Proposed Acquisition Teamwork and Cycle Time Improvements

National Center for Advanced Technologies
1250 Eye Street, N.W., Suite 1100, Washington, D.C. 20005


April 19, 1996

The recent Cost as An Independent Variable (CAIV) and Overarching Integrated Product/Process Teams (OIPT) policies emphasizing cost and performance balance, on-going tradeoffs and timely elevation of major tradeoff decisions to executive attention are excellent new programmatic themes in the Department of Defense. Current revisions to the DoD Directive 5000.1 and DoD Instruction 5000.2 reflect many improved acquisition concepts that the department has put forth as individual policy initiatives over the past several years, and which represent constructive improvements over the current series. Industry supports the inclusion of concepts such as the use of Integrated Product Process Development (IPPD), employment of commercial products, specifications, standards and practices, and acquisition management incorporating Cost as An Independent Variable (CAIV.) Considering that the DoD-5000 documents are updated only about each half-decade, it may, however, be an opportune time to pause and ask why other such good ideas like Design-to-Cost, P3I, Acquisition Streamlining, Award-Fee, Value Engineering and Performance Specs were all started with high expectations, but somehow did not improve defense system affordability in a major way.

We believe that such policies have always been dependent upon solid government/industry teamwork and shorter overall acquisition cycle time. Various underlying impediments in the defense acquisition process have worked at cross-purposes to these needs over the years and can again impede the new DoD-5000 initiatives.

We have identified some of the main obstacles to effective government/ industry teamwork, as well as reasons for today's long acquisition cycle time. The teamwork impediments include a group of solicitation and contracting practices which have caused characteristics from the fixed-price-development era to linger during the award and management of new programs. These have also combined with recent legislation to chill worthwhile cooperation during the pre-award period. Even the new DoD-5000 drafts convey a guarded approach to teamwork with industry; including guarded cooperation on the IPD/CAIV initiatives where solid teamwork is essential.

As to the long overall cycle time today's acquisitions are driven principally by the pipeline nature of the many phases, anchored around drawn-out EMD phases

The impediments to government/industry teamwork can be overcome by adoption of a pro-active roadmap, or trust-model, for government and industry to cooperate on the implementation of the new DoD-5000 policies. Although this can also help shorten today's long acquisition process, thoughtful consideration is also needed to making a major improvement in cycle time.

We propose the following strawman approach which can both represent a roadmap for teamwork and permit a system development process on the order of 3-5 years. By combining proven practices from successful military and commercial programs with team-based execution of the CAIV/OIPT principles, this approach replaces today's long, multi-phase process with a much shorter cycle. Industry and the OSD should work together to implement the details of this approach in implementation of the new acquisition policy documents.

DoD and Industry jointly should give thoughtful consideration to making watershed changes to shorten the process. Such changes need not be risky or unproven. A body of "lessons-learned" is available from successful military and commercial programs upon which to confidently structure a new process. Indeed, the use of integrated product development, combined with modern concurrent engineering and precision manufacturing tools, could permit a version of the recent ACTD concept to be the new acquisition norm, with a 3-5 year development cycle including initial fielding for user tactics and doctrine.

Such a new process, entitled "Evolutionary Defense Acquisition" (EDA), is summarized in the following section. It preserves and enhances the CAIV principles and the necessary teamwork outlined in earlier remarks, but replaces today's multi-phase cycle with a much shorter process. To provide a basis for full examination of EDA, implementation specifics are also set forth along with some of the key lessons-learned programs from which information was taken to formulate the process. Although there are actual recent programs used as models to form the EDA concept, the approach should also be "piloted" on a few programs for validation.

Evolutionary Defense Acquisition

Existing DoD-5000 phases could be replaced with a process using 3 to 5 years to develop and field systems in step with modern technology cycles. It would focus on mainstream US defense needs into the next century, including precision weapons, C3I, information warfare and technology upgrade to existing aircraft, ship, battlefield and space systems.

The new process could be called "Evolutionary Defense Acquisition" (EDA), stressing an intent to replace today's culture with an affordable, incremental approach. The baseline for Major System development would be 5 years, including fielding and user Opeval of a battle group size production prototype lot. The Opeval would establish concepts of operation, tactics and doctrine for single and joint service use, determine readiness for full production and affirm the next level of required system growth. Equally important, the battle group prototypes would serve as a quick reaction warfighting resource, sustaining a modern, economic American defense structure and guarding against defacto disarmament under budget downsizing. The baseline for development of Non-Major Items would be 3 years or less, including fielding of a low-rate production lot for similar Opeval and contingency warfighting uses.

EDA would be built around an incremental approach to operational performance. "Threshold" requirements would apply to the initial battle group prototype or low-rate production fielding lots, with incremental "objectives" introduced later as system upgrades. The threshold would represent the minimum operational performance with current technology to make an initial system fielding, while the objective level would represent longer term goals which may be upgraded into the system in pace with evolving technology. These requirements would be managed using CAIV tradeoffs at milestones throughout development and Opeval to keep performance and cost in balance, avoid grand design systems and mitigate program risk.

EDA Implementation Details

Technology and Requirements Validation Before System Development
Rapidly paced commercial subsystems can provide varied, economic technologies for many Non-major Items and some Major Systems; while independent contractor R&D and Advanced Concept Technology Demonstrators (ACTDs) can rapidly prototype defense-unique technologies or integrate commercial subsystems for complex defense uses. The cycle time and better understood performance/cost characteristics of these technologies will also permit firmly planned thresholds and incremental performance objectives.

Acquisition Milestones and Approvals
EDA would use three decision milestones. Milestone A, Requirements Generation, represents provisional approval to begin a new program. Milestone B, Development and Opeval, commits to a new development inclusive of a battle group production prototype lot for Major Systems or a low-rate production lot for Non-Major Items, including Opeval testing of these. Milestone C, Production, commits to the approved production rate together with a plan for incorporation of the incremental grow-to upgrades at block change points.

Competitive Source Selections
Under EDA, there would be one major competition for the "Development and Opeval Phase". BAFOs and risk-averse awards would be replaced with selections based on the first principle of EDA - best balance between performance, cost and schedule.

Concurrent Engineering and Precision Manufacturing Technologies
Concurrent engineering and precision manufacturing technologies will be used to ensure that both the production prototype and low rate production lots under EDA are manufactured with virtual-production cost effectiveness, quality and operational fidelity.

Contracting Structure
The contracting structure for EDA would be patterned after the black, X-model and commercial programs described below. Cost Plus Incentive Fee/Award Fee contracts should be designed to incentivize balance between performance, cost and schedule.

Acquisition Teamwork
EDA would use lean Integrated Product Teams, made up of acquisition and user experts joined by industry development experts; all focusing on continuous cost benefit tradeoffs to balance performance, cost and schedule. Empowerment would be within the IPT, subject to corporate-type Delegations of Authority. IPTs would also manage Opeval testing, using non-organic contractor logistic support until full production. IPTs would avoid costly subteam structures or management tools contrary to the streamlined EDA contracting approach above.

Past Successful Practices

Successful management practices from recent military and commercial developments have been drawn upon to help define EDA. A highly successful black system, a missile defense system, an X-Model airplane, a new commercial air transport and an advanced technology electronics item have been selected because their successes are most relevant to EDA:

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