AT L Hot Topics in Acquisition Presentation for DAU

AT&L Hot Topics in Acquisition Presentation for DAU 9 August, 2006 1

Acquisition and Technology Providing Value-Added Oversight and Coherent Strategic Direction for Reduced Cycle Time, Increased Competition and Predictable Performance Examples of Initiatives Concept Decision/Time Defined Acquisition Capital Budgeting Risk-Based Source Selection Defense Acquisition Executive Summary (DAES) IIPT/OIPT/DAB/Portfolio Management Processes Systems of Systems/Centers of Excellence Award/Incentive Fee Policy/FAR/DFAR Δ’s Acquisition of Services Policy Human Capital Strategic Planning Lead Systems Integrator/Spiral Acquisition Industry and Congressional Outreach “THE WILL TO CHANGE…” 2

Concept Decision Toolkit RISK-BASED SOURCE SELECTION • Reducing Risk and Improving Source Selection TRI-CHAIR CONCEPT DECISION • Improved Process Alignment • Focused on Department Investment Decision Options • Time Defined determinations MS A MS B CD Strategic Joint FAA FNA JCD Planning Concepts Guidance OSD/JCS COCOM E EOA Tech O Rpt Dev CDD A CAPITAL ACCOUNTS • Program Funding Stability MS C FRP DR B’ SDD CPD PD O&S CDR FCB Stronger Emphasis Technology Development—TRL/IRL TIME DEFINED ACQUISITION STRATEGY • Multiple Customer-Focused Paths to Speed Fielding of Capability • Post-Initiation Stability Initiatives MRL Science and Technology Base CD Methodology—Broad Acquisition Initiatives 3

Why do Concept Decision? § Accelerate delivery of Joint warfighting capabilities § § § o Current process slow to respond to warfighter needs Address resource/funding constraints early o Necessary to control cost growth/requirements creep o Adequately fund and stabilize funding stream Tailor analysis to support decision at hand o Not all programs require extensive, time consuming and costly additional analytical efforts Leverage Service/organizational competencies o Delegate execution o Minimize oversight Challenge: Maximize Process Change…Minimize Bureaucracy 4

“As Is” Process As Is: • Serialized • Program-Centric • Closed Aperture • Significant Early Service Commitment of Resources Existing Focus Here Concept Decision MS A MS B MS C Full Rate Prod DR Strategic Joint Planning Concepts FAA FNA Guidance JCD FSA ICD A Concept Technology CDD o Refinement Development A System CPD Development & Demonstration Production & Deployment O&S Incremental Development OSD/JCS COCOM FCB Technology Development—TRL/IRL Science and Technology Base MRL 5

New “To Be” Process To Be: • Aligned • Capability Orientation • Open Aperture • Joint • Broad Range of Options Future Focus Here Concept Decision MS A MS B MS C Full Rate Prod DR Strategic Joint Planning Concepts FAA FNA Guidance JCD E o A Eo. A Report Technology Development CDD System CPD Development & Demonstration Production & Deployment O&S Incremental Development OSD/JCS COCOM FCB Stronger Emphasis Technology Development—TRL/IRL Science and Technology Base MRL 6

Concept Decision: Notional Next Layer COCOM/Service/ Agency ce i rv Se 2 3 EOA PORTFOLIO Based: Investment Strategy Competitive Solutions FCB assesses, prioritizes gaps, shortfalls, and redundancies/ offsets ICD Rapid l. C ap ab ili ty Concept Decision lo i Ta na 1 CPD d re CDD pe ra tio M CO O C Affordability FULL O JCD FNA Eo. A Guidance CONOPS C al Technology Maturity B In iti FCB, COCOM, Service–led Requirements A Time-Defined Acquisition CCJO, JOCs, JFCs and JICs FAA CORPORATE TRI-CHAIR INVESTMENT DECISION JCD sponsor drafts, PA&E approves, Tri -Chair directs Balance Risks Establish Baselines BOUNDED SOLUTIONS (I. E. 40 TO 80%) 0 < Years < 8 7

Concept Decision From / To Savings From FSA + Ao. A To Eo. A Savings. Metric 30 Months (min) 6 to 12 months Shorter @ Milestone A or B Left of Milestone A Earlier Fragmented Approval Focused Approval Buy In Single Service Joint/Integrated Choices Performance Driven Trade Off Driven Constraints 8

Time-Defined Acquisition A Customer-Focused Concept that: • Enhances system agility • Capitalizes on Rapid Acquisition Authority and the Concept Decision • Employs a time-sensitive acquisition approach emphasizing Customer Response and designed to provide capability when it is needed • Uses three risk-based criteria to determine the Acquisition Strategy: • Time to delivery • Requirement certainty • Technology maturity • Rapid requirements Triage via Gatekeeper function inherent in Concept Decision methodology • Enhanced by Enabling Actions: • Requirements Stability • B “Prime” CUSTOMER NEED TIME-DEFINED ACQUISITION STRATEGY Rapid 6 mo – 2 yrs Limited 2 – 4 yrs Full 4 – 8 yrs MILITARILY USEFUL CAPABILITY Our First Priority is to Produce Useful Capability for the Warfighter When Needed 9

Requirements Stability—A Time-Defined Enabler BASE KNOWLEDGE OF REQUIREMENT - Key System Attributes MS A SPG OSD/ JCS Joint Concepts FAA COCOM FNA IMPLIED AND DERIVED REQUIREMENTS UNDERSTOOD DEVELOPMENT CONTRACT AWARD MS B CD EOA Tech JCD EOA Rpt Dev CDD FCB Potential B “Prime” • A logical point, subsequent to Contract Award, where “Implied” and “Derived” requirements are known • At System CDR, or “B Prime, ” that knowledge is available. There should be a required APB review at this point so we can assess the cost and schedule impact and identify non-value added cost drivers MS C B’ CDR FRP DR SDD CPD PD O&S Rqmts Stabilized Proposed Requirements Stability • No changes that may result in additions or extensions to baselined cost or schedule after CDR unless approved by the MDA and Requirements Approving Official • If such a change is approved by specified authority, it shall be self-financed and shall NOT impact schedule • Default policy should be to defer proposed changes 10 to follow-on increment

Funding Stability MS A SPG Joint Concepts FAA FNA MS B CD EOA Tech JCD EOA Rpt Dev CDD MS C FRP DR SDD CPD PD O&S Funding Stability OSD/ JCS COCOM FCB Capital Accounts • A financial initiative designed to provide stability in the budgeting system and to establish accountability for acquisition programs throughout the hierarchy of program responsibility • Implements a risk-informed investment strategy reflecting joint warfighter priorities • Consistent with the QDR and section 1004(a) of the FY 06 Authorization Act, the Department is exploring capital accounts to stabilize funding for selected major programs • Process will be part of the larger risk-informed investment strategy used to inform future investment decisions. 11