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7 Report to Congress on Recommendations and Actions Taken to Advance the Role of the Chief of Naval Operations in the Development of Requirements, Acquisition Processes and Associated Budget Practices. The estimated cost of this report or study for the Department of Defense is approximately $13,000 in Fiscal Years This includes $13,000 in DoD labor. Generated on 2016MAR01
8 Table of Contents I. Reporting Requirement 3 II. Introduction 3 III. Review of Current Authorities & Process 4 IV. Recommendations 5 V. Actions Taken 6 VI. Conclusion 7 Recommendations and Actions Taken to Advance the Role of the Chief of Naval Operations in the Development of Requirements, Acquisition Processes and Associated Budget Practices. Final Page 2 of 7
9 I. Reporting Requirement Section 801 of the Fiscal Year (FY) 2016 National Defense Authorization Act (NDAA) directed the Chief of Naval Operations (CNO) to review the current authorities given to him by relevant statutes and regulations related to defense acquisitions; develop recommendations to further or advance his role in development of requirements, acquisitions processes, and associated budget practices; and submit those recommendations and actions taken, if any, in a report to Congress not later than March 1, Specific NDAA language follows: Sec Required Review Of Acquisition-Related Functions Of The Chiefs Of Staff Of The Armed Forces. (a) REVIEW REQUIRED. The Chief of Staff of the Army, the Chief of Naval Operations, the Chief of Staff of the Air Force, and the Commandant of the Marine Corps shall conduct a review of their current individual authorities provided in sections 3033, 5033, 8033, and 5043 of title 10, United States Code, and other relevant statutes and regulations related to defense acquisitions for the purpose of developing such recommendations as the Chief concerned or the Commandant considers necessary to further or advance the role of the Chief concerned or the Commandant in the development of requirements, acquisition processes, and the associated budget practices of the Department of Defense. (b) REPORTS. Not later than March 1, 2016, the Chief of Staff of the Army, the Chief of Naval Operations, the Chief of Staff of the Air Force, and the Commandant of the Marine Corps shall each submit to the congressional defense committees a report containing, at a minimum, the following: (1) The recommendations developed by the Chief concerned or the Commandant under subsection (a) and other results of the review conducted under such subsection. (2) The actions the Chief concerned or the Commandant is taking, if any, within the Chief s or Commandant s existing authority to implement such recommendations. II. Introduction The CNO conducted a review of his authorities under Title 10 United States Code, the FY 2016 NDAA, and other relevant statutes and regulations related to defense acquisition. Based on his stated Commander s Intent to date; the enhanced authorities granted in the FY 2016 NDAA; a strengthened approach to current Department of Navy (DON) policies; and his review of practices, staff structure, and training changes the CNO believes there is sufficient authority to enable him to "own" Navy acquisition, in terms of the authority, responsibility, expertise, and accountability to manage trade-offs between cost, schedule, technical feasibility and performance. Recognizing the momentum of current process and timelines associated with lasting change, the CNO recognizes this will be an ongoing change effort. This report focuses on the recommendations and actions taken to date to move to Service ownership and required improvement in the requirements, acquisition, and budgeting processes. Recommendations and Actions Taken to Advance the Role of the Chief of Naval Operations in the Development of Requirements, Acquisition Processes and Associated Budget Practices. Final Page 3 of 7
10 III. Review of Current Authorities & Process The Service Chiefs have specific acquisition-related functions as stated in 10 U.S. Code 2547 and modified by the FY 2016 NDAA: The FY 2016 NDAA enhances CNO s authority by requiring concurrence at key decision points. It emphasizes his primary role in the management and trade-offs between cost, schedule, technical feasibility and performance. It allows CNO and the Assistant Secretary of the Navy (Research Development and Acquisition) (ASN(RDA)) options for rapid acquisition and rapid delivery that align with Navy rapid prototyping and development initiatives being put in place. And it strengthens the Navy s technical expertise by increasing CNO s ability to influence acquisition career paths for military personnel, with the ultimate aim of ensuring our Navy has a more technically competent strategy and requirements workforce to better guide acquisition programs. This review indicates that with the additional authorities granted in the FY 2016 NDAA, a strengthened approach to current CNO authorities, Department of Navy (DON) policies, focused engagement with the Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD(AT&L)), and Requirements Officer workforce improvement, CNO has sufficient ability to "own" Navy acquisition. The implementation of these authorities is defined in the Secretary of the Navy s Department of Navy Implementation and Operation of the Defense Acquisition System and Joint Capabilities Integration and Development System SECNAVINST The foundation of this instruction, and therefore the Navy s implementation of requirements and acquisition authorities, is the Two-Pass and Six-Gate DON Requirements and Acquisition Governance Process, here forward written as the Gate Review Process. Created in 2007, the Gate Review Process is in place to ensure awareness and alignment between the CNO and ASN(RDA), so Navy executive leadership understands the relationship between requirements, technical feasibility, and total ownership cost. The Gate Review Process is the means by which CNO exercises his authority in the fulfillment of his responsibility to equip the Navy s forces. Figure 1, below, illustrates relative authorities and timeline of the Gate Review Process. The six Gates are chaired by either the CNO or ASN(RDA), with the other as a principal member. Gates 1, 2, and 3 are chaired by the CNO and ensure that warfighter requirements are well understood and can be translated into technical requirements that acquisition can affordably achieve. Gates 4, 5, and 6 are chaired by the ASN(RDA) and ensure the technical specification(s), statement of work, and Request for Proposal have accurately translated the warfighting requirements into technical requirements that are effective, executable, and affordable for testing, production, and fielding. Recommendations and Actions Taken to Advance the Role of the Chief of Naval Operations in the Development of Requirements, Acquisition Processes and Associated Budget Practices. Final Page 4 of 7
11 Figure 1 Two-Pass and Six-Gate DON Requirements and Acquisition Governance Process IV. Recommendations Improved Execution CNO is fully committed to exercising his authorities through regular, deliberate, and purposeful program reviews, personal approval of the capabilities and requirements of new programs, and early decisive action. CNO intent includes improving the execution of the Gate Review Process. Focused rigor by the CNO and ASN(RDA) will ensure early awareness and greater control of the tradeoffs between requirements, total ownership cost estimates, budget, technical maturity, and risk and also provide program management with unambiguous CNO guidance. Authority granted by the FY 2016 NDAA will facilitate engagement with the Office of the Secretary of Defense to include CNO involvement in the deliberations of Milestone A and B Defense Acquisition Boards (DABs). This added engagement will ensure Service Chief guidance and intent fully inform total ownership cost, schedule, technical feasibility, and performance. The Navy will work with Congress, OUSD(AT&L), and the Joint Staff towards a collective goal of realigning program ACAT levels so Milestone Decision Authority resides primarily with the Service, and for designation of Service programs as JROC Interest to be the exception rather than the rule in order to better scope the JROC s validation authority over those capabilities and requirements that are inherently Joint. Accelerate Acquisition Timelines Having demonstrated the ability to acquire systems on shortened timelines, we should expand our motivations to do so beyond risk-to-life drivers to include risk-of-threat drivers relating to service capability and capacity need dates in an effort to preclude decades long development and fielding timelines experienced in some of our major programs today. There is a critical need to more rapidly develop and deliver warfighting capabilities to the Fleet. The Navy must be a leader not only in capability innovation but also in process innovation with the goal being relative increases in the speed of Recommendations and Actions Taken to Advance the Role of the Chief of Naval Operations in the Development of Requirements, Acquisition Processes and Associated Budget Practices. Final Page 5 of 7
12 delivery of supported capability and capacity to our Sailors. Improved CNO Staff Training and Expertise CNO s authority to develop career paths in acquisition for military personnel has been expanded by the FY2016 NDAA, to also include their career management. While Navy has solid programs and assignment practices to develop budget expertise and acquisition program managers, the development path of the people who set strategy and system requirements can, and must, be better. V. Actions Taken Improved Execution a) As the Gate reviews are being conducted, ASN(RDA) and CNO are personally engaging and systemically reassessing the health of programs and the balance between technology, requirements, and budget. Recent examples of focused engagement at the Service Chief level are: the independent review of the Remote Multi-Mission Vehicle (RMMV) program, as part of the Remote Minehunting System; and the review and restructure of the Unmanned Carrier-Launched Surveillance and Strike (UCLASS) system requirements and acquisition approach. b) CNO will work with OUSD(AT&L) to ensure active participation in pertinent Defense Acquisition Boards (DAB) and 2366a and 2366b determinations and certifications consistent with new OUSD(AT&L) policy. c) Navy is currently revising the implementing instruction for the operation of the Defense Acquisition System and the Joint Capabilities Integration and Development System (JCIDS), SECNAVINST Changes include: A more concise manual that provides clear, easier to understand policy and guidance. Incorporate new public law and DoD policy including the latest DoD Instruction (Operation of the Defense Acquisition System), the Chairman of the Joint Chiefs Instruction (CJCSI) I, and the JCIDS Manual. CNO and ASN(RDA) co-signature for all Gate Review decisions, further institutionalizing the close coordination and interconnectedness of Navy requirements and acquisition. Increased engagement and rigor in the Gate Review Process to better understand a program s total ownership cost, schedule, and technical feasibility and options. Formal policy and focus on rapid acquisition and rapid prototyping, experimentation, and demonstration. Accelerate Acquisition Timelines Navy is establishing new offices and accountabilities for Rapid Prototyping, Experimentation, and Demonstration (RPED). The CNO has also established the Maritime Accelerated Capabilities Office with the additional authorities given to him by the FY 2016 NDAA to push through more established and mature programs and move them to Initial Operating Capability faster. RPED will conduct prototyping of critical sub-systems and components in the pre-milestone B phases with the goal of rapidly getting Recommendations and Actions Taken to Advance the Role of the Chief of Naval Operations in the Development of Requirements, Acquisition Processes and Associated Budget Practices. Final Page 6 of 7
13 capability to the warfighter for assessment and concept development and to reduce or retire technology risk early. The intent is to bring Fleet warfighting development centers together with technologists to provide an environment of innovation and new concept exploration to enable improved mission execution. This early learning will develop more realistic and informed requirements up front, explore and mature new warfighting concepts sooner and insert them into programs of record faster, and bring warfighting improvements to production and Fleet delivery far quicker than the current acquisition system. This early involvement will allow for early failures which will also provide for more efficient use of resources on technologies and concepts with the most promise. There must be a Department of Defense-wide recognized need for a cultural shift across all aspects of the defense acquisition system to provide the required support to this need for speed with regard to capability identification and fielding. CNO will continue the focus on Navy s commitment to innovation and accelerated timelines as we review the OPNAV headquarters staff and other major staffs for the directed 25% reduction. This CNO directed review will look for process efficiencies, and better alignment, as well as a strengthened focus on requirements management and acquisition program performance. Improved CNO Staff Training and Expertise Improving the professional development of our Requirements Officers (ROs) to define the right requirements for our Navy platforms, weapons, and systems is a priority. The CNO has engaged with the Defense Acquisition University for their recommendations on improved course material and delivery methods and for defining the proper career milestones for officers with the goal of providing requirements definition skill set progression and requirements workforce management. We will explore ways to strengthen expertise through expanded training, career path management, and assignments; and assess the staff organization, size, function, and training for improved and empowered optimization. VI. Conclusion The CNO is appreciative of Congressional support to date in strengthening the Service Chief s role and looks forward to continued engagement with Congress on this topic to ensure CNO authority over requirements, acquisition-related functions, and budget process needed to provide for the capability and capacity needs of our Sailors in the defense of this great Nation. As acquisition-related change implementation progresses, CNO will regularly assess and make adjustments where necessary to maximize our performance, and increase the speed of the acquisition system and delivery of new capabilities to the Fleet. Recommendations and Actions Taken to Advance the Role of the Chief of Naval Operations in the Development of Requirements, Acquisition Processes and Associated Budget Practices. Final Page 7 of 7
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