential Terms

In the first year of the administration, the President approves a new National Security Strategy, which establishes (1) the worldwide interests, goals, and objectives that are v to the national security, and (2) the foreign policy, worldwide commitments, and nation defense capabilities necessary to implement the national security goals and objectives.

Once the new administration's National Security Strategy is established, the Secretary o Defense, in consultation with the Chairman of the Joint Chiefs of Staff, leads the Quadrennial Defense Review (QDR). The QDR is a comprehensive review of all ital al f is not elements of defense policy and strategy needed to support the national security strategy.

The defense strategy is then used to establish the plans for military force structure, force modernization, business processes and supporting infrastructure, and required resources (funding and manpower). The QDR final report is provided to Congress in the second year of the administration. In the PPBE process, the QDR final report serves as the foundation document for defense strategy and business policy. Since this document available until the second year, the first year of the administration is treated a year, using the President's Budget inherited from the previous administration as a baseline. In the second year, which is treated as an on-year, the Strategic Planning Guidance and Joint Programming Guidance are rewritten to implement the QDR of the new administration.

s an off-oncepts-ts.

of doctrine, organization, aining, materiel, leadership and education, personnel and facilities (DOTMLPF) solutions, for purposes of this Guidebook, the focus remains on the pursuit of "materiel" solutions.

t int forces and to conduct flexible, distributed, and highly-networked with the ble s itizing joint military capability needs; these identified tion s.

1.3. Joint Capabilities Integration and Development System

The Joint Capabilities Integration and Development System (JSCIDS) is a joint-c centric capabilities identification process that allows joint forces to meet future military challenges. The Joint Capabilities Integration and Development System process assesses existing and proposed capabilities in light of their contribution to future joint concep Joint Capabilities Integration and Development System, supported by robust analytic processes, identifies capability gaps and potential solutions. While Joint Capabilities Integration and Development System considers the full range tr

Joint Capabilities Integration and Development System acknowledges the need to projec and sustain jo operations. Joint Capabilities Integration and Development System is consistent DoD Directive 5000.1 charge for early and continuous collaboration throughout the Department of Defense. Joint Capabilities Integration and Development System implements a capabilities-based approach that leverages the expertise of government agencies, industry, and academia. Joint Capabilities Integration and Development System encourages collaboration between operators and materiel providers early in the process, and enhances the ability of organizations to influence proposed solutions to capability shortfalls. Joint Capabilities Integration and Development System defines interoperable, joint capabilities that will best meet the future needs. The broader DoD acquisition community must then deliver these technologically sound, sustainable, and afforda increments of militarily useful capability to the warfighters.

The revolutionary transformation to Joint Capabilities Integration and Development System, coupled with the evolutionary emergence of a more flexible, responsive, and innovative acquisition process should produce better integrated and more supportable military solutions; a better prioritized and logically-sequenced delivery of capability to the warfighters, despite multiple sponsors and materiel developers; and an improved Science and Technology-community focus on future warfighting capability needs.

Joint Capabilities Integration and Development System informs the acquisition proces by identifying, assessing, and prior capability needs then serve as the basis for the development and production of acquisi programs. Joint Capabilities Integration and Development System is fully described in an instruction (CJCS Instruction 3170.01) signed by the Chairman of the Joint Chiefs of Staff. This instruction establishes the policies for Joint Capabilities Integration and Development System, and provides a top-level description of the process. A supplementary manual (CJCS Manual 3170.01) provides the details necessary for the day-to-day work in identifying, describing, and justifying joint warfighting capabilitie

The manual also includes the formats that describe the content required for each Joint Capabilities Integration and Development System document.

For major defense acquisition programs or major automated information systems subject Capabilities Integration and Development e Acquisition Board and Information ajor may to OSD oversight, the products of the Joint System process directly support the Defens Technology Acquisition Board in advising the Milestone Decision Authority for m milestone decisions. Figure 5 is a simplified portrayal of the nature of this support. Joint Capabilities Integration and Development System provides similar support to other acquisition programs, regardless of the milestone decision authority. Where appropriate, the Joint Capabilities Integration and Development System process and its products be tailored when applied to automated information systems

Figure 1.3.1. Joint Capabilities Integration and Development System and Defense Acquisition There are several key points portrayed in Figure 1.3.1.. First, Joint Capabilities Integration and Development System is based on a series of top-down analyses ultimately derived from formal strategic-level guidance, including the National Security Strategy, National Military Strategy, Joint Vision 2020, and the report of the Quadrennial Defense Review. Second, these analyses assess existing and proposed capabilities in terms of their contribution to emerging joint warfighting concepts. Moreover, rather than focusing on the capabilities of individual weapon systems in isolation, the analyses assess capabilities in the context of integrated architectures of multiple interoperable systems. Third, from these overarching concepts, the Joint Capabilities Integration and Development System analysis process identifies capability gaps or shortcomings, and assesses the risks associated with these gaps. These gaps may be addressed by a combination of materiel and/or non-materiel solutions (non-materiel solutions would be changes to doctrine, organization, training, leadership and education, personnel, and facilities). Fourth, recommended materiel solutions, once approved, lead to acquisition programs. For such programs, at each acquisition milestone, Joint Capabilities Integration and Development System documents are provided that will guide the subsequent development, production and testing of the program. Further information on the Joint Capabilities Integration and Development System analysis process, as well as the nature and role of each of the Joint Capabilities Integration and Development System documents, can be found in CJCS Instruction 3170.01, Enclosure A.

For Acquisition Category I and IA programs, and other programs designated as high-interest, the Joint Requirements Oversight Council (JROC) reviews and validates all Joint Capabilities Integration and Development System documents under its purview. For Acquisition Category ID and IAM programs, the JROC makes recommendations to the Defense Acquisition Board or Information Technology Acquisition Board, based on such reviews. JROC responsibilities are established by law (10 U.S.C. 181). The JROC is chaired by the Vice Chairman of the Joint Chiefs of Staff, who importantly also serves as the co-chair of the Defense Acquisition Board. The other JROC members are the Vice Chiefs of each military service.

1.4. Defense Acquisition System

The Defense Acquisition System is the management process that guides all DoD acquisition programs. DoD Directive 5000.1, The Defense Acquisition System, provides the policies and principles that govern the defense acquisition system. DoD Instruction 5000.2, Operation of the Defense Acquisition System, in turn establishes the management framework that implements these policies and principles. The Defense Acquisition Management Framework provides an event-based process where acquisition programs proceed through a series of milestones associated with significant program phases.

Details on the milestones and program phases are found in section 3 of the instruction.

The instruction also identifies the specific statutory and regulatory reports and other information requirementsfor each milestone and decision point.

One key principle of the defense acquisition system is the use of acquisition program categories, where programs of increasing dollar value and management interest are subject to more stringent oversight. Specific dollar and other thresholds for these acquisition categories are contained in DoD Instruction 5000.2, Enclosure 2. The most expensive programs are known as Major Defense Acquisition Programs (MDAPs) or as Major Automated Information Systems (MAISs). These major programs have the most extensive statutory and regulatory reporting requirements. In addition, some elements of the defense acquisition system are applicable only to weapon systems, some are applicable only to automated information systems, and some are applicable to both.

Specific details are found in DoD Instruction 5000.2, Enclosure 3.

An MDAP or a MAIS is subject to r senior officials in the Office of the Secretary of D DoD Component H e OSD ted as Acquisition Category ID and are subject to review by the fense for Acquisition, Technology, and Logistics (USD(AT&L));

as Acquisition Category IAM and are subject to review by the of Defense for Networks and Information Integration/DoD Chief oint ilitary Departments, and staff offices within OSD comprise these boards.

and n s role, the OIPT charters Working-level Integrated Product Teams for each review and manages their activities. At the Milestone Decision Point, the s the Defense Acquisition Board or Information Technology ts.

eview by specific efense, unless delegated to a lower level of review (usually the ead or Acquisition Executive). For the programs reviewed at th level, MDAPs are deno Under Secretary of De MAISs are denoted Assistant Secretary Information Officer (ASD(NII)/DoD CIO). These individuals are each the Milestone Decision Authority for their respective programs. Both individuals are supported by a senior advisory group, either the Defense Acquisition Board for MDAPs, or the Information Technology Acquisition Board for MAISs. Senior officials from the J Staff, the M

Both Boards are further supported by a subordinate group in OSD known as an Overarching Integrated Product Team (OIPT). Each OIPT facilitates communication vets issues before the Defense Acquisition Board or Information Technology Acquisitio Board meets. In this facilitator'

OIPT leader provide Acquisition Board members with an integrated assessment of program issues gathered through the Integrated Product Team process as well as various independent assessmen

CHAPTER 2

Defense Acquisition Program Goals and Strategy

2.0. Overview

2.0.1. Purpose

The purpose of this chapter is to assist Program Managers in formulating the goals and developing the strategies required to manage their programs. Program goals serve as control objectives. The Acquisition Strategy describes the program managers plan to achieve these goals and summarizes the program planning and resulting program structure.

This chapter addresses the information required to comply with DoD Instruction 5000.2 oals. An acquisition program and associated program ule, and performance parameters necessary to describe program objectives. The discussion of program goals in this int Capabilities Integration and int s every of an objective value and a threshold value for each parameter.

for schedule and cost parameters, thresholds would normally represent maximum allowable values. The failure to attain

Utilizing the capabilities of this "on-line" Guidebook, many topics are electronically linked to the related detailed discussions and explanations appearing elsewhere in this Guidebook or on the Internet.

2.0.2. Contents

Section 2.1 discusses program g goals result from the Joint Capabilities Integration and Development System determination to pursue a materiel solution to satisfy an identified capability need.

Section 2.2 discusses the Technology Development Strategy, and Section 2.3 discusses the Acquisition Strategy leading to the achievement of the program goals.

2.1. Program Goals

Program goals are the minimum number of cost, sched

Guidebook is “hot-linked” to the discussion of Jo Development System documentation in CJCS Instruction 3170.01, Joint Capabilities Integration and Development System, and CJCS Manual 3170.01, Operation of the Jo Capabilities Integration and Development System.

2.1.1. The Acquisition Program Baseline (APB)

To comply with 10 USC 2435 and 10 USC 2220, DoD Instruction 5000.2 require program manager to document program goals prior to program initiation. The Acquisition Program Baseline satisfies this requirement.

Program goals consist

Objective values represent what the user desires and expects. The program manager manages the program to the objective value of each parameter.

Thresholds represent the acceptable limits to the parameter values that, in the user's judgment, still provide the needed capability. For performance, a threshold represents either a minimum or maximum acceptable value, while program thresholds may degrade system performance, delay the program (possibly impacting related programs or systems), or make the program too costly. The failure to attain program thresholds, therefore, places the overall affordability of the progr and/or the capability provided by the system into question.

The program manager derives the Acquisition Program Baseline from the users' performance requirements, schedule requirements, and best estimates of total pr cost consiste am ogram nt with projected funding. The sponsor of a capability needs document (i.e., or tion e nt ts the Under Secretary of Defense

, the Assistant Secretary of Defense for Networks and

The Joint Staff (J-8) will review the cost, schedule, and key performance parameter objec eline for Joint Requirements Oversight Council (JROC) Interest programs, and any other programs of signi ined by the J-8). The J-8 review will ensure that the objective and threshold values are consistent with the JROC-approved Capability Developme Production Document, and prior JROC decision(s). The review will also ensure that the baseline provides the necessary warfi S Instruction

Performance.

numb Performanc d include the key performance parameters identified in the capability n Prod n be consiste

Capability Development Document or Capability Production Document) provides a threshold and an objective value for each attribute that describes an aspect of a system capability to be developed or acquired. The program manager will use this informa to develop an optimal product within the available trade space. If the objective and th threshold values are the same, the sponsor indicates this in the capability needs docume by including the statement, "Threshold = Objective"

Acquisition Program Baseline parameter values should represent the program as it is expected to be developed, produced and/or deployed, and funded. The baseline should only contain those parameters that, if thresholds are not met, will require the Milestone Decision Authority to re-evaluate the program and consider alternative program concep or design approaches. The number of performance parameters should be limited to provide maximum trade space.

Per 10 USC 2435, the Department of Defense may not obligate funds for major defense acquisition programs after entry into System Development and Demonstration without a Milestone Decision Authority-approved baseline unless for Acquisition, Technology, and Logistics specifically approves the obligation. DoD Instruction 5000.2 extends this policy to Acquisition Category IA programs. For an Acquisition Category IA program Information Integration must approve the obligation.

2.1.1.1. APB Management and Content

tive and threshold values in the Acquisition Program Bas ficant joint interest (as determ nt Document, the Capability ghting capabilities affordably and within required time frames. (See also CJC 3170.01.)

The total number of performance parameters should be the minimum er needed to characterize the major drivers of operational performance.

e parameters shoul eeds document(s) (i.e., Capability Development Document and Capability uctio Document), and the values and meanings of thresholds and objectives should

nt. (See also CJCS Instruction 3170.01D.)

The n e a program, th level measures of effectiveness or measures of performance to describe needed capabilities. As a program matures, system-level requirements become better defined.

The M st Acquisitio parameters

Schedule. jected dates for al operating capability. The uction Document program e the ent Document and Capability Production Document clude a program affordability determination identified as life-cycle cost or, if available, u lds gram Baseline. As the program progresses, ent costs based on contract t, System ates B s, Acqui dition of military pay and the cost

Working Capital Funds.

(2) Procurement costs;

umb r and specificity of performance parameters may change over time. Early in e Acquisition Program Baseline should reflect broadly defined, operational-ile one Decision Authority may also add performance parameters to the n Program Baseline other than the JROC-validated key performance

Schedule parameters should include, as a minimum, the pro program initiation, other major decision points, and initi Capability Development Document and Capability Prod summaries describe the overall program strategy for reaching full capability, and th timing of the delivery of each increment. The program manager may propose, and Milestone Decision Authority may approve, other, specific, critical, system events.

Cost. Cost figures should reflect realistic cost estimates of the total program and/or increment. The Capability Developm in total ownership cost. Budgeted amounts sho (i.e., maximum costs) in the Acquisition Pro ld never exceed the total cost thresho the program manager can refine procurem costs from Technology Developmen or actual (return) Integration, System Demonstration, and stimLow-Rate Initial Production. The program m Program anager should provide the refined e whenever updating the Acquisition aseline.

For Acquisition Category IA program with the ad sition Category I cost parameters apply of acquisition items procured with Defense

The Acquisition Program Baseline should contain cost parameters (objectives and thresholds) for major elements of program life-cycle costs (or total ownership costs, if available), as defined in section 3.1. These elements include:

(1) Research, development, test, and evaluation costs;

(3) Military construction costs;

(4) Acquisition-related operations and maintenance costs (that support the production and deployment phase), if any;

(5) Total system quantity (to include both fully configured development and production units);

(6) Average unit procurement cost (defined as total procurement cost divided by total procurement quantity); (Note: This item and number 7 below do not usually apply to business IT systems.)

(7) Program acquisition unit cost (defined as the total of all acquisition-related appropriations divided by the total quantity of fully configured end item and s);

ost objectives established by the milestone decision authority. If ented in base year dollars.

on strategy should design the Acquisition ble

(8) Any other c system operating and support costs are included, they are normally expressed as annual operating and support costs per deployable unit (e.g., squadron or battalion) or individual system (e.g., ship), as appropriate.

The cost parameters are pres

2.1.1.2. Acquisition Program Baseline in an Evolutionary Acquisition Programs using an evolutionary acquisiti Program Baseline consistent with the sponsor's capability document(s) and the applica approach outlined in Table 2.1.1.2.1.

Capability Development Document (CDD) or Capability Production Document (CPD)

Acquisition Program Baseline (APB)

CDD defines multiple increments of APB co capability ntains multiple sets of parameter values, each set defining an increment

CDD incrementally updated and revalidated APB values incrementally updated Separate CDDs for each increment Separate APBs for each increment There is one CPD for each production increment to reflect the parameters in the CPD for tha production increment

The corresponding APB should be updated t

Table 2.1.1.2.1. APB Parameters under an Evolutionary Acquisition Strategy DoD Instruction 5000.2 requires the Milestone Decision Authority to formally ini each increment of an evolutionary acquisition program. Program initiation may occur at Milestone B or C. Therefore, the program manager should develop goals for each program increment. Planned program goals (parameters and their values) for any program may be refined, according to the a tiate ctual results demonstrated by the program.

on ram deviations.

nent be oD

2.1.1.3. APB Approval

The program manager, in coordination with the user/sponsor, prepares the Acquisiti Program Baseline for program initiation. The program manager revises the Acquisition Program Baseline for each milestone review, and in the event of program restructurings or unrecoverable prog

The Acquisition Program Baseline requires the concurrence of the Program Executive Officer for all acquisition category programs, and the concurrence of the Compo Acquisition Executive for Acquisition Category ID and IAM programs.

For Acquisition Category I and IA programs, the Acquisition Program Baseline will coordinated with the Under Secretary of Defense (Comptroller) (10 USC 2220 and D Instruction 5000.2) prior to Milestone Decision Authority approval. For Joint

Req re ine must al Decisio

2.1.2. Tra e

Maximizing pr cost/performance trade-offs is esse a difference tw agreement by the user.

The best time to reduce total ownership co acquisition o elp attain cost and

Cost, schedu obj iv Trade-o parame capabil t be traded- rity. The program manager and the use h

2.2. ent Strategy

2.2.

The acq n the dev capability under c (consis readine when th tly mature latory require gy he is gy Development Strategy is updated at

gy. If the Acquisition elopment Strategy may be he ui ments Oversight Council Interest Programs, the Acquisition Program Basel so be coordinated with the Joint Staff (J-8 or designee) prior to Milestone n Authority approval (CJCSI 3170.01).

d -Offs ogram manager and contractor flexibility to make nti l to achieving cost objectives. The program manager may treat the be een an objective and its associated threshold as a "trade space," subject to st and program schedule is early in the pr cess. Continuous cost/schedule/performance trade-off analyses can h schedule reductions.

le, and performance may be traded within the "trade space" between the ect e and the threshold without obtaining Milestone Decision Authority approval.

ffs outside the trade space (i.e., decisions that result in acquisition program ter changes) require approval of both the Milestone Decision Authority and the ity needs approval authority. Validated key performance parameters may no off without approval by the validation autho r s ould work together on all trade-off decisions.

Pre-Systems Acquisition: Technology Developm

1. Technology Development uisition framework incorporates a Technology Development Phase focused o elopment, maturation, and evaluation of the technologies needed for the onsideration. Phase activities concentrate on maturing those technologies tent with recommended Technology Readiness Levels) and demonstrating ss to proceed with program initiation. The Technology Development Phase ends e Milestone Decision Authority determines that technologies are sufficien

. This determination, along with the satisfaction of other statutory and regu ments, supports program initiation.

2.2.2. Required Information

The Technology Development Strategy focuses specifically on the activities of the Technology Development Phase. Where feasible, the Technology Development Strate should also discuss activities associated with the post-program-initiation phases of t planned acquisition.

The Technology Development Strategy precedes the formal Acquisition Strategy and required for Milestone A. The Technolo subsequent milestones and subsumed into the Acquisition Strate Strategy is approved at Milestone A, the Technology Dev included in the Acquisition Strategy. While there is no mandatory format for the Technology Development Strategy, Public Law 107-314, Section 803, requires t following minimum content:

• A discussion of the planned acquisition approach, including a summary of the considerations and rationale supporting the chosen approach. For the preferred, evolutionary acquisition approach, whether spiral or incremental, DoD Instruction

5000.2 requires the following details:

o A preliminary description of how the program will be divided into technology spirals and development increments;

o The limitation on the number of prototype units that may be produced and deployed during technology development;

o How protot ype units will be supported; and age research and development. This technology demonstration. The description must contain specific cost, schedule, and performance goals, including exit criteria, for the first techn ion.

• A test plan. The program escribe how the first technology spiral demonstration will be eva er t riteria for the Technology Devel chie is focused on the evaluation s being mat ment phase. This plan is distinct from ved T ategy d section 9.6.1 of this Guid valuatio y takes a broader ol used g the entire program test and y, includ t and evalua n nd D n, and beyond.

s evol program have a Milestone Decisi chn Strategy. It suggests that multiple ment dem necessary before the user and dev that a proposed t affordable, militarily useful, and technology. T requires that the Technology Dev y be reviewed and updated upon completion of each technology spiral and development increment, and that approved rough acquisition environment. Development of the acquisition strategy requires collaboration o Specific performance goals and exit criteria that must be met before exceeding the number of prototypes that may be produced under the research and development program.

• A discussion of the planned strategy to man discussion must include and briefly describe the overall cost, schedule, and performance goals for the total research and development program. To the extent practicable, the total research and development program should include all planned technology spirals or increments.

• A complete description of the first ology spiral demonstrat manager must d luated to determine wheth opment phase have been a he goals and exit c ved. The test plan of the technologie ured during the the separately Technology Develop developed and appro est and Evaluation Str ebook. The Test and E iscussed in detail in n Strateg view and is the to evaluation strateg to begin developin ing the initial tes t, System De tion concepts for emonstratioTechnology Developme

DoD Instruction 5000.2 require velopment a that each increment of an on Authority-approved Te utionary acquisition ology Development technology develop eloper agree onstrations may be echnology solution is he Instruction also based on mature elopment Strateg updates support follow-on increments.

2.3. Systems Acquisition: Acquisition Strategy

The Acquisition Strategy results from extensive planning and preparation and a tho understanding of both the specific acquisition program and the general defense between the Milestone Decision Authority, program manager, and the functional communities engaged in and supporting DoD acquisition. A well-developed strategy minimizes the time and cost required to satisfy approved capability needs, and maxim affordability throughout the program life-cycle. Consistent with DoD Directive 5000.1, the program manager shall be the single point of accountability for accomplishing program objectives for total life-cycle systems management, inclu izes ding sustainment. The onsibility. A complete discussion of Total Life Cycle Systems Management, consistent with the policy direction of DoD n this Guidebook.

eds ted charge of DoD executive leadership is to use common sense and sound business practice in developing the acquisition strategy and executing the program. The program manager should organize an Integrated Product Team to assist in development and coordination of the Acquisition Strategy.

When developing the acquisition strategy, the program manager and supporting team members should keep in mind their total systems resp

Directive 5000.1, appears later i

Consistent with statute and regulation, the program manager should tailor the program planning and required information to the specific program needs. Additionally, the ne of the decision makers who will coordinate or approve the strategy should guide the preparation of the acquisition strategy. 2.3.1. lists the principal considerations associa with developing the acquisition strategy.

Acquisition Approach Best Practices

Modular Open Systems Approach

Business Considerations Product Support Capability Needs Summary Program Structure

Environment, Safety, Occupational Health

Relief, Exemption, and Waiver

Human Systems Integration Information Assurance

Research and Technology Protection

Information Technology Resource Management Risk Management Integrated Test and

Evaluation

Interoperability Systems Engineering

Acquisition

Strategy

Considerations

Table 2.3.1. Acquisition Strategy Considerations

DoD Instruction 5000.2, requires an approved Acquisition Strategy at program initiation.

The acquisition strategy should be updated for all subsequent major decisions and program reviews, and whenever the approved strategy changes.

An acquisition strategy requires the concurrence of the Program Executive Officer (for programs in all acquisition categories) and the D oD Component Acquisition Executive ne gy er tory topics regulation, with which the program manager must comply when planning the program, and indicate the information the program manager uisition strategy.

le enough to accommodate ver development, testing, production, risk mitigation and testing impacts.

ince this oD Components and

(for Acquisition Category ID and IAM programs) prior to approval by the Milesto Decision Authority. Milestone Decision Authority approval of the Acquisition Strate may precede a decision point; however, programs may not proceed beyond a decision point without a Milestone Decision Authority-approved strategy.

This section of the Guidebook covers all of the topics or activities the program manag should consider when developing a strategy. However, when tailored for a specific program, some topics may not apply. This Guidebook will identify the manda or practices, consistent with statute and must include in the documented acq

2.3.1. Program Structure

The Acquisition Strategy guides program execution across the entire program life-cycle The strategy evolves over time and should continuously reflect the current status and desired end point of the program. The strategy must be flexib acquisition oversight decisions both on this program and on other programs that may affect this program. It should address the availability of required capabilities to be provided by other programs.

The Acquisition Strategy establishes the milestone decision points and acquisition…