DoDI ,Operation of the Defense Acquisition System Change 1 & 2

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1 DoDI ,Operation of the Defense Acquisition System Change 1 & 2 26 January & 2 February 2017 (Key Changes from DoDI , 7 Jan 2015) Presented By: T.R. Randy Pilling Center Director Acquisition & Program Management Foundational Learning Directorate Randy.Pilling@dau.mil

2 2 0 2 (Change 2) 3 4 Change 1 & 2, DoDI Issued on January 26 & February 2, 2017 Modifies and clarifies roles & responsibilities for MDA approval Multiple changes to Milestone & Phase Information Requirements (Table 2) DAB Planning Meetings SECDEF authority to waive acquisition law/regulation 2 modified, removed from , and incorporated into DoDI , Business Systems Requirements And Acquisitions (Change 2) Urgent Capability vs. Rapid 4 incorporates and cancels Directive Type Memo related to Cybersecurity in the Defense Acquisition System Note: All changes are indicated in red italics text

3 3 0 2 (Change 2) 3 4 Change 1 Comparison to 7 Jan 2015 Version (How much has changed?) Instruction (Basic Process Description) Enclosures 1. Acquisition Program Categories and Compliance Requirements 2. Program Management 3. Systems Engineering 4. Developmental Test and Evaluation (DT&E) 5. Operational and Live Fire Test and Evaluation (OT&E and LFT&E) 6. Life-Cycle Sustainment 7. Human Systems Integration (HSI) 8. Affordability Analysis and Investment Constraints 9. Analysis of Alternatives (AoA) 10. Cost Estimating and Reporting 11. Requirements Applicable to All Programs Containing Information Technology (IT) 12. Acquisition of Defense Business Systems (DBS) (change 2) 13. Urgent Capability Acquisition (title change) 14. Cybersecurity in the Defense Acquisition System (added) LEGEND Extensive Changes Moderate Changes Little Changes

4 4 Change 1, DoD Instruction Para 1.c. (Added): acquisition responsibilities related to cybersecurity in the Defense Acquisition System Para 4.d. (Added): Secretaries of the Military Departments. In addition to the responsibilities described in paragraph 4.c., the Secretary of the Military Department acquiring an MDAP will represent the customer (i.e., the DoD Component(s) fielding the system) Para 4.e. (Added): The Chiefs of the Military Services fielding MDAPs will represent the customer 0 2 (Change 2) 3 4 Adds responsibility, accountability & authority for MILDEP Secretary and Chief

5 5 Change 1, DoD Instruction Para 5.a.(2)(c) (Added): Secretary of Defense may waive acquisition law or regulation to acquire a capability that would not otherwise be available to the DoD Components. Program Decision Reviews and Milestones: Para 5.a.(4)(g) The MDA will prioritize key cost, schedule and performance issues to be addressed at the DAB. The Military Service concerned will address administrative or advisory comments. Similar procedures will be used for DoD Component-level reviews. 0 2 (Change 2) 3 4 Adds SECDEF waiver authority Defines MDA & MILDEP responsibilities at reviews & milestones

6 6 Change 1, DoD Instruction 0 2 (Change 2) Para 5.d.(2)(c): Program Office Establishment and Next Phase Preparation. Program Manager will review the information requirements for the upcoming decision event and may submit a request for waiver to statutory (when authorized by statute) and regulatory requirements to the cognizant approval authority (e.g., MDA, DoD CIO, DOT&E, DCAPE, JROC). The MDA will conduct a DAB planning meeting approximately 6 months before a DAB that includes RFP release decisions. meeting will be to ensure timely review of the business approach before completion of the RFPs. Para 5.d.(3)(b) At the Milestone A Review: 1. Program Manager requests to tailor or waive information requirements associated with the next decision event may be submitted to the MDA at this milestone and at each subsequent program milestone Addresses PM waiver requests to statutory/regulatory requirements Mandates DAB Planning Mtg 6 months prior to DAB

7 7 Change 1, DoD Instruction 0 2 (Change 2) 3 4 Para 5.d.(4)(b) 2.: TMRR Phase Description. Competitive risk reduction prototypes will be included if they will materially reduce engineering and manufacturing development risk at an acceptable cost. If competitive prototyping is not considered feasible, single prototypes at the system or subsystem level will be considered. (Note: this replaces 4 sub-paragraphs) Para 5.d.(5)(b) CSBs. membership including senior representatives from the Office of the USD(AT&L),, DOT&E (or designated representative), and the DoD CIO Para 5.d.(8)(c) Milestone B. At the milestone, the MDA will 1. Approve the LRIP quantity or the scope of limited deployment, as applicable. 2. Specify the technical event-based criteria for initiating production or making deployment decisions. 3. (Added) Decide whether to accept any Program Manager information waiver requests for the next decision event. Simplifies use of TMRR risk reduction prototypes Mandates DOT&E & CIO at CSBs Further defines & expands on MDA MSB responsibilities

8 8 ACQUISITION PROGRAM CATEGORIES AND COMPLIANCE REQUIREMENTS 0 2 (Change 2) 3 4

9 9 Milestone and Phase Information Requirements (Table 2) 0 2 (Change 2) 3 4 Added: 2366a Written Determination 2366b Certification and Determination Added to Acquisition Strategy Content: - Acquisition Approach - Business Strategy - Contracting Strategy (the contract type determination and termination liability estimate requirements were folded under this section) - Modular Open Systems Approach (MOSA) - Multi-year Procurement - Risk Management Defense Intelligence Threat Library Assessment (Threat Modules) Validated On-line Life-cycle Threat Report (VOLT) Deleted: 2366a/b Certification Memorandum Capstone Threat Assessment System Threat Assessment Report (STAR) Initial Threat Environment Assessment Manpower Estimate Deleted from content of acquisition strategy: Consideration of Technology Issues.

10 10 Milestone and Phase Information Requirements (Table 2) 0 2 (Change 2) 3 4 Separates requirements for 2366a & 2366b CAE approval not required for Draft APB at RFP Release

11 11 Milestone and Phase Information Requirements (Table 2-cont.) 0 2 (Change 2) 3 4 Adds mandatory Acquisition Strategy requirements for: Acquisition Approach, Business Strategy and Contracting Strategy

12 12 Milestone and Phase Information Requirements (Table 2-cont.) 0 2 (Change 2) 3 4 Adds mandatory Acquisition Strategy requirements for MOSA, Multi-Year Procurement & Risk Management

13 13 Milestone and Phase Information Requirements (Table 2-cont.) 0 2 (Change 2) 3 4 Component must have CAPE concurrence for CARD on ACAT II Adds requirement for Defense Intelligence Threat Modules

14 14 Milestone and Phase Information Requirements (Table 2-cont.) 0 2 (Change 2) 3 4 DBS references related to 2 deleted

15 15 Milestone and Phase Information Requirements (Table 2-cont.) 0 2 (Change 2) 3 4 MDA approves SEP Further defines DOT&E & Component OT approvals for TEMP

16 16 Milestone and Phase Information Requirements (Table 2-cont.) 0 2 (Change 2) 3 4 VOLT replaces STAR. DoD Components produce & DIA validates for ACAT 1D/IAM programs; otherwise Component validates

17 17 Statutory Program Breach and Change Definitions (Table 4) Streamlined definitions for: Critical Change Cost or Schedule Growth Notification 0 2 (Change 2) 3 4

18 18 Recurring Program Reports (Table 5) 0 2 (Change 2) 3 4 Added requirement for MAR when MAIS is a DBS and FD extends beyond 5 years after initiation; must include justification for longer period SAR must include certification by MILDEP Secretary & Chief that program requirements are stable and funding is adequate; must ID any risk increase

19 19 Exceptions, Waivers, and Alternative Management & Reporting Req. (Table 6) 0 2 (Change 2) 3 4 Added notification routing MDA-DAE-Congress for changes to Acquisition Strategy

20 20 Exceptions, Waivers, and Alternative Management & Reporting Req. (Table 6) 0 2 (Change 2) 3 4 Added notification requirement for SECDEF waiver of Acquisition laws

21 21 CSDR (Table 7) No Changes 0 2 (Change 2) 3 4

22 22 EVM Application Requirements (Table 8) Incorporates Sept 2015 Class Deviation to EVM thresholds in DFARS PARCA, in coordination with CAE, will review ACAT 1D/IAM programs for EVM applicability 0 2 (Change 2) 3 4

23 23 EVM Reporting Requirements (Table 9) (Added) 0 2 (Change 2) 3 4 Streamlines reporting requirements, allows more flexibility for PM, especially for $20M & < $50M contracts

24 24 CCA Compliance (Table 10) No significant changes 0 2 (Change 2) 3 4

25 25 Program Management 0 2 (Change 2) 3 4. ASSIGNMENT OF PROGRAM MANAGERS c. By law, any Program Manager for an ACAT I or IA program assigned before Milestone B will be assigned at least through Milestone B approval Waivers for these tenure requirements can be granted by the respective CAE if it is determined that either of the above described periods is so long that it would not be appropriate for a single individual to serve as Program Manager for the entire period. CAEs will assist with the collection of data on waivers granted to assist OSD in recognizing status and trends. d. DoD Components should, whenever possible, assign incoming Program Managers to programs approximately 6 months before a major milestone so that they are responsible for approval of a plan that they will execute... 4 More prescriptive guidance for PM assignments; CAEs can waiver

26 26 Program Management 0 2 (Change 2) ASSIGNMENT OF PROGRAM MANAGERS (cont.) e. Program Managers for the period leading to Milestone B approval will have responsibilities that include: (1) Bringing technologies to maturity and identifying the manufacturing processes that will be needed to carry out the program. (2) Ensuring continuing focus during program development on meeting stated mission requirements and other requirements of the Department of Defense. (3) Recommending trade-offs between program cost, schedule, and performance for the life-cycle of the program. (4) Developing a business case for the program. (5) Ensuring that appropriate information is available to MDA to complete the Certification and Determination required by 10 U.S.C. 2366b (Reference (h)) and make the Milestone B decision. f. The Program Manager responsibilities for an MDAP immediately after Milestone B include: (1) Consultations on the addition of new program requirements that would be inconsistent with the Program Management Agreement (PMA) directed by paragraph 4g in this enclosure. (2) Recommendation of trade-offs between cost, schedule, and performance, consistent with the PMA. (3) Development of interim goals and milestones to achieve the parameters established in the PMA. Significantly more detail on Program Management Agreements

27 27 Program Management 0 2 (Change 2) ASSIGNMENT OF PROGRAM MANAGERS (cont.) (Added paragraphs) g. PMA agreements establish achievable and measurable annual plans that are fully resourced and reflect the approved program. (1) To maximize management accountability, ACAT I and IA Program Managers are required to enter into a PMA with the manager s immediate supervisor for such program within 6 months of assignment. Specifically, this agreement will: (a) Establish expected parameters for the cost, schedule, and performance of the program consistent with the business case for the program. (b) Provide the supervisor s commitment to the level of funding and resources required to meet such parameters. (c) Provide the assurance of the Program Manager that such parameters are achievable and that the Program Manager will be accountable for meeting such parameters. (2) PMAs will be updated annually or more frequently if the conditions that formed the basis of the agreement (requirements, funding, or execution plans) have changed. (3) The PMA format is at the discretion of the Component and may be as simple as a cover memo for all signatories with the Acquisition Program Baseline, budget exhibits, and capabilities documents attached. Significantly more detail on Program Management Agreements

28 28 Program Management 0 2 (Change 2) 3 6. PROGRAM MANAGEMENT RESPONSIBILITIES (cont.) a. Acquisition Strategies (2) Business Approach and Risk Management. When risk is sufficiently reduced, Program Managers will consider the use of fixed-price contracts when the use of such contracts is cost-effective. (5) (Added) MOSA. Program management is responsible for evaluating and implementing a MOSA to the maximum extent feasible and cost effective. This approach integrates technical requirements with contracting mechanisms and legal considerations to support a more rapid evolution of capabilities and technologies throughout the product life cycle through the use of architecture modularity, open systems standards, and appropriate business practices. The Acquisition Strategy for the system should identify where, why, and how a MOSA will or will not be used in the program. 4 PM tasked with responsibility for evaluating & implementing MOSA

29 29 Program Management 0 2 (Change 2) PROGRAM MANAGEMENT RESPONSIBILITIES (cont.) d. Risk Management (2) (Added) At a minimum, the Program Manager will consider the following risk management techniques: (a) Prototyping at the system, subsystem, or component level; and competitive prototyping, where appropriate. (b) Modeling and simulation (detailed in section 9 in Enclosure 3), to include the need for development of any new modeling and simulation tools to support a comprehensive risk management and mitigation approach. (c) Technology demonstrations and decision points to discipline the insertion of planned technologies into programs or the selection of alternative technologies (sections 3 through 8 in Enclosure 3 provide additional discussions of technical management activities). (d) Multiple design approaches. (e) Alternative designs, including designs that meet requirements but with reduced performance. (f) Phasing program activities or related technology development efforts to address high-risk areas early. (g) Manufacturability (section 10 in Enclosure 3 addresses manufacturing and producibility in more detail). (h) Industrial base availability and capabilities (further discussed in section 8 of this enclosure) (i) Independent risk assessments by outside subject matter experts. (j) Providing schedule and funding margins for identified risks. PM responsibility for Risk Management more defined

30 30 Life-Cycle Sustainment 0 2 (Change 2) 3 2. SUSTAINMENT ACROSS THE LIFE CYCLE b. DoD Components will: (4) (Added) Ensure Program Managers responsible for renewal of sustainment contracts that include public-private partnerships with DoD maintenance depots will include the use of Defense Logistics Agency (DLA) storage and distribution capacity in the terms of renewal public-private partnership arrangements and negotiate the transfer of government-owned inventory from commercial to DLA facilities, as specified in the arrangement. 3. LIFE-CYCLE SUSTAINMENT PLAN (LCSP) d.(2) Core Logistics Analysis. (Added) Program plans will include the use of DLA-operated storage and distribution facilities where collocated with the DoD Component s selection of organic depot maintenance. 4 Emphasis on use of DLA storage & distribution capacity/facilities

31 31 Human Systems Integration 3. HSI PLANNING d. Manpower: (Deletes all references to Manpower Estimate) Adds: Manpower mix data will be reported to cost analysts and factored into the preparation of independent cost estimates and DoD Component cost estimates. 0 2 (Change 2) 3 4 MER deleted; manpower data will be factored into ICE

32 32 0 Cost Estimating and Reporting 6. MULTI-YEAR PROCUREMENT COST ANALYSIS REQUIREMENTS a. General: Multi-year contracts in an amount equal to or greater than $500 million may not be entered into unless the contract is specifically authorized by law in an Act other than an appropriations Act. In accordance with 10 U.S.C. 2306b, when submitting a request for authorization for a multi-year contract, the Secretary of Defense must include in the request a report containing the preliminary findings of the DoD Component head regarding the following: 0 2 (Change 2) 3 4 Adds $500M threshold no significant changes otherwise

33 33 2 Acquisition of Defense Business Systems (DBS) 0 2, Defense Business Systems, is deleted and incorporated in DoDI , Business Systems Requirements And Acquisition. Change 2 deleted 2 from DoDI This information is now incorporated in DoDI , Business Systems Requirements and Acquisition 2 (Change 2) 3 4

34 34 3 Urgent Capability Acquisition 2. URGENT OPERATIONAL NEEDS AND OTHER QUICK REACTION CAPABILITIES b.(3) A Secretary of Defense or Deputy Secretary of Defense Rapid Acquisition Authority (RAA) Determination. 0 2 (Change 2) 3 4 Adds Dep SECDEF authority

35 35 4 Cybersecurity in the Defense Acquisition System (added in entirety) Cybersecurity Risks 3. Activities to Mitigate Cybersecurity Risks 4. Protection Planning 5. Program Management And Component Actions To Implement Cybersecurity And Related Program Security Across The Materiel Life Cycle 6. Resources For Executing Cybersecurity And Related Program Security Activities. 0 2 (Change 2) 3 4 Incorporates and cancels Directive Type Memo , Cybersecurity in the Defense Acquisition System, January 11, 2017

36 36 for DAU 0 T. R. Randy Pilling DAU Center Director Acquisition & Program Management (703) Randy.Pilling@dau.mil 2 (Change 2) 3 4

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