Major Systems Acquisition Management Process - Justia GAO Reports

c%ITED STATES COlXRKMENT 

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GENERAL ACCOUTWING OFFICE 

January 29; 1982 

SUBJECT: MASAD/SDA Handbook __,. 

The attached handbook contains reference material' essential to -a clear 

understanding of the major systems acquisition management process.\ It is 

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for your personal use in your daily work. 

From time to time we will either update the material contained therein 

or add new material. You will be responsible for making the changes-uppn 

receipt of the new or updated material. If you are reassigned-out 0.f SDA, 

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I would appreciate your returning the handbook to my secretary so that it i: 

can continue to be ?ut to good use. 

Attac hnent ., 

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3eport on Initiative No. 5g. 

Title: 

Patent Policies 

ACTION REGUIRD BY DEPSECDEF 

AIEMORAHDUM OF APRIL 30: 

Provide a consistent policy which will promote innovation by giving contractors all 

the economic and commercial incentives of the patent system. Provide policies to 

protect proprietary rights and data. 

BCCOFIPLISHWXTS TO DATE: 

1. Patent Policy: The DAR Patents Subcommittee concluded in a 7 August 1981 

feport that current DoD policy of permitting contractors and subcontractors to 

acquire title to inventions made under most DoD R&D procurements fulfilbs the 

initiative objective of giving contractors all the economic and comercial 

incentives of the patent system. The Subcommittee report included an informational 

item suggested for publication in an upcomiag Defense Acquisition Circulgs (DAC) to 

remind contracting officials of the policies and procedures governing patents. 

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2. Technical Data: 

a. The DAR Technical Data Subcommittee concluded in a 14 August 1981 report 

(DAR Case 81-79) that DoD policy complies with the initiative objective of 

protecting proprietary rights and data. The Subcommittee identifies on-going 

efforts to better implement this policy, as follows: 

(1) A DAC issued 15 May 4981 added DAR coverage to permit delivery of 

eomqercial computer software with restricted rights without case-by-case 

negotiation. 

(2) A proposed-DAR change to permit Government acquisition of less than 

unlimited rights to privately developed ADPE and compute!- software was sent to 

Industry. Csments biere due 19 December 1981 (DAR Case 80-62). 

(3) The Subcommittee is dsveloping DAR coverage on alternatives to the 

acquisition of unlimited rights in technical data and computer software for the 

purpose of establishing competition (DAR Case 80-143). 

b. The Subcommittee report included an informational. item suggested for 

publication in an upcoming DAC to remind DoD contracting officials of the policies 

and procedures governing technical data rights. 

SARRIEXS TO IMPLEMENTATION: 

1. Patent Policy: None 

2. Technical Data: Industry appears concerned that, despite stated policy, DoD 

is: (i) acquiring unneeded rights to technical data, and (ii! is sometises not 

adequately protecting data from disclosure outside the Government. 

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STSCIYX hCTZ3NS M c,NSURE WLDE3ITATION AM) 

IXPE3ENTBTION SCHEDULE: 

1. Patent Policy: 

a. By January 1982, DAR Council review Subcommittae report. 

la. By March 1982, DAR Council publfsh DAC infor=tiomL item on policies and 

procedures governing patents. (Action considered closed upon DAC publication). 

2. Technical Data: 

a. DAR Case 81-79: 

(9) By January 1982, DBR 

(2) By Marah 1982, DAX 

policies and procedures governing 

Council review Subcommittee mport. 

Council publish DAC infornational item on 

technical data rights. 

b. DAR Case 80-62: By March 

80-62 and issue DAR revisions. 

1982, DAR Council review Industry c~menbs on 

C. DAR Case 80-143: 

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By January 1982, Subcommittee complete coverage. 

(2) By March 1982, DAR Council issue.coverage to Industry and the BOD 

Components for coment. Comments should also be aal$cfted mgardiq any 

additional measures needed to protect technical data rights. 

(3) By July 1982, Subcommittee review comments and revise and/or di.aft 

new coverage as necessary. 

(4) By November 1982, DAR Council review and issue DAR revisions.

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Reqort on initiative No. 5h. 

BCTION 3EQU1,SED BY DEPSECDEF 

Title : Vinson-Tramell 

MEMORANDUM OF APRIL 30: 

Act Repeal 

General Counsel should work to repeal the Vinson-Trammel1 Act. 

ACCOMPLISHMENTS TO DATE: 

The BOD Authorization Act of 1982, signed on 1 Decenber 1981, provides for repeal 

of the profit limitation provisions of the 1934 Vhaon-Trammel1 Act and authorizes 

the President, upon a declarztion of war or national emergency, to prescribe such 

Pegulations as are datermined necessary to control excesvfve profits OB defense 

contracts. 

BARRIERS TO IMPLEME24TATION: 

None. 

SPECIFIC ACTIONS M ENSURE WLE"TA"ION 

AND IMPLEXENTATION 

1. By January 1982, USDRE(AM1 direct DsB procurement activities to immediately 

discontinue Fnclusion of excess profit provisions in all contP~ets/solicitations. 

2. By June 1982, DAR Council revise Defense Acquisition Regulation to reflect 

elimination of Vinson-Trammel1 excess profit provisions. 

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ACQUISITION BPROVEMENT TAS$ FORCE 

Report on Initiative No. 6. Title: Budget to Most Likely Cost 

c Task Force Principals: Mr. J. E. Williams & Mr. J. T. Kammerer 

ACTION REQUIXED BY DEPSECDEF MEMOXANDCTM OF APRIL 30: 

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UD(C) require the Services to budget to most likely or" expected costs, including 

predictable cost increases due to risk,. hstead of the contractually agreed-upon 

688t. USDRE and the Services provide incentives for acquisition officem amd 

contractors to accurately project costs, inclr?ding financial incentives and 

perfsmce evaluation considerations to DoD personnel, and profit incentives to 

industry to reduce costs. 

BCCOMPEPSHEMENTS TO DAZ'E: 

1. In accord with the Nov 20, 1981 DRB decision, the Service Secmtaries are now 

required to explicitly choose between program manager and independent system cost 

estimates, and explain their choices to the DepSecDef. 

2. The OASD(C) is, during the annual budget review, examining development and 

early procurement cost estimates to make sure they adequately accommodate progym 

risk and are not a reflection of contractual targets alone. The CRIG is attempting 

to explain all differences among Service and OSB cost estimates at designated 

c Program. Reviews OPDSARES, to explain all significant variances, and to track all 

-cost estimates from mileatcne to milestone. 

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BARRIEBS To IMPLEMENTATION: 

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Continued optinisim on the part of sponsoring acquisition organizations is 

probably the greatest remaining barrier to this initiative. In particular, the 

initiation of overly ambitious subsystem development is a matter of concern lest 

this critical path element may delay acquisition of the entire program. See 

Initiative No. 2, Preplanned Product Improvement, for progress in this regard. 

SPECIFIC ACTIONS TO ENSURE IMPLEMENTATION AID IMPLDIIENTATION SCHEDULE: 

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1. The DSARC Chairman should call new DSARC meetings for performance, schedule and 

cost threshold breaches. 

2. Continued high-level attention must be focused on this initiative through the 

Steering Group, and a study made of appropriate incentives, possibly through an 

Ad Hoc committee lander the Steering Group. 

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ACCUISITION PIPIIOVEMEHT TASK FORCE 

,Pepart on Initiative No. 7. Title: 

Economic Production Rates 

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Task Force Principals: BG C. F. Drenz, USA & Mr. T. P. Christie 

ACTION REQUIRED BY DEPSECDEF MEMORANDUM OF APRIL 30: 

Secretary of Defense establish policy requiring Services to f'und programs at 

economic rates or justify any differences during budget seviews by OSD and the DRB. 

USDRE and ASD(C1 include this requirement in the FY 83 progsan and budget guidance. 


1. The spirit of this initiative carried through the FY 81 supplemental and FY 82 

amended budgets by increasing or restoring production rates for several programs 

that were being funded at inefficient rates. Par the most part, the Service POMs 

continued this momentum toward high rate efficient production in their POM 

submissions. 

2. When we look back on m y FY 83 budget decisions to this point, however, there 

is reason for deep concern, if not alarm. We have reduced funding for the very same 

programs (M-1 tanks, Fighting Vehicle System, Patriot, A&, P-3C, A-10) for which 

we requested additional money in the FY 82 budget amendment. 

3. The most- recent DRB dechiona af the past several weeks have taken steps in the 

rightc-djszctioa; but maxy of the ume important decisiom we stUl pendingo The 

Services have beeu directed by the DRB to establish offsets in the FY 83 budget to 

adlow production at =re economical rates of certain systems, such as the ,Mark 46 

torpedo, the TOV anti-tank missile, the F-18 fighter, and the re-engining of the 

KC-135 tanker. Theseedecisions are being reviewed by the DRB as the E'Y 83 budget is 

finalized 

4. During this past year the programming budgeting system has been plagued by 

uncertainty. Target figures for the top-line have fluctuated, and the system bas 

shown little versatility in adapting to what has become the rule, rather than the 

exception-budget uncertainty. This inability to adapt efficiently can be 

attributed to an absence of agreed upon priorities that leads to a reluctance to 

terminate marginal or low priority programs. 

BARRIERS M IMPUME24TATION: 

1. The. primary barrier to implementation of this initiative has been the 

uncertainty of the defense program budget level. 

2. The inability, so far, on the part of Cungress, OSD, and the Services to 

establish a sense of mission priorities makes the response to budget uncertainties 

lack of sense of unity and common purpose, 

c 3. The continued unwillingness to cancel program precludes other DepSecDef 

.initiatives, Whsn Congresa, OSD, or the Services do offer a program for 

cancellation It is likely to be restored. mere is little commi';ment to 

establishing priorities and cancelling marginal programs to respond to budget 

reductions. 

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4. Thers are legitimate reasons to produce at an uneconomic rate in special cases. 

?reduction problems sometimes justify a less than economic production rate. For 

example, certain parts are impossible to acquire at a rate necessary to support a 

higher production rate. Technical problems constituting considerable risk also 

my justify a less than economic production rate. The Patriot missile, which has 

experienced software difficulties, is a case in point. Programs that plan for a 

relatively small buy can never efficieatly build to their economic rate. And, 

other initiatives intended to improve the acqisitien process sometimes interfere 

with the goal of higher production rates. For example, to stabilize production and 

to inplement multi-year procurement initiatives, it may be desirable to lock a 

progPanr in at a less economlc rate. 

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5. Warm production lines, even when operatirig at inefficient rates, are usually of 

a real strategic value, and their marginal utility should compete on an equal 

footing with other defense programs for our limited resources. We should expect 

some of them to fare well in the budget proteas. 

6. There is a lack of understanding in contrasting "economical production rates" 

with "efficient production rates." A larger buy usually produces a more effjdent 

rate, but the most economic rate refers to the r q e where the marginal utility of 

an additional unit no longer realizes the same savings as the previous unit--that 

is, the "knee of the curve." Programs aiia for the most economic rate that meets the 

threat (even these definitions are not universally accepted; so, as a first step, 

an agreement on the definition of terms is required). 

SPECIFIC ACTIONS TO ENSURE IHPLEXWTATION AND IMPLEMENTATION SCiiEDULE: 

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- 7.. Bra understanding among decision-makers needs to be established to work Lowasda 

the more economic. rates fur our program and to cancel os truncate lower priority 

programs to maintain the economic rata of others, while at the same time the ralue 

and priarity. of various Warm production lines is not lost in the process. 

2. Such an initiative needs to show commitment on the past of the initiator: 

through the Defense Guidance, the PDM, and the day-to-day DRB decisi0n.s 

demonstrate the seriousness of it's intent. Otherwise, an initiative like 

succumbs to business a3 usual. 

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3. 'The timing must be immediate. OSD and the Se-cwices must hold themselves to 

task on this initiative. It is only then that the Congress will sense a unity of 

purpose and be willing to support such a DoD initiative. The final DRB decisions 

on the FY 83 budget are of paramount importance tu demonstrate seriousness and must 

support this initiative or we must accept that it will not be bplemented. The 

Services must compile their offsets so as to support fully the DRB's most recent 

efficiencies (TOW, Mark 46, KC-135 re-engining, F-18, etc.). Then to maintain the 

momentum, the Defense Guidance must reflect: these types of efficiencies to orient 

the FY 84 budget properly. Also, the DoD Acquisition Executive (USDRE) through the 

Service Acquisition Executives needs to define terminology and implement an 

education process within the program management community to effect an 

understanding of what is economic, efficient, etc. 

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4. Finallby, as parr, of achieviag Milestone 11, programs should be required to 

esti~ate wnat the economic production rate's range of values is, and the estimate 

should be updated periodically. (For certain programs, the Acquisition Executive 

my find it better to determine this range earlier than Milestone 11.1 Tne 

Services, when choosing to take a program to DSMC 11, should understand that they 

are then responsible either for supporting an economic rate through the PPBS or for 

justifying why another rate is necessary. 

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SPECIFIC 

ACQUISITION IKFROVEEENT TASX FORCE 

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Report on Initiative No. 8. Title: Assure Appropriate Contract Type 

Task Force Principals: Mr. J. E. Williams h Mr. J. T. Kanmerer 


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1. Establish an OSD, Service, and. Industry working gsoup to deve!.?]? an 

implementation plan to ensure that appropriate contract types are used. 

2. Ensure that Program Managers have the responsibility for determining 

appropriate contract tne. Ensure clarity in regulations. 

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ACCOMPLISHMENTS TO DATE : 

A joint working group was established, consensus reached within the DoD and policy 

guidance drafted for DepSecDef signature. 

BMRIEIZS TO IMPLEMENTATION: 

Achieving Industry consensus. 

ACTIONS TO ENSURE IMPLEMENTATION AND SCEDUEE: 

1, DUSD(AW meet with Industry (NSIA,.AIA) in January to inform the= of t.be DoD 

policy on selection of contract type. 

2. DepSecDef issue the Do3 policy memorandum. Should be complet'ed by 31 Jan 1981. 

3. Service Secretaries enzure implementing regulations are in compliance wj.th DoD 

policy within 90 days and notify SecDef, thereby closing out administrative actions 

required under this initiative. Continued monitoring is required. 

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ACQUISITION MPROVEMENT TASK FORCE 

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3eport on Initiatives No. 9 h 31. Title: Improve Support and Readiness 

Task Force Principals: Dr. R. D. Webster h VADM R, R. h!orwoe, USN 

ACTION REQUIIED BY DEPSECDEF MEMORANDUM OF APRIL 30: 

These initiatives support the magement principle enunciated in Initiative Ho. 1 

that "Improved readiness is a primary objective of the acquisition process of 

comparable importance to reduced unit most or reduced acquisition time. Resources 

to achieve readiness will receive the same emphasis as those required to achieve 

schedule OF performance objectives. Include from the start of weapon system 

program designed-in reliability, maintainability and support .w 

a. Action required by Initiative No. 9 was WALL draSt SecDef policy letter 

to be issued within thirty days, reaffirming weapons support policy and object?.ves 

and tasking the Services to develop implementing guidelines, including procedures 

for addressing support early in acquisition programs." 

b. Action required by Initiative No. 31 was TJSDRE issue guidance adding early 

assessment of support options to the current procedures." 

ACCOMPLIS-TS TO DATE : 

1. A memo nas signed by DepSecDef on June. 13, 1981, which requjsed the Services to 

take impleaenting actions, within a year,. fa the.following ai'eas: 

a. 'Assigning readiness goals .as design objectiaes and primary managcuent 

tools. 

b. Developing guidelines for additional front end finding. and sLtentioti for 

concurrent development programs. 

c, Designating programs for support emphasis. 

d. Establishing organizations and procedures to hplezent the policies. 

2. Service bnplementation responsibilities have been assigned and implementation 

timetables have been established. Progress briefings have been provided by the 

Services. The procedural aspects of implementation are currentlp being uorked 

(revision of directives and handbooks, development of procedures for assigning 

readiness objectives, etc.). 

3. Some initial steps have been taken to change organizations and 

responsibilities for making "designed-inn weapon system readiness.an integral part 

of all new acquisitions. Examples are the Navy s logistic assessment requirements, 

included in a recent instruction on operational availability, and the Amy's p!an 

ta augment logistic review capabilities to support their ASARC assessments. 

4. Implementation of Initiative No. 31 is being accomplished ulthin 

as part of Initiative No. 9. USDRE has taken action to incoqorate 

Lie Services 

the guida.nce

c required by Initiative No. 31 in the revision of DODI 5000.2. 

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BARRIERS TO M?LEXENTATION : 

1. Impediments to progress fall in three categories: 

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Lack of management priority by the acquisition community. The perception 

at all levels in the acquisition community is that there has not been a substantial 

shift in traditional ~ranageneet priorities. As a result, program continue to be 

structured to give. top priorities to cost, schedule or perforuuce objectives; 

support and readiness considerations are left to be accommodated within these 

program constraints. Recent strategic systeta acquisitions, structured to meet 

tight I8C dates and constrained acquisition costs are pertinent examples. 

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b. Lack of front end emphasis and processes. Although progress has been made 

is getting support issues addressed as part of production decisions, the front end 

, planning processes for new weapons programs do not typically address measures to 

reduce support risk. Ambitious cost and schedule objectives can be accommodated 

with mi.ni;?91 adverse effects on support if the f'undhg is made available for 

additional test hardware (Initiative No. 121, reliability aand support incefitives 

(Initiative No. 161, or other sisk-reducing measures. This must be done early in 

the acquisition cycle-since, once the R&D funding is fixed through PPBS actions or 

ceilings on development cost, there is little opportunity. to add efforts to affect 

the support charactersstics ih'lerent in the new system. 

c . Inadeauate_Ec,edures, organizations and technical capabilities. The 

* Services have only recently issued their revised 'cop level directives rer'lectiiig 

L the 1980 update of DdlD 5060,1, DsDI.SB00.2, and DoDD 5000.39, The Sefvices have 

mL issued their hplementing directives far DoDR 5000.48; Work is underdzy to 

develop fnwerc.ticr fmplementing instructions, -handbooks, etc. The Servfce 

a implementation plans shaufd be entirely adequate to remove procedural bzrrisrs, 

but it will take a. year or more before the new procedures are in routine use by 

9rogram nranagers. . In the interim, some programs should be selected for ad hoc 

attention and trial application of the new procedures. 

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( 1) Organizations responsible for logistic assessments and for bdependeat 

evaluation of the readiness implications of test results need strengthening, to 

varying degrees, in each Service. 

(2) An organizational barrier identified by the DSB 1981 summer study on 

readiness is that the logistic organizations in OSD and the Services are set up to 

wage support f'unctions (supply, maintenance, training, etc. 1 with little 

visibility of the total support resources and their interactions for a weapon 

system. Initiative No. 30, which would give the program manager greater visibility 

and involvement in support resource decisions affecting his weapon system, is a key 

element in resoving this barrier, 

(3) Technical difficulties include the lack of a standard set of terms for 

readiness and support-related parameters, and the failure to apply established 

analytical approaches to relate design characteristics and support concepts and 

resouraes to readiness goals. Much progess has been made, case-by-case, in recent 

acquisition programs in all three Services. However, major programs continue to 

come fomard for DSARC review without well defined and consistent support and 

readiness goals. The problem !IOU is to take the best features of the good examples 

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esourcss to readiness goals. Much progess has been made, case-by-case, in rscent. 

acquisition propams in all three Services. However, major programs continue to 

come fomard for DSARC review without well defined and consistect support and 

readiness goals. The problem now is to take the best features of the good examgles 

and institutionalize them, as well as continuing to inprove analytical approaches 

and data bases. 

SPECIFIC ACTIONS TO ENSURE PIPLERENTATION AND IMPLEMENTATION SCHEDULE: 

1, The program structure for each weapons system should include explicit XX&E 

periods, with highly visible support and readiness thresholds, to provide firm data 

to decision-makers at - production milestones. The support thresholds should be 

baaed on realistic schedules for availability of support elements at each 

milestone. (Include a8 revision to DoDI 5000.2 and DoDD 5000.3). 

2. Service and OSD managers should include as an agenda item in each program 

review an assessment of readiness objectives, risks in achieving these, and options 

to reduce the risk. At program initiation, the review should address the 

acquisition strategy including front end funding, contractor incentives, design 

and supportability tradeoffs, alternative schedule and funding approaches and 

effect on readiness achievement. Implementation requires revision of the policy 

directives and instruction8 (5000.2, 5000.3, 5000.39, 5000.40); assignment of 

staff expertise to carry cut the front end planning and assessments; and changes in 

procedures to emwe that readiness and support are routinely included on the 

agenda of milestone and other program planning meetings. 

3. Top magemeat. must create awareness of the necessity for support and readiness 

within the acquisition commurrfty and must continue to emphasize policies and 

procdups ror denigned-.in reliability and maintainability. 

4. MBA& and.USDRE should establish an OSD/Service working group ora specifying 

support-related DSARC goals. The objective would be to assist each Service in 

completing their guidelines by June 30, 1982. 

5. Each Service should assign responsibility and resources- for quantita2ive 

assessment of the readiness implications of the measured R&M characteristics and 

resource utilizatio-n observed in early ThZ. (Include in revisions to 5000.2 and 

5800 -39) 

6. The Services should implement the milestone plans which they have submitted in 

response to the 13 June memo by Secretary Carlucci. 

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ACQUISITION IMPROVEMENT TASK FORCE 

!ieport on Initiative No 10. Title: Reduce the Administrative Cost and Tine to 

Procure Items 

Task Force Principals: LTG J. H. Merryman, USA h Mr. J. W. ffelcluaer 

ACTION REQUIRED BY DEPSECDEP MEMORANDUM OF APRIL 30: 

Items: 

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b, 

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Raise 

Raise 

Raise 

small purchase ceiling from $10,000 to $25,000. 

&eshold for contractor costing data input from $loOK to $500K5 

threshold for Secretarial DbF's for RLD from $laOK to $1M. 

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3NOTE : 

Encourage greater use of class DhFs. 

Raise reprograming thresholds. 

Eliminate need for non4ecretaria.L DbFs. 

Legislation in Congress raised this from $10OK to $5M (in lieu of Do!>'s 

rcqueut of $ fM) e 

BCCo1spT81S~2S TO DATE : 

Items's, b E c. All three actions have been included in "Department of Defense 

Authorizatbsn A'ct-, 1982." The Act was signed,into law (P.L. 97-86) on 1 Dec 81. 

Item d. 

Item e. 

Item f. 

Dropped as being- unneeessary-determination made by DUSD(AM), 

Transferred to Initiative 15--determination made by DUSD(AM1. 

Dropped as being not feasible-determination made by DUSD(AI4). 

New Item 

purchase 

BARRIERS 

g. OSD initiated new action to develop simplified contract format for 

above small purchase threshold and under $loOK. 

TO IMPLEMENTATION: 

Items a, 

b h c. 

None. 

Item g. Many contract clauses are i*equired by statute or to protect the 

Government's interest, AF, with support from Amy, Navy and DLA, will have to work 

around these, shorten or eliminate them, where possible. 

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STECIFIC ACTIONS TO ENSURE IMPLEMENTATION AM) IMPLEHENTATION SCXDULE: 

Items a, b & c. DAR Council initiated actions for implementation within DoD. 

Target date for interim implementation is within 30 days (31 Dec 81). 

Item g. DepSecDef memo tasking AF with lead requires submission of milestone plan 

for completion by 15 Jan 82. 

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Report on Initiative No. 11. Title: Budget Fmds for Technological Risk 

Task Force Principals: LTG J. H. Merrynark, USA h Mr. J. W. Melchner 

ACTION mauIm BY DEPSECDEF HEMORANIUM OF APRIL 30: 

SecBef emphasize the requirement to evaluate, quanti0 and plan for risk. USDRE 

direct all Seaices to budget funds for risk. In particular, each Service should 

review the TRACE concept and either adopt it or propose an alternative for its use 

to USDRE within 60 days. 

ACCOblPLISHMENTS TO DATE: 

1. Army: TRACE concept iaplemented for several pears. 

2. AI?: Completed evaluation of TRACE. Proposed to USDRE, on 24 September 

1981, continuation of a similar QF system. 

3. Navy: The risk cost estimating concept is being implemented in NAVAIR. The 

concept is identical to Army TRACE. Wider application of the TIiACE concept is 

being considered for ?OM 85 implementation for undetermined programs in NAVSEA and 

NAVZLEX sgstem commar.ds. 

BARRIERS TO IMPLEXEU'BTION: Noneo -I ' 

WSDRE should add Section V.F.3. 

to Defense Guidance for POM 84-88 as follows: 

3. Programing for Technolauy Risk. Services will develop methods and 

procedures to quanti0 technological risk dura development and will budget funds 

where appropriate to contend with this risk. 

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Xeport on Initiative No. 12. Title: Provide Adequzte Front-end Funding for Test 

Hardware 

Task Force Principals: ‘VADM R. R. baroe, US?? h Dr. R. D. Webster 

ACTION REQUIRED BY DEPSECDEF MEMORANDUM OF 30 APRIL: 

“USDRE ensure that. the acquisition strategy identify plana for and funding required 

to acquire adequate subsysten and system test hardware to reduce overall schedue 

time and risksow 


.’%me support-in prinsiple-for this illitiative has been included in vording of 

various OSD and Service directives; however, nothing has been done which could be 

expected to bring about a change in actual practice. 

BARRIERS TO IMPLEMENTATION: 

The real problem is our attitude about teat and evahatiorn (T&E). Most of those 

involved in the acquisition process: 

a- --e an underlying belief thai: system will work ay adver:iised; 

L, Tend: tc .i.egard:T&E. as a .“wicketn to be passed, rather than an essentia% 

tool in the process; 

c. Believe that, in most cases, money can be saved and the acquisition pseeess 

speeded up by reacing test hardware and .test periods; 

d. Seem quite willing to give program go-aheads at key points uithout 

reviewing test results; and 

e. mea confronted with poor test results, tend to. be willing to accept 

promises of correction, and to be impatient about delaying the program to correct 

problw and retest. 

As a result of these institutional attitudes there is an unwillingness to commit 

reaources to buy adequate quantities of development hardware. 

SPSCIFIC ACTIONS TO EMSURE IMPUREITATION AND IMPLEMENTATION SCHEDULE: 

No single, one-time, action or group of actions will achieve any real results. We 

will get adequate front-end funding for test hardware only if attitudes about T&Z 

are changed, and this will require a steady, concerted, long-tern effort 

across-the-board , both in our policy/procedure directives and in our actual 

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actions, week by week, in decision-making on specific programs. Rhetoric in 

support of TSE will not suffice- It must be backed up by the early commitment of 

reaourcez required to carry out adequate ThE during all phases of development. The 

ppoposed action program is as follows: 

a. Incorporate one or two brief additional policy statements about TdrE in 

draft DoD Directive 5800.1. (Note: It has been typical of our attitude about TPsE 

that ne bve relegated its treatment to DoD Directive 5000.3, and have not included 

st~ong reference to ThE in DaDD 5800.1 OP DoBI 5000.2. This omission reinforces 

the view that ThE is an isolated topic, rather than an integral aspect si systea 

acquisition. ) 

b. Accomplish the same upgrading of' attention to TBE by specific procedural 

references in DoD Iastructioa 5008.2. 

CI In the forthcoming rewrite of DoD Directive 5000.3, give explicit 

attention to providing adequate frent-end f'unding for test hardware. 

d. DDTLE prepare (prior to 31 Dec 1981) two hard-hitting letters for 

DepSecDef's signature on Initiative No. 12; one addressed to Service Secretaries , 

giving specific &dance on what is expected, and one addressed to USDRE(DBThE), 

placing increased emphasis on the DDThE role for ensuring adequacy of frant-end 

f'unding for test harduare. The purpose of the letters is to strengthen the hand of 

those few who argue for adequate TLE, vis-a-vis the many who argue for reducing 

RDT&E cost and time. 

e.- mile the above four actions uiU. start the implementation process, $he 

only really eff'ective effort- ulJ.1 -be the caae-by-case decisions made in &ieh 

pi'ogram over -the coning Oieeks and months. If we do not support nadequate front- end 

. funding Lor test hardware? here, no words i.n directives will matter. 

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ACQUISITION IMPIiOVEMENT TASK FORCE 

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IZeport on Initiative No. 13. Title: Governmental Legislation Related to 

Acquisition 

Task Force Principals: BG C. F. Brenz, USA h Mr. T. P. mristie 

ACTION REQUIRED BY DEPSECDEF WORMDUM OF APRIL, 30: 

USBRE establish joint OSD and Service team to weigh the impact of the various 

govermental requirements and regulations on the efficiency aad effectiveness of 

the total DoD acquisition and contracting process. hdustry and OMB should 

participate to the maximtun extent possible. A report should be prepared for the 

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I .. . - ACCOMPLISEMENTS TO DATE: 

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1. OSWService team offered its recommendations la A-t 1981 

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2. A rep0r.t on the status of each of the 18 issues approved for final actions is 

enclosed. 

BA.RRfF.RS 'TO IMPLEMENTATION: 

A% the Cangrcssional level, and during OMB level coordination witl? other Executive 

Departments/Agencies , the lnitfatives could encounter oppQsitJ.on frou other 

oonotituewieu such as organized labar and advocates of the nrliform Federal 

Fzo cur euent. Sy.9 t em 

SPECIFIC ACTIONS TO ENSURE IMPCPiEMIAT30N AND SblPLEMENTATfON SCWULE: 

. 1. DUSD(AM1 expedite internal OSD and Service/Agency coordination on the 

legislative iuitiatives currently. in the DoD coordination process !target 

date: 3.1 December 1981). 

2. DUSD(M1 determine the appropriate actions required to expedite accoap'l,; shment 

' of all the Initiative No. 13 recommendations in light of the exlsting pditical 

climate, etc. These actions could include high level DeD contacts with 

organizations external to DoD; e.g., OMB or Congress (target date: 15 January 

1982). 

3. DUSI)(AM) review the status of the initiatives on a monthly basis md take 

appropriate action based upon the political environment, etc. Provide a periodic 

report with recommendations for specific action to bepSecDef (target 

date: ongoing aceion). 

4. DUSD(rW) convene Task Group 13 on a quarterly basis Lo i'eview the overall 

Defense acquisition situation and determine if additional legislative initiztives 

are necessary. 

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5. Contizgent on the result of the deteminations discussed in 2. above, DUSD(AM) 

should seek support from appropriate industry organizations, e.g., American 

Defense Preparedness Association. 

6. Note that the FY 82 Authorization B ill increases the small purchase ceiling to 

$25,000 (Initiative 10). The legislative proposals contained irr this initiative 

support and augment that action. 

7. On 27 November 1981, BepSecDef tasked the Services and DLA to develap 

simplified contract formats for use above $ZS,OOO. This grodect is being monitored 

vlades Initiative No. 18. We recommend At$f support of this pg.egmm0 The initial 

project statu3 report is due DepSecQef by 15 January 1982. 

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SbJRY OF PROPOSED LEGISLATIVE IYITIATIVES 

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1. DoD continues to oppose draft legislation to provide for an extension of a 

pilot program of Section 8(a) contracting as the Director, OMS, was advised on 

April 9, 1981. Mark-up bills are in Committee. (S. 1620, reported in Senate 

28 September, Report No. 97-195. Companion Bill B.R. 4500, reported in House 

28 October, passed House 17 November. BiU is different than S. 1620--n0 exraption 

for DoD. 

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2. (a) Amend the WaPsh-Healey Public Contracts Act to increase the ui.nimerm 

threshold to $25,000. Legislative initiatives are being developed. (See issue 

number 10.) 

(b) Amend the Walsh-Healey Public Contract8 Act to permit a bday, 40-hour week 

without premium overtime compensation. The Congress is considering bills to this 

end that DoD proposes to support. (H.R. 2941 and H.R. 3185 referred jointly to the 

Committee on Education and Labor and the Judiciary-appear to be buried in 

Comaittee; no ac5ion since June. ) 

(c> Amend the regulations of the Department of Labor to eliminate the 

distinction beWeen suppliers of ne3 and used automatic data procassing cqulpment 

.with respect to the requirement to maintain, store, or warehouse stock. Regulatory 

initiatives are being developed. (Letter to DOL sent 17 Noveabzr.) 

3. Amend the Contract Work Hours and Safety Standard8 Act to permit a hiay, 

40-hour week without premirmun overtiine Compensation. The Congrzas is conuidering 

bills to this end tbat DoD proposes to support, (See 2(b) above.) - 0 , 

4. Support revision 'of current DOL regulatfcm (Davi=-Baco@. Act) to remove 

substantial administrative and direct costs in the acquisition ppecesa. lievise 

procedures for establishing prevailing wages, extending coverage to coastiuction 

helpers, and other changes. Revisions proposed by DOL are in the comment stage. 

(Comments provided 8 .October 1981. ) 

5. Amend the Service Contract Act to remove substantial administrative am! direct 

costs in the acquisition process. However, the Secretary of ldiwr has !.r.-oposed 

regulatory revisions that generally address these Same issues, and PaD has 

supported these changes. The voluntary regulatory 'changes will only become 

permanent by amendment to the statute. Specific legislative c.hanges were provided 

to OMB on 19 February 1981. (Legislative Proposal DoD 97-87 sent to OMB ail 

19 February 1981.) 

6. Amend the hed Seravices Procurenent Act to delete the ten percent fee 

limitation on cost-plus-fixed-fee contracts. Legislative initiatives art! being 

developed. (Draft legislation submitted to OSD General Counsel foi* coordimt.i.on on 

19 November 1981. , DUSD(AM1 to follow up and expedite. 1 

INIT 'I 3 

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7. Monitor DOL activity to streamline DOL regulations regzrding nondiscrinination 

in federal contracts. DOL has published revisicns for coment due 

26 October 1981. 

8. Amend the Copeland Acti-Kickback Act to relieve contractors of the 

requirenents to provide weekly wage statements. Legislative initiative is being 

developed. (Draft legislation submitted to 0SD General Counsel for coordination on 

19 November 1981. DUSD(AM1 to follow up and expedite.) 

9. Amend the Armed Services Psocurement Act to delete the requirements to solicit 

suggestions from retiring civilians and military personnel. BaD-sponsored 

legislation was submitted to the House of' Representatives on M y 1, 1981. (H.R. 

4276 introduced 27 July 1981. Refersed to Armed Services Subcommittee on 

Procurement and Military Nuclear Systems.) 

10, Amend 11 statutory thresholds to achieve a level of applicability fop 

significant socio-economic programs at $25,000. Statutes include, among others, 

the Davis-Bacon Act, Service Contract Act, Employment of the Handicapped Act, and 

WalsD-Healey Public Contracts Act. Legislative initiative is being developed. 

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INIT 13 

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ACQUISITION PlPROVEMMT TASK FORCE 

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Report on Initiative No. 14. Title: Reduce the Number of DoD Directives 

Task Force Principals: VADM R. R. Monroe, USN & Dr. R. D. Webster 

AC3ION REQUIRED BY DEPSECDEF MEMORANDUM OF 30 APRIL: 

"USDRE establish a joint OD, Service, Industry team to provide recommendations 

wrbthin 90 days' to substantially reduce the number of directives, and the 

documentation required in contracts." 


Significant early action has been underway. An OSB/'Gri-Service/~S~=~A team has 

reviewed 136 DoD acquisition directives and made specific recommendations on each 

(retention, cancellation, consolidation, etc. 1. Action officers are now reviewing 

these recommendations, with a December response date. 

BARXIEXS TO IMPLEMENTATION: 

k'e can expect the cqtire process to bog down at this point. There are three serious 

barriers to further action: 

a, The nom1 resistance to change (and unwillingness to dispense with any 

control mechanisms) exhibited by any large bureaucracy. 

b.' The immense inertia of any large bureaucracy in getting .revised directives 

on the street (even when the rewrites are strongly desired). 

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c. It is well recognized that a wise balance'mst be struck between reduction 

of directives and provision of adequate guidance for improving the acquisition 

process. 

SPECIFIC ACTIONS TO ENSURE IMPLi!?Z"TATION 

AND IMfLEMENTATION SCHEDULE: 

1. For each directive which was recommended for c-s (cancellation, 

combination, revision, etc.), fom a follow-up team from the offices which 

recommended the change. This team would ensure that pressure is maintained to 

implement the change recommendation, and would review the draft revisions before 

promulgation to ensure they accomplish the goal. 

2. Establish a amall wscere-keeping group." Have the group track results only, 

not intenthns or work Fn progress, on each of the 136 directives, reporting 

summary results [numerical) in USDflE(AMlts monthly sitreps, and fingering 

delinquent directives/offices quarterly in a list appended to the sitrep. 

3. DepSecDef issue a procedural directive stating that on I July 1982 all DoD 

acquisition directives dated prior to 1977 are automatically cancelltd. All 

reissuances prior to this terminal date will undergo the noma1 coordination 

required for any new directive, 

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ACQUISITI9N IMPROVEKNT TASK FORCE 

Report on Initiative No. 15. Title: Funding Flexibility 

Task Force Principals: LTG J. H. Merryman, USA h Mr. J. W. Melchner 

ACTION REQUIRED BY DEPSECDEF MPIOWUM OF ARPIL 30: 

1. Transfer Authority. UD(C), working with the General Counsel, OW and 

Congress, establish procedures for DoD approval of the traasfer of finds in a given 

fiscal year from Procurement to RDTU for an individual weapon system when the 

Seeretaw of Defense determines that it is in the National Interest to do so. 

2. Reproqraming Thresholds. Renew SecDef/DepSecDef efforts to obtain 

Congressional committee approval (HASC, SASC, HAC, SAC1 to raise reprograming 

thresholds from $2 million to $10 million for RDTG appropriations a d from $5 

million to $25 million for procuranent. 


1. Transfer Authority. On August 28, 1981, DepSecDef requested the 4 DoD 

oversight committees to approve a proposal permitting a notification reprograming 

action to the committees on tmsfers from procurement to RLD where the Axlds 

remab withi? the same program. This would be ;tn Lieu of a prior approval 

~eprogramciag action which is the current practice. None of the cormittees has 

responded to the letter. 

2. Repramming Thresholds. ASB(C) has written letters to and has had meetings 

with committee staff directors to press for the requested increases, which kp9 

fivefold the current levels. HASC and SASC have approved the requested increases. 

SAC has approved the increase, but not the levels requested by DoD. The SAC 

approval 4s for approximately a threefold increase and included this in its 

committee report. DepSecDef has written to the HAC on October 26, 1981, 

reenforcing the ASD(C) discussion with the HAC during hearings on October 7, 1981. 

To date, HAC has neither responded nor included the item in its committee report. 

The conferees agreed upon essentially a doubling of the existing reprogramming 

thresholds in military personnel, procweraent, and research, development, test and 

evalvation areas. No increase to existing thresholds for new starts was granted, 

and a limitation of only one below threshold reprogramming a year was imposed. 

BARRISRS TO IMPLEMENTATION: 

1. Transfer Authority. The committees are not focusing on the issues. 

2. Rerrfograminq Thresholds. The comittees are not convinced that a fivefold 

increase is necessary. 

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S?SCIFIC ACTIONS TO ENSURE IMPLEMENTATION ANI E-IPWTATION SCEDULE: 

1. Transfer Authority. Actions must be taken to reemphasize to the committees the 

need for the transfer flexibility. ASD(C) is attempting to have the conferees 

consider the change to notification procedures along with the increase to the 

thre%laelds (see below). If this is done, then this will become part of iten 2 

below. If not, then additional actions are needed. 

a. Military Departaents prepare and submit to OQSB(C) examples of Mew the 

bplementation of this Facreased flexibility uould save funds or improve program 

management (February 1982) 

b. OASB(C) meet with committee staff directors to secure their support. for the 

switch from prior approval to notification actions using the data provided by the 

M i l i tary Departments (March 1982 

c. If OASD(C) actions do not result in a change by early April 1982, SecBef 

and DepSecDef should arrange personal meetings with cornittee chaimen to force 

early action. 

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2. Reprogramins Thresholds. Given that the conferees partially approved the 

increased thresholds, actions need to be taken to implement the approved changes 

and to re-request increases to the threshold. 

a. OASD(C) prepare a letter change to the DoDD and DoBI on reprograming for 

immediate release to approve the changes agreed to by the conferees. (January 4, 

1982) 

b. OASD(C) should review reprogsaming activity again after 1 year and reapply 

for increased thresholds. (December 1982). 

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ACQUISITION IMPROVEMENT T AX FORCE 

Report on initative No. 16. Title: Contractor Incentives to Improve Reliability 

and Support 

Task Force Principals: Dr. R. D. Webster & VADM R. R. Monroe, USN 

ACTION XEQUIBED BY DEPSECDEF MEMO OF APRIL 30: 

mUSBRE working with the Services, develop guidelines to include the approaches to 

incsntivize contractors to improve support within 60 days, followed by a USDRE and 

Service evaluation of incentives within the next year. USBRE (lead transferred to 

MRAhL) develop with the Services, uithiaa one year, improved appsoaches to translate 

maintenance manpower skill projections into system design objectives." 

"Incentivesn in thb context includes a broad range of approaches to motivate 

contractors to improve reliability and support (source selection criteria, 

contract incentive provisions, warranties, contractor naintenance, etc.) 

TO DATE : 

1. USDRE memo dated 26 August 1981 provided additional guidelines: (1) "as 

normal course of action" use source selection and performance clauses as contractor 

reliability and support incentives unless clearly prohibited by acquisition 

strategy, (2) evaluate adequacy of policy on incentives using current experietice, 

new trial applications on both source selectionand support incentives and include 

contractor reactions. 

2. Numerous actions on-going within the Services. Service procureaent umagcrs' 

approach to this item is to provide a "positive climate" for application of 

Contractor incentives. Although the climate is positive, there is not widespread 

application (Air Force has widest application). 

3. Approaches are being developed leading to an ability to improve the capability 

to translate maintenance manpower skill projections into design or program 

requirements. Activities involve: 

a. MRA&L/Services have developed front-end logistic support anzdysis 

guidelines (Revised MilStd 1388) to identify early ("at the frant-endw) initial 

support 'drivers" candidates that can be iccantivized, and have specifically added 

approaches to identify skilled manpower and training requirexnents ., 

b. DSB study on Operational Readiness for High PerforrPance Systems 

reviewed Service suggestions on skilled maintenance manpower strategies 

recommend an approach to filling these needs by using contractor support in the 

tam and designing away complexity in the longer term. 

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JLTRIEIIS TO M?Lu?MENTATION : 

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1. Responsibility between procurement, acquisition, support and reliability for 

being the advocate and having the lead for incorporation of contractor incentives 

for readiness and support is unclear. 

2. Funding for contractor jncentives for reliability and support is not receiving 

appropriate emphasis in program or budget decision. 

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3. Evaluation of cursent experience or trial applications (US'DR!J memrandum) 

August 26, 1981) is not being given emphasis. There exists a general perception 

within some Services that these contract incentive3 uiU not be effective. 

4. There is resistance to including in the DoD acquisition policy revision, 

DoDD 5000.2, the requirements %or contractor incentives. 

5. There is a general feeling in the procurement community that the initiatives 

may unduly limit flexibility or cause emphasis on reliability and support out of 

proportion to the need. Also, these is general concern that establishment of 

stringent standards for reliability and support may delay production decisiors at 

end of development, when testing discloses significant reliability and support 

shortfalls. 

6. Increased use of contractors either as part of incentive arrangenents such as 

warranties or uoskarounds (to make up for critical skill shortfalls in the support 

area) is perceived as an undesirable because of potential for a sd.e source 

situation, 2nd because of reduction of in-house capabilities. 

7. The need for much wider dissemination, particularly to acqiihition managers, 

of the requirement to consider incentives and to provide training and information 

for selecting and imp%ementi.ng incentives approaches (the Air Force has the only 

organized start in this area). 

SPECLIIC ACTIONS TO ENSURE IM~LEMEXTATION 

IMPLMNTATION SCHEDULE: 

1. Service Material Commands establish senior level (SES/FLAG) group-procurenent 

support and reliability-to select and establish implesentation approach on each 

major weapon program at all Milestones. In addition they should evaluate 

experience on recent programs as outlined in the 26 August wmrandum. 

2. USDAE (Acquisition Management) review acquisition strategies in early program 

documentation for adequate funding for incentives and approaches to 'incentivizing 

support and readiness. This should be combined with a review of approaches to 

Illanaging unlt cost because of strong interactions. 

3. Estabiish, at Milestones I and II, highly visible relirbility and support 

thresholds for demonstration through test and evaluation prior to production 

decisions. 

4. In the revision of DoDI 5000.2 include policy guidance on the use of contractor 

incentives, responsibility for selection, and funding. 

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5. Establish a g~oup, under JEC, to identify or deVelQp contractor acentives 

approaches for support, particularly emphasizirg incentives for support cost 

reducticn. USDRE action to determine agproach in 60 days. 

6. Publish the 26 August memorandum on nIncentivesn in the Federal Register. 

7. Revise BOD Directive on Maintenance Policy (4151.11 to open the way for wider 

appbication of contractor support using appropriate incentives particularly in the 

area of high technology and fer o~-coming critical DoB skiff shortfalls. HRALI. 

&aft revision for eomment in 120 days. 

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ACQUISITION IWROVEMEHT TASK FORCE 

Report on Initiative No. 17. Title: Decrease DSARC Briefing and Data 

Requirements 

Task Force Principals: LTG J. E. Merryman, USA Q Mr. J. W. Helclaner 

ACTION REQUIRED BY DEPSECDEP MEMQRANOUM OF MRM, 30: 

USDR&E make explicit the changed character and the reduced number of briefings a d 

data for the DSARC review. 


1. BOD Directive 5000.1 has been revised and is scheduled to be published by 

December 31, 1981. 

2. BOD Instruction 5000.2 draft No. 4 is being prepared, This revision will 

eliminate the following docmentation and DSAIiC briefings: 

a. Integsated Program Summary requireaent was eliminated at Milestone I 

review and was reduced for the Milestone 11 review. 

b. Other OSD information requirenents were reduced for various decision 

points (Enclosure). 

3. Services have initiated the following actions: 

a. 3 - A ll changes are being reflected in revised drafts of' AR 1000-1 and 

AR 15-14, t;o be staffed when DoDI 5000.2 goes to printer. 

programs reviews in selected cases. 

MARC3 replaced by Army 

b. - DNSARC pre-briefs combined. All NAVMAT reviews are combined into a 

single NMC review. OPNAV note of 9 Jun reduces NDCP requirement and condenses 

format of other documents. SECNAV 5000.1 and OPNAV 5000.42 under revision. 

C. Air Force - Developing changes to SPRKAWMAR. Mill send policy letter to 

field. Updating AE'R 800-2. 


1. There is an apparent conflict with other elements of the Acquisition 

Improvement Program which require additional data to demonstrate compliance. 

2, 

DoD Instruction 5000.2 is needed for Service impleaentation. 

3. Services need to formalize procedures for assuming the delegated 

responsibilities. The role of Project Managers must be clearly established 

vis-a-vis the acquiring Service hierarchy, 

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4. Specific guicance an format and content of programs reviews is needed. 

SPECIFIC ACTIONS TO ENSURE IM%LEEENTATION AND IMPLZM3NTATION SCXEDULE: 

1. Ensure issuance of Doll Directive 5000.1, USDR&E by Decanber 31, 1981. 

2. Issue DoD Instruction 5000.2, USDRhE by March 1, 1982, 

3. Services and OSB must officially take action to reduce the time and effort 

required by DSAX and Service major systems reviews. Services aut publish 

iaplmsntiag instructions not later than 120 days after issuance fo DoD Instruction 

5000,2. 

4. OSD should continue follow-up actions to ensure implementation. 

a. Include Service participation in dll policy development, 

b. Re-establish use of Steering Group for review of monthly report to 

De pS ecDef . 

c. Publish specific guidance on format and content of program reviews. 

d. 

Identify specific data and briefing requirements reduced. 

e. Decrease number of Service SARCs. 

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f. Review dollar threshold for consideration of' level of review for programs 

the Service, 

g. Reduce or consolidate the briefings thai; PMs give at Servhe and major. 

command level. 

h. Identify specific information requirements eliminated, 

5. Although DoDD 5000.1 and DoDI 5000.2 have not yet been published, there are 

many things which the Services can do without -waiting -for those official 

publications. The Services should take appropriate action E to decrease internal 

data and briefing requirements.

DSARC IN FORMATION R EQUl R EMENTS 

PROGRAM REQUl R EMENT PROGRAM 

EFFECTIVENESS & 

INlTIATlON VALIDATION GO AHEAD PROOUCnON SUPfBRTABl LIM 

The thrust of Action 17 is to significantly reduce the amount of paper work 

required for a typical DSARC review; interim guidance was published in a 14 July 1981 

USDRE Memorandum. As suggestsd by this chart, the Milestone Reference File (MXF) has 

been eliminated for all DSARC reviews. In addition, the Integrated Pr~grare Summary 

(IPS) has been eliminated for the Requirement Validation review; this action will, of 

course, require that the System Concept Paper (SCP-an augmented Decision Coordinatins 

Paper (DCP) contain complete cost infomation on the alternatives to be considered. 

Tke Under Secretary of Defense for Research and Engineering is also examining the 

possibility of shortening the IPS for the Program Go-Ahead review scheduled to be held 

at the OSD. 

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Report on Initiative No. 18. Title: 

ACQUISITION IMPROVEMENT TASK FORCX 

Budgeting for Inflation 

Taak Force Principals: Mr. J. T. Kammerer & Mr. J. E. Williams 

ACTION REQUIRED BY DEPSECDEF MEMORANLXJM OF APRIL 30: 

Ceu~tsoUcr and PAhE develop FB mort detail the various alternatives addressing the 

inflation issue as related to planning and budgeting for major acquisition programs 

and provide a deeision paper to the Deputy Secretary of' Defense within 30 days; 

discus draft options with OM9 and appropriate Congressional staff. 

ACCOMPLISHMENTS To DATE: 

Required decision paper sent to Director, OMB by Secretary of Defense (6 Aug 81); 

OMB, DOD, congressional staff discuasioas held. Answer pending from Director, Om. 

Selected staff elements, material commands, and program offices sounded out on 

feasibility of design and construction of an output oriented major weapons system 

price index for support of budget submission and f'unding or "retrograde effect" 

during budget execution. 

BARRIERS TO IMPLE3fENTATION: 

Primarily national in scope, that is ultimately a decision between White House, 

Director, OMB, and SecDef. Until an agreement .is reached on budgeting for 

inflation more realistically, unbudgeted inflation %!il continue to cause massive 

pmgram instability and perceived cost growth. 

SPECIFIC ACTIONS TO ENSURE IMPLEMENTATION APSD IMPLEMENTATION SCXE3ULE: 

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Another staff (OSD(C1, PALE) effort to be made during December budget phase to move 

the issue forward Fn OMB National Security Directorate and. Economics Heview 

Division. Although initial discussions have been held with OMB, the Task Force 

recommends that the Department adopt a strong position on this issue and 

aggressively pursue the matter further. Further contact with Congress aaits 

development of an Adminiatration position. Anticipate a January follow-on 

contract effort to sample stable, in-production major weapons systems to establish 

feasibility and scope of effort tc construct a major weapons system price index. 

On site contractor work is anticipated. 

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ACQUISITION IMPROVMENT TASK FORCE 

Report on Initiative No. 19. Title: Forecastiag of Business Base Conditions at 

Major Defense Plants 

Task Force Principals: Mr. T. P. Christie & BG C. F. Drenz, USA 

ACTION REQUIRED BY DEPSECDEF MEMORANDUM OF APRZ 30: 

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"Contract Administration f'unctions will be directed to maintain a business base 

projection and government offices will be directed to support this effort and 

utilize these data in planning a d budgeting. The Om Cost Analysis and 

Improvement Group (CAIG) will maintain a data exc.hange for the Sexvices to assist 

ja approved forecasting. 


1. DUSD(AM1 issued instructions to the Services &d DLA on 1 June 1981. These 

instructions directed contract administration functions to maintain a business 

base projection at each major defense plant, It further directed program offices 

to provide program projections to plant representatives. 

2. DLA issued an Fmplementing letter on 17 June 1981. Army identified Hughes 

Helicopter (Venice), Bell Helicopter (Ft. Worth) and Boeing Vertol (Philadelphia) 

as their cognizant major plaats. A semi-annual reporting requirement was 

established. 

3. Air Force instructions were issued 1 October 1981. The instructions apply to 

programs exceeding $1QM ic any plant with a BOD plant representative. Five years 

of projections are to be made. 

4. Navy instructions were issued 23 October 1981, and were afinilar to the Air 

Force guidance. 

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5. CAIG representative met with USDRE and Service points of con&act to clarify 

intent of initiative on 30 Nov 87. 

6. CAIG representative met with Service representatives on 24 Nov 81 to decide ( 1) 

what implementing instructions are needed to satisfy the intent of the initiative 

and (2) what instructions will achieve a realistic, workable program. 

'4. The Cost h Economic Analysis Office, DPAdrE, has developed the Defense Economic 

Impact Modeling System (DEIMS) for use by industry to aid business forecasts. The 

model is currently available for use. 

8. OSD CAIG provided DUSD(AM1 a list of plants for reporthg pur?oses, definitive 

reporting requireraents and reporting schedule on 4 Dec 87, 

9. DUSD(AM) provided reporting requirements to Services on 15 Dec 81. 

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SMBIZRS TO Z??L3?NTATION: 

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STSCIFIC ACTICNS TO ENSURE IMPLMENTATION AND MPLEMENTATION SCYEDULE e 

3y 30 Apr 1982, Services and DLA forward first forecasts to CAIG. 

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Report on Initiative No. 20. Title: Improve the Source Selection Process 

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Task Force Principals: Mr. J. E. Williams & Mr. J. T. Kaxnerer 

ACTION REQUIRED BY DEIBSECDEF MEMORANDUM OF APRIL 30: 

1. Modify DODD 4105.62 to emphasize objectives, e&., pazt performance, sehedule 

realism, facilitlzation and cost credibility. 

2. Establish a DoD system for recording, documenting and sharing contractor 

performance. 


1. An interim report on DODD 4105.62 was prepared and reviewed by OSD and the 

Services. 

2. An Ad Hoc group (Amy, Navy, Air Force and OSD) evaluated the recommendation to 

establish a new DoD system to provide contractor performce information, This 

group unanimously suggested to DUSD(AM) that a new .system was unnecessary. 

BARRIERS M DEDLEMENTATION : 

1. The greatest barrier to implementation of an effective systen is th& Jmk of 

understanding of what is required to f'ulPy bnpEemen& this initiative. 

2. A second barrier is each Service's opinion that in-being Service qstems 

flfffill the requirement, They do not. 

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3. &other obstacle is the fact that this initiative has been interprstsd as 

requiring a centralized, DoD data base of contractor past perforuance. The Task 

Force disagrees with this interpretation and recommends that the solution be based 

on the individual system already being implemented by the Sepices, although 

modifications to these systems will be required. 

SPECIFIC ACTIONS TO ENSURE IMPLEMEIITATION AND IMPLEMENTATION SCIIEDULE: 

1. The Ad Hoc group (Army, Navy, Air Force and OSD) should define and describe by 

March 1, 1982 the requirements for methods of recording, documenting, and sharing 

contractor performance. These requirements should Liclude individual Service 

systems designed to specific criteria and coordinated by OSD. 

2. USDRE provide "For CoordL?qationn draft of DoDD 4105.62 to -the Services far 

review and comment by 1 April 1982. 

3. DepSecDef issue DODD 4105.62 by 1 July 1982. Emphasis Will be on past 

performance, schedule realism, and selection of contractor who appears to have 

highest probability of meeting requirements. Importance of louest proposed cost 

will be de-emphasized. 

4. Services revise implementing regulations: AZ'R 70-15, AR 715-6, and NAVMATINST 

4200.49 within 90 days of issue date of DODD 4105.62, thereby closing this action. 

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ACQUISITION TMPROVEMENT TaSZ FORCE 

fleport on Initiative No. 21. Title: Develop and Use Staiidard Operational and 

Support Systems 

Task Force Principals: Dr. R. D. Webster h VADM R. R. Monroe, US24 

ACTION REQUIBED BY DEPSECDEF MEMORANDUM OF APRIL 30: 

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Develop and use standard operational and support systems. More specifically, this 

means institutionalizing an effective mean% for the identification axad approval of 

candidate RDThE progfams which are ultimatePy produced and implemented as standard 

(cornon) hardware (e.g., subsystems, major components, and support systems) in 

major weapon systems. 


OSD developed a thee phase action plan. Phase 1 (Near Tem=--QSD select oil-going 

RDThE programs for standardization) has not yet resulted in substantial chvlges to 

Service standardization plans. Phase 2 (Mid Term--Services nominate cancij date 

RDT&E programs) has gotten a very positive response from the Joint Services Review 

Committee (JSRC) for 5 proposed tri-service avionics standardization programs. 

The JSRC efforts need additional "seed money" to get started. Nsn-avionics 

subsystems (support and test equipment, mechanical systems, etc.) have no 

organization comparable ta the JSRC, and consequently *are laggiq in 

implementation of this iriitiative. Phase 3 (Longer 'i'erm -- friprovements in 

policies, procedures, organizations) was- Initiated at the 3-5- Ecrverfnber 1981 DoD 

Standardization Seminar. An implementation plan was developed, cad a number of 

actions a ~ o underway. These actions will rsquire a year or mope to take full 

effect 

BARRIERS TO IMPLEMENTATION : 

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The most critical problem is advocacy within the weapon system comnninity. Mhen the 

Services and OSD establish priorities during the POM- cycle, the hardware and 

support systems standardization efforts evolve as very low priority programs and 

simply never get supported. Examples of this may be found in: (1) B-1 (whcrs the 

preferred avionics standards may not get Implemented); (2) the MATE program (where 

funds are being deferred by OSD); and (3) the five avionics standardization 

programs recommended by the JSRC (all with significant potential cost avoidance 

savings, but inadequate flmding). 

SFECIFIC ACTIONS M ENSURE IMPLEMENTATION AND IMPLEMENTATION SCHEDULE: 

1. Serious consideration must be given to the following possible actions: 

a. Continue to vigorously support the Recommendation 21 action plan. A meclo 

from USDRE should tell the Services to approve and find the five avionics 

standardization programs recommended by the JSRC (OUSDsE-oAsD(MRA&L)-JSRC meeting, 

4 Dec 81). This will give evidence that we support these aateriel standardization 

programs. 

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3. USXE, .XlX&L, and the Services should conveT?e a panel on support and test 

eauisment to review Service management approaches and RDThE efforts for 

devehpnent of standard support systems, and to develop a reconmended DoD program. 

c. USDRE should convene a meet- of the Defense Specifications and Standards 

3oard (DS.53) by 29 Jan 82 to address FY 82 Standardization Program Guidance. At 

this time, a JSRC for ground support equipment should be initiated. 

d. Seriously address the deficiencies in management, acquisition policy, 

standardization, organization and operational requireaent areas identified at the 

November DoD Standardization S e w . USDRE develop a Service coordination action 

plm to resolve every major issue. The Services should develop standardization 

program plans which should be phased and support the OSD action plan. 

e. USDRE and the Services should each designate advocates for each of the 

standardization areas, along with finding responsibilities. 

2. Because unanimity does not exist at this time on how to proceed, the Ad Hoc 

committee under the Steering Group should further examine this issue. 

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ACQUISITION IWROVEENT TASK FORCE 

Regort on Initiative No. 22. Title: Design to Cost Contract Incentives 

Task Force Principals: Mr. T. P. Christie h BG C. F. Drenz, USA 

ACTION XEQUIRED BY DEPSECDEF MEMORANDUM OF APRIL 30: 

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Dol) will “provide appropriate incentives to industry by associating fee award3 to 

actual costs achieved during the early production Dol) will Rimwe prsgram, 

managera and contracting officers develop contract term a d p~ocedwes to provide 

for the payment of Design to Csst (BTC) awards and incentives based OD “evidence 

during early production runa that Design to Cost goals are being achieved.” 

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ACCOMPLISHEENTS TD DATE: 

1. A Tri-Service/OSD group, meeting over a four month period, developed the 

necessary guidance to implement the DepSecDef decision, and initiated the revision 

of appropriate documezts. 

2. DSDRE issued interim guidance on 3 December 1981 to the SBrvIces, DCA, and DLA, 

outlining procedures for rewarding contractors who demonatrate that they have 

achieved DTC requirements and for penalizing those who do not. 

3- DoDD 5OOCL28, Design to Cost, has been revised to incorporate this guidance a h 

as mon as DoDD 5000.1 and DoDI 5000.2 have been. coordinated and misued, 

UoDD 5000.28 will also be coordinated and reissued. 

4. The Defense Acquisition Regulation (DAN is being revised accordirqly. 

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5. A Design to Cost Military Standard is in preparation. 

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6, The Joint Logistics Commanders DTC Guide is to be updated. 

BARRIER3 TO IMPLEMENTATION: 

Lack of issuance of DoOD 5000.1 and DoDI 5000.2. 

SPECIFIC ACTIONS TO ENSURE IMPLEMENTATION AND IMPLEMENTATTON SCHEBUEE: 

1. By March 30, 1982, USDRE issue revised DoDD 5000.28, Design to Cost, 

incorporating DTC contract incentives guidance. 

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2- By July 31, 1982, DAB council re~jise and reissue regulation on DTC contractual 

requireaents 

3. By Septeaber 30, 1982, Air Force prepare, coordinate and issue DTC Filitary 

Standard. 

4. By Deceaber 31, 

Commaders DTC Guide. 

1982, Air Force update, coordinate and issue Joint Logistics 

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ACQUISITION MPROVEHENT TASK FORCE 

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Report on Initiative No. 23. Title: Implementation of DoD Acquisition 

Improvement Program 

Task Force Principals: Mr. W. A. Long 

ACTION REQUIRED BY DEPSECDEF MEblORANDUM OF APRIL 38: 

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1. Assign overall responsibility to USDWE for mdtoring and follow-up of all 

decisions made in this report. 

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2. USDRE will assign a prime responsibility for action on every recommendation and 

decision in this report. Em general, these assignments have been specified under 

the “Action Required” sections; however, in certain cases specific action 

responsibilities will be defined in the immediate fitwe. 

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3. USDRE should consider utilizing a working group containing OSB and Servics 

representatives to assist in implementation. 

4. USDRE should consider utilizing a number of creative techniques to trulsbte 

the intent of these recomendations to all levels. This could include formal 

training sessions, conferences, videotaped tFaining films, articles, and policy 

letters. 

5. Both the SecDef and the DepSeeDef metst maintain a personal interest l.n ensiring 

that the changes ape implemented, that them is continuous action to improve the 

acquisition process, that periodic reviews take place, and that all Services and 

OSD staff be made aware of the SecDef priority interest on this subject. 


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1. The memorandum of April 30, 1981 assigned USDRE responsibility for follow-up 

and ensuriq implementation. During by 1981, USDRE assigned DUSD(AM1 as the 

principal action officer for the implementation effort. An Acquisition 

Improvement Ppogram Steering Group was assembled at the three-star (or equivalent) 

level representing the Services, MlSAhL, ASD(C), and PALE. Workbag teams we~e 

designated, responsibilities were assigned, and the Acquisition Improvement Effort 

Implementation ?la was approved. USDRE action offices were assigned fsr each 

program decision. 

2. The Acquisition Improvement Program Steering Group met regularly and provided 

a monthly statui report for the period May to September 1981 to DepSecDef on the 

implementation of each program decision. 

t 3. On November 17, 1981, the DepSecDef directed the Council on Integrity and 

Management Improvement to establish a Task Force on Acquisition Improvement. On 

November 19, 1981, the USDRE met with Task force members representing the Services 

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and OSD. Upon approval of the Task Force Final Report, the Steering Group will 

assume responsibility for assessing progress and ensuring implementation. 

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4. Nunerdus brisfirss, speeches, articles, testimony, and official actions have 

occurred in order to sive the program the widest possible dissemination. Briefings 

have been provided to the Investigation Subcommittee of the USC, and to GAO and 

BFP? senior officials. Major industrial associations, such as NSIA, ADPA, AIAA, 

have been brisfed. Other organizations including the National Insticute for 

~Maxiagement Research and the National Contract Management Association have also 

received presentations. Many psime and subc8nts;rctors have received the word 

through these conferences as well as through a special conference recently hs1.d in 

Pittsburgh. Articles have appeared in Goverment Executive, Defense 81, and 

Concepts magazine3 On the Acquisition Improvement Program. Sections on the pmgram 

are also included in this year's SecDef and USBRE Posture Staterumts. 

Congressional. testimony on the subject h u been heard by vaxdous au&comni.'dteas of 

the W C , the KBC, and the Senate and House Committees on Governmental Affaim. 

5. The "word" has been promulgated to members of the Services thseugh official 

channels, as well as through briefings, and educational progkams. The new 

management principles have been incorporated into the course work offered by the 

Defense Systems Management College. The College has also prepared a briefiisg on 

the Acquisition Improvement Program which has been provided ELL numerous arj Ij.tary 

commands. 


None. 

SPECIFIC ACTIONS TO ENSURE LVLENZNTATION AND IMPLEblENTATIQN SCEZ)W,E: 

See Task Force Final Report cover letter secommendationu, -and the YpeaifLc 

recommendations throughout this report. 

23-2


Report on Initiative No. 24. Title: Decision Milestones 

Task Force Principals: VADM R. R. Monroe, USN h Dr. R. D. Webster 

ACTION REQUIRED BY DEPSECDEF MEMO OF 30 APRIL: 

RUSDBE revise DoBD 5080.f/BoBI 5000.2 

ACCOMPLISHMENTS "0 DATE, 

A draft of DoDD 5000.1 was circulated 

received by USDRE and consolidation of 

5000.2 is being prepared in USDRE for 

BARRIERS M PlPLEMEXTATION. 

appropriate to alternatives selected, 

on 22 September. All cements have nou been 

comments is now in process. 1 draft of DoDI 

coordination. 

This initiative has been difficult to implement because the 30 April decision paper 

contained none of the in-depth structuring and integration necessaq to 

incorporate the decision into the complex acquisition process. particular , 

three aspects have been difficult to define: (a> The relationship betxeen theze 

new DSARC decision points and the actual program milestones (e.&, the start of 

f'ull-scale development) ; (b) the relationship between these new MARC decision 

points and the Service decision points in a major program; and (c) ,&he re&tionship 

between the new D.SARC decision points and the Scmiea decision points in 

' less-than-ma jor programs. 

SPECIXC ACTIONS TO DSURE IMPLEMENTATION AlJD IMBLEMENTATIQN SCZT)IlT,E : 

1. Recent Action: Essential agreement was reached on all ma jcr outstanding 5000.1 

issues at M OSD/Tri-Service meeting on 4 December. USDRE has circulated revised 

pages 5-7 of DoD Directive 5800.1, putting these agreements into words, for review 

by Service representatives. A final draft of these key pages 'should be agreed to 

within a feu days. 

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2. Future Action: To ensure timely resolution of any rwiniqg issues in 5000.1, 

and to expedite processing of 5000.2, it is essential that we engage high-level 

decision-makers in in-depth resolution of the different views. A small, high-level 

group (4 OF 5 individuals, generally at the three-star or DUSD/DUD level)--one 

from each Service and one or two from Om, each with broad authority to spe& fos 

his organization-will engage in a series of meetings to resolve issues, The group 

members themselves vi11 get involved in the actual drafting of language on the 

difficult points. Meetings will be held at least once a week to allow rapid 

resolution while still permitting expedited internal revieu within parent 

organizations bet;leen meetings. DoDD 5000.1. should require only a single meeting 

before issuance. 

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Report on Initiative No. 25. Title: Mission Element Need Statement (MENS) 

in the PCIM 

Task Force Principals: 

LTG 3. H, Merryman, USA h J. W. Helchner 

ACTION REQUIRED BY DEPSECDEF l4WORZLNDUM OF APRIL 30: 

USBRE revise DoDD 5000.1 and DoDI 5000.2 to require submission of a MENS 

(shortened or as currently required) no later than Service POM, thus linking the 

acquisition and TPBS processes. SecBef approval of MENS would be by aeceptiag 

FsM in absence of specific disapproval. 

ACCOMPLISHMENT TO DATE: 

7 

BoDD 5000.1 has been revised and will be published by December 31, 1981. 

2. DoDI 5000.2 Draft No. 4 is beirq prepared. This revision will require a 

Justification for Major System New Start (JMSHS) in lieu of a MENS which must be 

submitted not later than the POM submission. 

3. Services have initiated the following actions: 

a, Amy, Navy and. Ah- Force are. conciirrently .preparing implementj.Li! 

regulations 

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b. Army is changing title and 'reducing content of three MEBS in process. A 

draft Letter of Instruction (LO11 for JMSNS is being prepared. AR 71-9 is being 

revised. Awaiting final format in WDI 5000.2. 

6. Navy has replaced MEXS with JMSNS. Awziting final format.in DODI 5000,2. 

d. Air Force issued preliminary guidance on process in August 1981. 

Progress on DoD directive being monitored. Draft revision of AFR 57-1 expected 

to be issued by March 1982. 


1. DoDI 5000.2 is needed for Service implementation. 

2. A barrier to linking the PPBS and DSARC processes may have existed in POM 83; 

however this barrier is considered by OSD to have been corrected by follow on 

actions currently in process, under the DRWPOM review process and development of 

the BG for POM 84 (see Initiatives 1 and 29). POM 83 did not include 

identification of any major system new starts. Several ENS had been submitted 

to OSD for review in accordance with the March 1980 DODI'5000.2. 

3. OSD staff reviewed POM 83 and identified potential new starts. USDE 

requested additional information on these. Based on Service rezponses, a list of 

25- 1

new starts was detenined and an issue paper was prepared for the DRB. The DRB 

reviewed the new starts for POM 83 and a memo for the Service Secretaries has 

been prepared to document the DRB decision on new starts. 

4, The process used in ?OM 83 'has wmked and is now being described in the 

revised DODI 5000.2. Therefore, although there may have been a barrier to 

implementation in the POM 83 review due to an absence of new starts 

identification, both the Defense Guidance and the revised DBDI 5000.2 wiff be 

available to the Services to clarify requirements for POM 84. 

SPECIFIC ACTIONS TO ENSURE IMPLEbIENTATION AlXl -ATION 

SCHEDULE: 

1 Issue DsDI 5000.2, USDRE by March 1, 1982. 

2. In tfie DG for POM 84, establish a precise definition for a major spsten new 

start which should be accompanied by a JMSNS, DPAhE by January 31, 1982, 

3. Services must clearly identify major systeeb new starts in their ?OM 84 

submissions in May 1982 to be accompanied by JMsNSs. The related JMSNSs should 

be submitted to the DAE as early as possible t4 facilitate the 'POH review, 

however, they are not required before the POM sumbissfon. 

4. Establish format of JMSNS as being identical to that requested by USDRE in 

his letter of 9 July 1981 on justification of major system new starts. 

25-2

AC2UESITION MPROVEMENT TASK FORCE 

Report on Initiative No. 26. 

Title: DSARC Membership 

Task Force Principals: Mr. W. A. Long 

ACTION REQUIRED BY DEPSECDEF MEMOElANDBM OF APRIL 30: 

Appropsiate Service Secretary or Service Chief be included as f’Ul1 meaber of the 

DSARC P 

ACCOMFLISHMENTS TO DATE: 

Implemented as of April 30, 1981, in each DSARC level meethg. 

BARRIEXES M IMPLEMENTATION: 

None. 

SPECIFIC ACTIONS TO ENSURE IMPLEMENTATION AND IMPLEMENTATION SCEDULE: 

None. 

This initiative requires no further review. 

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ACQUISITION MPROVFMENT TASK FORCE 

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Report on Initiative No. 27. Title: Acquisition Executive 

TMk Force P rincipals: 

Mr. W. A. Long 

ACTION REQUIRED BY DEPSXCDEF MEMORANDUM OF APXL 30: 

Retain USDRE as Defense Acquisition Executive. 

ACCOMPLISHMEXTS TO DATE: 

hpfemented as of April 30, 1981, in eachbSARC level meeting. 

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BARRIERS TO IMPLEMENTATION : None. 

SPECXFIC ACTIONS TO ENSURE IMPLEXENTATION AND IMPLEMENTATIQN S m a X : 

None. This initiative requires no further review. 

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ACQUISITION IMPROVMENT TASX FORCE 

Report on Initiative No. 28. Title: What Should be %e Criterion for Systems 

Reviewed by DSARC 

Task Force Principals: VADM R. R. Monroe, USN h Dr. R. D. Webster 

ACTION REQUIRED BY DEPSECDEF MEMO~W OF APRIL 30: 

"USDRE revise BoDD SOOO.l/DoDI 5000.2." 

ACCCIMPLISHMENTS TO DATE: 

1. Draft revisions of DoDD 5000.1 and DoDI 5000.2 include the new threshold. 

2. Services are changing their Instructions to be compatible with the new 

DoDD 5000.9/DoD5 5000.2. 

3. USDRE memo of 10 Jun 1981, "Withdrawal of Major System Designation," delegated 

ten msbjor systems now to be th@ responsibility of the Services. 

BARRIEIZS TO IMPLEMENTATION: 

None. 

RECOMMENDED ACTIONS To ENSURE IMPLEMENTATION AND IMPLEHE."PATION SCBEDULE: 

In addition to the changes made to date, one procedural implrovement shou.?ci be 

incorporated. DoDD 5000.1/DoDI 5000.2 should contain specific referenee to the 

fact that, prior tg SecDeE's designating a system as-mjor, .a Se?vice--USDRE 

dialogue should develop the pros and cons, ete. , of such designation. 

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Report on Initiative No. 29. Title: How Should the DSARC/PPSS Decision 

Be Integrated? 


MF. J. E, Williams, and Mr. J. T. Kammerer 

ACTION REQUIRED BY DEPSECDEF MEMORgblDUM OF URXL 30: 

Programs reviewed by DSARC will assure their affordability by demonatrating that 

resources are programmed in the FYDP and EPA to execute the program a3 

recommended. DSARC review should certify program ready te proceed to the next 

acquisition stage. 


1. DoDD 5000.1 and DoDI 5000.2, dated March 19, 1980, contain policies on 

affcrdabiLity which state that a program should not be approved at a DSmC 

milestone to pass into the next phase unless sufficient funding is contained in 

the FYDP and EPA to execute the program - - as recommended, or unless the Service can 

identify sufficient sources of additional funds to adequately budget the 

program. Decision Coordinating Papers prepared for DSAXCs new contain a resource 

=ex w&i& illustrates the funding required for the recommended courae of action 

compared. to the funding contained in the FYDP and Egg. Affordabfiity issues ;re 

therefore brought to the atteiition of the DSARC. 

2, i.lilcs%une and the M3XS psocess areaeing integrated bhr. thz YPBS, m d 

the SesM-ces maintain..they have in the past and are corntiming to Ilktilnge 

investaent in new starts in a mer which is accountable to decisions vh.ir;h 

alter funding-la mafor systems. Actually, too few DSABCs have been held 'sface 

April to demonstrate whether a significant improvement in this ; direction has 

occurred. 

3. USDRE is concerned over the attention given to reviewing nw.sstari;s to date 

and has gotten DRB approval to extend this effort to the ongoing budget revict?. 

4. The Amy believes there is confusion and conflict over what. defines a I~BW 

start. The development and production of a new system is a continuous process 

which ties together virtually all facets of the Army. The PPBS and DSARC precess 

are snap shots either of the whole investment at a given time or of one system 

from that investment listing. A number of different sets of rules must dovetail, 

and not infrequently the dominant set of rules places one or another system Li a 

category which does not accurately represent the system(s1. One example of such 

a misfit is the disagreement which occurs over whether or not; a requirement.s 

document is required or should have been completed. 

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Note: The subjects of DSARC and PPBS are very broad and covered by a number 

of specific initiatives. This section of the report covers only those matters 

pertaining to new starts and the funding of programs at the time of DSARCs 2nd 

program reviews. 

29- 1 

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5. Navy asroes wit3 Amy that a serious definitional problem exists over what is 

a new star$. In particular, if a potential new program is fmded in the 

outyears, without budget; year funding, they propose that it not be considered a 

new start at that time. 

BARRIE43S TO IMPLEHEbpTATION : 

1. The principal barrier to implementation is the frequent seed to provide 

additional funding (above the FYDP and EPA) to pssperly execute the prcgam when 

it passes into the next phase. DSARC meetings are sometimes held with the 

subject program not being adequately funded in the FYDP and EPA. 

2. The biggest barrier to implementation rdns the differences between OSB 

and the Services OR the definition of new starts, particularly in the case of 

cutyear progr;uns 

SPECIFIC ACTIONS TO ENSURE IMPLEMENTATION AND IMPLEMENTATION SCHEDULE: 

1. DSARCa and Program Reviews will not be held unless the programs are fully 

funded irn the FYDP and the EPA, and, if cost growth has occurred, the issuance of 

additional funds is identified. 

2. The USDRE and the Military Department Acquisition Assistant Secretaries 

should resolve all new start definitional and procedurai problem by 

29 January 1981. 

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Program Pmager Control Over Logistics and 

Support Resources 

Task Force Principals: Dr. R. D. Webster & YBDM R. R. Monroe, USN 

ACTION REQUIRED BY DEPSECDEF MPfORANBUM OF APRIL 30: 

The decision was to "have Services submit, with the POM, auppost resource 

requirements and readiness objectives by weapon system, for systems entering OP in 

early production. Direct OSD to have a single review sf support associated with 

individual systems." It also required the Services to develop procedures that 

would "give the Program Manager a voice in the support reaowce allocation and 

budget execution process through increased and centralized resourbe visibility and 

coordination by the PM on changes to his plans." Action requfsed uas "ASD(MRA&L) 

letter to Services stating objectives. ASD(MRA&L) work with the Services to define 

and evaluate implementing options. Initial letter can be prepared within 30 days." 

This initiative is a cornerstone in the implementation of the management prinQjles 

(Init-Sative No. 11 on improving readiness and delegating authority. 


1. Bn ASD( C 1 IMRALL memo was signed June 1, 198 I, requiring: 

a. The Services to develop procedures gfvh Me program iilirilager bctter ' 

vizibflity of weapon system support resources in POM and, budget pseparatioi, :ad a 

greater voice i~ budget execution; and 

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b. OSD and the Services to develop procedures for PPBS reviews of se?.t!r.ted 

weapons so- that support resource decisions are made in.a marc .Wegrated miier, 

with visibility of the effects on weapon system. support schedules and read.i.ness 

objectives. 

2. h OSD/Service Steering Group and working group have been estabLisha2 to 

oversee implementation. Each Service has briefed its plans for substantial changes 

in internal PPBS procedures to improve the visibility of weapon system support 

resources. The Army and Navy have shown preliminary results. Expanded application 

of the new Service procedures is planned in POM 84 development. 

3. The joint uorking group developed procedures for a trial FY 83 OSD budget 

review of support for six weapon systems. The trial is proceeding on 4 of the 6 

(Mol tank, AAH, F-18, and AEGIS). The ability to track a significant nmlw of 

weapon system support elements and to identif'y shortfalls has already been 

demonstrated. A schedule has been established for OSD and the Services to evaluate 

the results of the trial budget review by March 1982,.and to develop criteria and 

procedures for a trial OSD POM review of support resources for selected system. 

LMI has been tasked to assist in the effort. 

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3ARRIZRS TO MPLBENTATION: 

1. Misinterpretation of the intent of this initiative has been a barrier. The 

title of the initiative should be changed to more clearly raflect the decision. 

(The recommendation is "Managemerrt of Initial Support Funding for Major Systems"). 

It is intended that PM's be given increased coordination, but not necessarily 

direct control, over support resources. It ia also intended that the Services 

retain the flexibility to apply support resources where they are determined to be 

most needed in the execution phase, but ta keep the PM Faformed and involved in the 

proeasrs. 

2. Service concerns over the potential for OSD ovss-management have also Been 

barriers to implementation. The decision is clear in requirfng improved visibility 

of weapon system support resources and readiness objectives in PPBS reviews. To 

mnove the barrier, it is important that the visibility and review process be 

structured to support the intent of achieving advocacy and support of resources 

needed to meet readiness objectives, rather than for fine tuning. 

3. A fgw of the f'unding categories that affect weapon system maport are not 

easily identifiable or allocatable to specific weapon system, and yet may hawe a 

Sarge effect on system readiness (e.g., %omon spares"). The on-going trial 

-budget review will provide a better perspective on whether further changes h OSD 

and Service accounting procedures should be considered. 

SPECIFIC ACTIONS TO ENSURE IMPLEMENTATION AND PIPLEMENTATION SCXEDULE: 

The plan originally approved by the Joint Steering Group, to implement chaiqas to 

Service and OSD PPBS procedures and Service budget execution ,mocedures within a * 

'year, should be pursued to completion. Specifically: 

a* The current trial budget review should be completed and evaluated as 

planned. MRAgL, with assistance from the Initiative 30 Steering Group and JJK, 

should produce an evalaation report by early March, 1982. 

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b. MRAdL and the Services should, by late March, develop implementing optj.ons 

for program review procedures based on review of Service internal plans and rcsults 

of the trial budget review. A3D(MRA&L) and ASD(C) should forward trial program 

review procedures to the Services by mid-April, 1982, for use in the trial review. 

c. The Services should, by April 1982, present to the Joint Steering Gieoup 

their proposed internal procedures for increased PM involvement in budget: 

execution. Service budget execution procedures should be implemented on a trial 

basis by June 1982. 

d. MRAhL, with assistance from the Joint Steering Group and LMI, should 

evalute the results of the trial review and recommend procedures for long term 

implementation by September 1982. 

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ACQUISITICN IMPROVEMENT TASK FORCE 

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Report on Initiative No. 31. Title: Improve Reliability and Support 

Included in discussion of Initiative No. 9: 

lmprove Support and Readiness 

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ACQUISITION PiPROVEMENT TASK FORCE 


Increase Competition 

Acquisition Process 

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Task Force Principals: BG C. P. Drenz, USA h Mr. T. P. Christie 

AGTZQN REQUIRED BY DEPSECIIEF MEMORANDUM OF APRIL 30: 

1. This initiative MS added to DepSecDef April 30 memorandum by a subsequent 

memorandum of July 27. 

2. The memorandum required action to direct acquisition managmnent organizations 

to establish management objectives that would enhance competition. 


1. The Military Services and Defense Agencies responded in positive fashion to 

DepSecDef 27 July memorandum. 

2. Based on objectives submitted, on 70 November 1981 OUSDRE issued a second 

memorandum to the Military Services and Defense Agencies which tasked theu to: 

a. Designate advocates for competition at each procwing act:!.vity; 

b. Establish goals for. ,increasJ.ug codpctitSon; 

c. Ensure commanders 

csmpeti tien; 

landerstand 

their resQoasibiUAdet3 k?i th rc,yrd to 

d. Make competition a 

e. Develop procedures 

matter of special interest; and 

to identify and elevate significaat achievement.?. 

Reports on plans to implement are due to USDRE in January 1982. 

3. USBRE has engaged Logistics Management Institute (M) to- conduct a study to 

detarmine those comodities/programs offering the greatest opportunity for 

increased competition and those comodities/programs offering little or no 

opportunities for increased competition (e.g., nuclear aircraft carriers). The 

target date for completion of the study is 30 June 1982. 

4. At the direction of DUSD(AM), DAR coverage for '&e Spare Pets Brezkout. Program 

is being developed by an ad hoc committee chaired by the Army.

,- 

I 

f 

3AiiRIZBS TO IXPLZMENTATION : 

1. ICsntification of those commoditiedprogsams offering the greatest potentizl 

for increased competition as compared to those commodities/programs offering 

little or no realistic opportunities for increased competition (e.g., prime 

contracts for nuclsar aircraft carriers). * Recent program reviews have 

demonstrated that there are extra near ten! costs associated with additional 

contractors in a hardware phase "fly offn when the program more appropriately lends 

itself to a less expensive competitive approach. 

C 

2 Military Sesvice/Def ense Ageacy commitment of adequate resources to develop 

additional qualified sources for supplies and services. 

C 

3. Perception in some segments of private industry and the DoB technical community 

that this initiative may result in competing contracts without properly weighing 

the risk to successful program completion, 

RECOMMENDED ACTIONS TU ENSURE WLEXENTATION AND IMPLEMENTATION SCZDULE: 

1. By 10 'January 1982, Military Semices/Defense Agencies provide OUSBE plrns to 

comply with direction contained in USDRE 10 November mexorandum. 

2. DUSD(M) in January review Military Service and Defense Agency plans for 

implementation of USDRE 10 November memorandum to ensure compliance with intent. 

€ 

t 

c 

c 

3. DUSD(AM) follow-up with Military Services.and Defense Agencies in June 1982 to 

ensure plans submitted have been implemented. 

4. ,DaSL)(AM) consider program to phcc special. emphasis oii those 

comodAtjes/clfivgrams, idantified by LMI as offering the greatest opportuniiy for 

increased competition. 

5. DUSDCAM) consider feasibility of increasing the extent .of competition in 

subcontracting. 

6. DUSD(AM), concurrent.. with review discussed in 2 above, revisw Ulitary 

Service/Defense Agency implementation of plans to meet objectives they estabiished 

in responses to DepSecDef 27 July memorandum. 

7. DUSD(AM), based on results of LMI study, detesrnine where development of 

additional sources is cost-effective. 

8. DUSD(AM) consider developing policy that will enable BOD to emphasize the 

benefits of expanded competition based on factors other than price, e.g., total 

cost of ownership, best value to the Government over the life cycle, technical 

factors, delivery, etc. 

t 

t 

32-2

CONTENTS 

SECTION 

A 

TITLE 

The Acquisition Process 

--DODD 5Q00.1 (bcluding OMB Circular A-109) 

--DODI 5000.2 

The Planning, Programming and Budgeting System 

--DODI 7045.7 

The Defense Acquisition Improvement Program 

(Carlucci Iniatives) 

--Deputy Secretary of Defense Frank C. Carhicci's 

April 30, 1981 memorandum 

--DOD Implementation Plan 

D 

Test and Evaluation 

--DODD 5000.3 

E 

Integrated Logistics Support 

--DODD 5000.39 

F 

Reliability, Maintainability 

--DODD 5000.40 

G 

Civil Acquisitions 

--April 1981 paper on Civil Acquisition and 

cover memorandum 

H 

MhSAD 

--Organization Chart 

--Program Plan 

I 

Xatrix of Government Publications 

XYZ 

Bibliography

April 5, 1376 CIRCULAR NO. A-109 

TO T%E gEADS OF EICECUTIVE DEP-S 

SUBJECT: 

Major System Acquisition8 

AND ESTAI3LfSEMENTS 

This Ckcular establishes policies, to be 

kll%%i executive branch agencies in the acquisition of 

major syrtems. 

2. Back round. The acquisition of major systems by the 

Federa A m e n t constitutes one of the most crucial and 

expensive activities performed to meet national needs. Its 

impact is critics2 on technology, on the Nation's econdc 

and fiscal policies, and on the accanplisbent of Gov-en+ 

agency missions in such fields as defense, epace, energy and 

tzansportation. For a number of years, there has been deep 

concern. over the effectiveness of the mazragemeni of major 

aystcm acquisitions, The report of ,%he Chmmi-ssioa on 

Government Procurement reconuaendcd basic changes to bprovc 

the process of acquiring major systems. This Circular is 

based on qxecutive branch Ceasidcration of the cosIIIDi88~oxa'8 

r8C0mendatiOAS 

3. Responsibility. Each agency head has the responribilfty 

to ensure that the provisions of this Circular are followed. 

This Circular provides administrative direction to haads of 

agenries and does not establish and shall not be constmed 

to create any substantive or procedural basis for any person 

to challenge any agency action or inaction on the basis that 

8uch action was not in accordance w ith this Circrubr. 

' 1. Coverage. This Circular covers and applies to: 

u. Management of the acquisition of major systems, 

including: Analysis of agency missions Betemination of 

mission needs O Setting of program objectives 

Determination of system requirements O System program 

planriing O Budgeting O Funding O Research Engineering 

Development Testing and evaluation * Contracting 

Production * Program and management cantrol O Introduction 

(NO. A-109) 

'

2 

. 

of the system into use or otherwise successful achievement 

of program objectives. 

b. All programs for the acqui~ition of major systems 

even though: 

(1) The system is one-of-a-kind, 

(2) The agency's involvement in the uystm fs 

limited to the development of demonstration hardware for 

optional use by the private 8ector rather than for the 

agency's own use. 

5. Definitions. As used in this Circular: 

a. Executive ?geney (hereinafter referred to as agency) 

means an executAve department, and an independent 

establishment within the meaning of sections 101 and 104(1), 

respectively, of Title 5, United States Code. 

component means a major orgarrizatiunal 

subdiviston AT 

o an agency. For example: The Army, Navy, Air 

Force, and Defense Supply Agency are agency components of 

the Department of Defense. The Federal Aviation 

Administration, Wrban Mass Transportation Administration, 

a d the Federal Highway Administration are agency components 

of the Department of Transportation. 

c. Aqency missions means those responsibilities for 

meeting national needs assigned to a specific agency. 

d. Mission need means a 

agency ' s overaIlpurpose, 

considerations. 

required capability within an 

including cost and schedule . 

e. Program objectives means the capability, cost and 

schedule goals baing sought by the system acquisition 

program in response to a mission need. 

f. Program mean$ an organized set of activities 

directed toward a camon purpose, objective, or goal 

undertaken or proposed by an agency in order to carry out 

responsibilities assigned to it. 

g. S stem design concept means an idea expressed in 

terms general performance, capabilities., and 

characteristics of hardware and software oriented either to 

(No. A-109)

Mar 19, 80 

fOOO.l (End 2) 

3 

.- 

. 

operata or to be oparatad a8 M integrated whole in meeting 

a mfr~ion need. 

h. ~a or I stem meam that combination of elmexits that 

will functaon toge er to produce the capabilfths required . 

to fulfill a mission need. The elements may include, for 

example, hardware, equipment, software, construction, or 

other inprovemeats zeal property. Major ayatem 

acquisition programs are those programs that (I) are 

directed at and critical to fulfilling an agency mission, 

(2) cntaia the allocation of relatively large resources, and 

(3) warrant special managemeat attention. Additional 

criteria and relative doll= thzesholds for the 

determination of agency programs to be considered major 

rrystu~s under the purview of this Circular, may be 

established at the discretion of the agency heed. 

i. S stem ac isition process means the sequace of 

acquisitAon starttncr - fram the . agency's 

reconeiliation of its mission needs, with its capabilities, 

priorities and resources, and extending through the 

izrtroduction ~f a system into opezationai use or the 

otherwise successful achievemht of program objectives. 

- 

j. Life circle cost means the sum total of the direct, 

bdirect?ecurranq , nonrecurring , and other related cdsfs 

incurred, or estimated to be incurred, in the design, 

developnent, production, operation, maintenance aad support 

of a major system over its anticipated useful life span. 

6. General policy. The policies of this Circular are 

d e s i m o assure the effectiveness and efficiency of the 

precess of acquiring majot systems. They are based oa the 

general policy that Fedezal agencies, when acquiring major 

6ySteXiS, Will: 

a. Express needs and program objectives in mission 

terms and not equipment terms to encourage innovation and 

competition in creating, exploring, and developing 

alternative system design concepts. 

b. Place emphasirr on the initial activities of the 

system acquisition process to allow competitive exploration 

Qf alternative system design concepts in response to mission 

needs . 

(NO. A-109)

4 

c. Communicate with Congress early in the system 

acquisition process by relating major system acquisitim 

programs to agency mission needs. This communication should 

follow the requirements of Office of Management and Budget 

(Om) Circular No. A-10 concerning information related to 

budget estimates Md related materials. 

d: Establish clear lines of authority, rcsponsibflity, 

and accountability for managanent of major: systew 

8Cq~iSitiOn programs. Utilize appropriate managerial bevels 

in decisionmaking, and obtain agency head approval at key 

decision points in the evolution of each acquisition 

program. 

e. Designate a focal point responsible for integrating 

and unifying the system acquisition managenent process and 

monitoring policy 'implementation. 

f. Rely on private industry in accordance with the 

policy established by OM3 Circular No. A-76. 

+- 

7. Major s stem acquisition manaqement objectives. Each 

agency acqu ring mrrjor systems should: 

a. Ensure that each major system: Fulfills a mission 

need. 

Operates effectively in its intended environment. 

Demonstrates a level of performance and reliability that 

justifies the allocation of the Nation's limited reseurces 

for its acquisition and ownership. 

b . Depend on, whenever econom&cally beneficial , 

competition between similar or differing system design 

cozcepts throughout the entire acquisition process. 

C. Ensure appropriate trade-off among investment coStS, 

ownership costs, schedules, and performance characteristics. 

d. Provide strong checks and balances by ensuring 

adequate system test and evaluation. Conduct such tests a d 

evaluation independent, where practicable, of developer and 

user . 

e. Accomplish system acquisition planning, built on 

analysis of agency missions, which implies appropriate 

resource allocation resulting from clear articulation of 

agency mission needs. 

'\ 

(NO. A-109)

c 

. . 

Har 19, 80 

5000.1 (hcl 2) 

5 

. -- 

f. Tailor an acquisition stzategy for each program, as 

aoon as the agency decides to solicit alternative eystem 

design concepts, that could lead to the acquisition of a new 

major system and refine the strategy as the program proceed8 

through the acquisition process. Encompass test and 

evaluation crateria and burrinerrs management considerations 

fn the strategy, The strategy could typically hclude: 

Pie of the contracting process as an fmportant tool in the 

acquisition program O Scheduling'of essential elements of 

the acquisition process Demonstration, test, and 

evaluation criteria * Content of Bolicitations for proposals 

DeCaoion8 on whom *to aolicit Methods 'for obtaining and 

suatainhg campetition Guidelines for the evaluation and 

acceptance 01 rejection of proposals O Geals for design-tocost 

O Methods for projecting life cycle costs Use of data 

rights ase of warranties Methods for analyzing and 

evaluating contractor aad Government risks O Need for 

developing contractor incentives * Selection of the type of 

contract best suited for each stage in the. acquisition 

process Adzainistration of contracts. 

g. Maintain a capability to: Predict, review, assess, 

negotiate and monitor costs for system development, 

engineering, design, demonstration, test, production, 

operation arrd support (i*e*, life cycle costs) Assess 

acquisition Cost, schedule and performance experience 

against predictions, and provide such assessments for 

consideration by the agency head at key decision poiats 

W e new assessments where significant costs, schedule or 

performcnce variances occur Estimate life cycle costs 

during system design concept evaluation and selection, fullscale 

development, facility conversion, and production, to 

ensure appropriate tr8de-Off8 among investment costs, 

ownership costs, schedules, and performance * Use 

independent cost estimates, where fetsible, for camparison 

purposes. 

8. Managment structure. 

a. The head of each agency that acquires major systems 

will designate an acquisition executive to integrate and 

unify the managentent process for the agency's major system 

acquisitioas and to monitor implementation of the policies 

and practices set forth in this Circular. 

b. Each agency that acquires-or is responsible for 

activiticr leading to the acquisition of--major systems will 

(NO. A-109)

6 

establish slear lines of authority, responsibility , and 

accountability for management of its =jar ryrtm 

aequisition programs . 

c. Each agency should preclude management layering and 

' placing nonessential reporting procedures and paperwork requirements 

on prograrn managers and contractors. 

d. A program manager will be designated for each of the 

agency's mjor system acquisition programs, This 

designation should be made wSen a decision is made to 

fulfill a mission need by pursuing alternative syetm design 

concepts. St is essential that the program manager have an 

understanding of user needs and cons'saints, familiarity 

with development principles, and requisite management skills 

and. experience. Ideally, managemerit skills and GxperienCt a 

would inclade: O Research and development O Opezations 

Engineering * Construction O Testing O Contrscting 

Prototyping and fabrication of complex systems * Production 

O Business O Budgeting O Finance. With satisfactory 

perfo-rxLkiJce, %\e tenure of the program manager should be 

long enough to provide continuity and personal 

accountability. 

e. Upon ifsignation, the program manager should be 

given budget guidance and a written charter of his 

authority, responsibility, and accountability for 

accomplishing approved program objectives. 

* f. Agency technical managanent and Gootznment 

laboratories should be considered far participation 

agency mission analysis, evaluation of alternative system 

design concepts, and support of all development, test, and 

evaluation efforts. 

g. Agencies are encouragek to work with each other to 

foster technology transfer, prevent unwarranted duplication 

of technological efforts, reduce system costs, promote 

standardization, and help create and maintain a competitive 

environment for an acquisition. 

-+ 

9. Ke decisions. Technical and program decisions normally 

will e made at the level of the agency component or 

operating activity. However, the foll&wing - four key 

decision points should be retained and made by the agency 

head : 

(NO. A-109)

tiar 19, 80 

5000.1 (End 217 

a. Identification and definition of a specific mission 

need to be fulfilled, the relative priority assigned within 

the agency, and the general magnitude of resources that may 

be invested. 

b. Selection of competitive system design concepts to 

be advanced to a test/demonstration phase or authorization 

to proceed with the development of a noncompetitive (single 

concept) system. 

c. Commitlhent of a rrystem to full-scale development and 

limited production. ' 

d. Cormnftment of a system to full production. 

- - 

a. Determination of mission need should be based on an 

10. Determination of miBsion needs. 

analysis of an agency's mission reconciled with overall 

capabilities, priorities and resources. When analysis of an 

agency's mission shows that a need for a new major system 

exists, such a need should not be defined in equipment 

terms, but should be defined' in terms of the mission, 

purpose, capability, agency components involved, schedule 

and cost objectives, and operating constraints. A mission 

need may result from a deficiency in existing -agency 

capabilities or the decision to establish new capabilities 

kr response to a technologically feasible opportunity. 

Mission needs are independent of any particular system of 

technological solution. 

b. Where an agency has more than one component 

involved, the agency will assign. the roles and 

responsibilities of each component at the the of the first 

key decision. The agency may pennit two or more agency 

coinponents to sponsor competitive system design concepts in 

order to foster innovation and competition. 

c. Agencies should, as required to satisfy mission 

responsibilities, contribute to the technology base, 

effectively utilizing both the private sector and Government 

laboratories and in-house technicalt centers, by conducting, 

supporting, or sponsoring: Research System design 

concept studies Proof of concept. work Exploratory 

subsystem development Tests and evaluations. Applied 

technology efforts oriented to system developments should be 

perfomad in responre to approved mission needs. 

(No. A-109) 

L 

8

. 

11. Alternative syste!s. 

I a. Alternative system desiyrl concepts will be explored 

within the context cf the agenq'o mission need and program 

objectives-with emphasis on geRerating innovation and 

conceptual competition from industry. Benefits to be 

derived should be optimized by competitive exploration of 

alternative system design concepts, and trade-offs of 

capability, schedule, and cost. Care should be exercised 

during the initial steps of the acquisition process not to 

corrfom mission needs or program objectives to any known 

systems or products that might foreclose consideration of 

alternatives. 

B. Alternative system design concepts will be solicited 

from a broad base of qualified firms'. In order to achieve 

the most preferred system solution, -hasis will be placed 

on innovation and cornpetifion. To this end, participation 

of muller and newer businesses should be encouraged. 

Concepts will be primarily solicited from private industry; 

and when beneficial to the Government, foreign technologyt 

and equipment may be considered. 

c. Federal laboratbfies, federally funded research and - 

development centers, educational institutions, and other 

not-for-profit organizations may also be considered a8 a 

sources for competitive system design concepts. Ideas, 

concepts, or technology, Ceveloped by Government 

laboratories or at Govemnmt expense., nay be made available 

to private industry through ';he procurement process or - 

through other established prccedures. Industry proposals 

may be made on the basis of '-,iese ifisas, concepts, and 

technology or on the basis a2 feasible alternatives which 

the proposer considers superior. 

d. Research an2 development eZforts should emphasize 

early competitive expioration 05 alteznativ%s, as relatively 

inexpensive insurazce against premat-se or preordained 

choice of a system that may prove to be efther mre costly 

or less effective. 

e. Requests for alternative system design concept 

proposals will explain the mission need, schedule, cost, 

capability objectives, and operating constraints. Each 

offeror will be free to propose hi5 awn technical approach, 

=in design features, subsystezts, aad alternatives to 

schedule, cost, and capability groals.. In the conceptual and 

(No. A-109)

Mar 19, 80 

5000.1 (End 2) 

9 

c 

less than full-scale development stages, contractors should 

not be restricted by detailed Government specafieations and 

standards. 

f. Selections from competing system design concept 

proposals will be based on 8 review by a team of experts, 

preferably from inside and outside the responsible component 

development organization. Such a review will consider: (1) 

fropo8ad system functional and performance capabilities to 

meet mission needs and program objectives, including 

resources required and benefits to be derived by trade-offs, 

where feasible, among technical perfomance, acquisition 

costs, ownership costs, time to develop and procure: and (2) 

The relevant accomplisfunent record of competitors. 

g. During the uncertain period of identifying and 

exploring alternative system design concepts, contracts 

covering relatively short the periods at planned dollar 

levels will be- used. Tihely technical reviews of 

,alternative system design concepts will be made to effect 

the orderly elimination of those least attractive. 

h. Contractors should be provided with operational test 

conditions, xnission performance criteria, .and life cycle 

cost factors that will be used by the agency in the 

evaluation and selection of the system(s) for full-scale 

development and production. 

i. The participating contractors shuuld Be provided 

with relevant operational and support experience through the 

program manager, as necessary, in developing performance and 

other requirments for each alternative system design 

concept as tests and trade-offs are made. 

j. Development of subsystems #at are intended to Be 

hcluded in a major systezz acquisition program will-be 

restricted to less than fully designed hardware (full-scale 

development) until the subsystem is identified as a part of 

a system candidate for full-scale development. Exceptions 

may be authorized by the agency head if tbe subsystems are 

long lead time items that fulfill a recognized generic need 

or if they have a high potential for conxnon use among 

several existing or future systems. 

(No. A-109)

10 

12. Demonstrations. 

a. Mvarrcesnent to a competitive te8t/deZ!mnStratiQn 

phase may be approved when the agency's mission need and 

program objectives are reafffrmsd and when at-ative 

rpstlem design concepts are selected. 

b. Major system acquisiti'oh programs will be structured 

and resources planned to demonstrate and evaluate campethg 

alternative system design concept8 that have be- selected. 

Exceptions rnay be authorized by the agency head if 

demonstration is not f essible.. 

c. Development of a single system design concept aat 

has not been competitively selected should be considered 

only if justified by factors such as urgency of need, or by 

the physical and financial hpracticality of demonstrating 

alternatives . Proceeding with the development of a 

noneompetitive (single concept) system may be autfrorizsd by 

the agency head. Strong agency program managanent and 

technical direction should be used fog syrtcms that have 

been naithez competitively selected nor dunonrtrattd. 

13. Full-scale development - and production. 

a. Full-scale development , including lhited 

production, may be appxoved when the agency's mission need 

and program objectives are reaffinncd and competitive 

demonstration results verify that the chosen Bystem design 

concept(8) i s sound. * 

b. Full production may be approved when the agency's 

mission need and program objectives are reaffirmed and wben 

system performance ha8 been satisfactorily tested, 

heependent of the agency development and user 

o=ganizations, and evaluated in M environment that assures 

Jemonstra tion in expected operational conditions. 

Zxceptions to independent testing may be authorized by the 

agency head under such circumstances as physical or 

financial impracticability or extreme urgency. 

c. Selection of a system(s) and contractor(s) for fullscale 

development and production is to be made on the basis 

of (1) system perfonnance measured against current mission 

need and program objectives, (2) an evaluation of estimated 

acquisition and ownership costs, and (3) such factors as 

-I ' 

(NO. A-109)

4 -. 

11 

r 

contractor(s) demonstrated management, financial, and 

technical capabilities to neet program objectives. 

d. The program manager will monitor system tests and 

contractor progress in fulfilling system performance, COS+, 

and schedule commitments. Significant actual or forecast 

variances will be brought to the attention of the 

appropriate management authority for corrective action. 

14. Bud etin and financing. Beginning with FY 1979 all 

agcn&lFarr 

part of the budget process present 

budgets in terms of agency missions in consonance with 

Section 20l(i) of the 3udget and Accounting Act, 1921, as 

added by Section 601 of the Congressional Budget Act of 

1974, and in accordance with OMS Circular A-11. fn so 

doing, the agencies are desired to separately identify 

research and development funding for: (1) The ~enerzl 

technology base in support of the agency's overall missions, 

(2). The specific development: efforts in suppcrt of 

alternative system design concepts to accomplish each 

mission need, and' (3) Full-scale developnents. Each agexy 

should ensxre that research and derclcpnlent is not 

undesirably duplicated across its missions. 

15. Information - tc Conqress. . 

a. Procedhres for this purpose will be developed ir. 

conjunction with the Office of Management and Budget and tbe 

various committees of Congress having oversight 

responsibility for agency activities. Beginnins with FY 

1979 budget each agency will inform Congress in the normal 

budget process about agency rnissiths, capabilities, 

deficiencies, and needs and objectives related tc 

acquisition programs, in consonance with Section 60l(i) cf 

the Congressional Eudget Act of 1974. 

b. Disclosure of the bdsis fox an agency decision to 

proceed with a single system desigr. conceFt without 

competitive selection and demonstratior. wili be made to the 

congressional authorizatian and appropriation committees. 

16. Implementation. All agencies will work closely with the 

Office of Yanagement and Budget in resolving cll 

implementation problem. 

17. Submissions to Office of Management and Budget. 

Agencies w ill subxt tne following to OMS: 

(NO. A-109)

12 

a. PoliCY directives, regulations, and guidelines as 

they are issued. 

b. Within rrfx months after the date of this Circular, a 

time-phased action plan for meeting the requiremturts of this 

Circular . 

c. Periodically, the aqcncy approved meptiorrs 

permitted undex the provi8ions of this Circular. 

This bformathrr will be wed by the Om, h idsn%i”fp€ng 

major system acquisition trends and i~ 8cini&xing 

implaentations of this policy. 

+- 

18. In irits. All questions or inquiries should be 

submitte to the MB, Administrator for Federal Procurement 

Policy. Telephone number, area code, 202-395-4677, 

I

March 19, 1980 

NUMBER 5000 2 

Department of Defense Instruction 

SUBJECT : 

References: 

Major System Acquisition Procedures 

(a) DoD Directive 5000.2, "Major System Acquisition 

Process," January 18, 1977 (canceled by reference 

(b) 1 

(b) DoD Directive 5000.1 "Major System Acquisitions ,I' 

March 19,. A980 

(c) DoD Directive 5000.35, "Defense Acquisition 

Regulatory System," March 8, 1978 

(d) through (u), see enclosure 1 

I 

- < 

,-- 

A. PURPOSE 

This Instruction replaces DoD Directive 5000.2 (reference (a)) to 

provide revised supplementary procedures for Department of Defense 

use in implementation of reference (b). 

B. APPLICABILITY 

The provisions of this Instruction apply to the Office of the Secretary 

of Defense (OSD), the Military DeQartments, the Organization of the 

Joint. Chiefs of staff (OJCS), and the Defense Agencies. As used in this 

Instruction, the term "DoD Components" refers to *the Military Departments 

and the Defense Agencies. 

C. PROCEDURES 

1. Major System Designation. The Secretary of Defense shall designate 

certain acquisition programs as major systems. The Defense Acquisition 

Executive (DAE) -may recommend candidate programs to the Secreta of 

Defense at any point in the acquisition process, but normally recodda- 

tions shall be made in conjunction with Mission Element Need Statement 

(MENS) approval. The DAE is authorized to withdraw the designation o 

"major systems" when changing circumstances dictate. The DAE shall f 

advise the Secretary of Defense before such an action is taken. 

2. Major System Listings. The Executive Secretary of the Defense 

SystemsAcquisition Review Council (DSARC) shall, as the agent of the DAE, 

maintain and distribute a list of designated major systems. Additions 

and deletions to the list shall be disseminated when changes occur. The 

Executive Secretary, in conjunction with the Assistant Secretary of Defense 

(Comptroller) shall maintain a listing of programs for which Selected 

Acquisition Reports (SARs) are required.

3. Milestone 0 Documentation 

a. Mission Element Need Statement (MENS) 

(I) Purpose. A MENS is the document upon which the Milestone 

0 decision is based. It identifies and defines: (a) a specific defi-. 

ciency or opportunity within a mission area; (b) the relative priority of 

the deficiency within the mission area; (c) the Defense Intelligence 

Agency (DIA) validated threat forecast or other factor causing the 

deficiency; (d) the date when the system must be fielded to meet the 

threat; and (e> the general magnitude of acquisition resources that the 

DoD Component is willing to invest to correct the deficiency. A MENS is 

required for each acquisition, including system modifications and 

additional procurement of existing systems, which the DoD Component 

anticipates will cost in excess of $100 million (FY 1980 dollars) in 

research, development, test and evaluation (RDTsrE) funds or $500 million 

(FY 1980 dollars) in procurement funds. A MENS is not required for programs, 

regardless of size, directed toward developing and maintaining a 

viable technology base. 

(2) Scope. The deficikcy or opportunity identified in a 

MENS should be defined as narrowly as possible to allow a reasonable 

probability of correcting the deficiency by acquiring a.single system. 

Defining a broad architecture of systems to counter projected threats in a 

mission area is part of the ongoing analysis of mission areas rather than 

a part of a specific acquisition program. Though the scope of the deficiency 

identified in a MENS shall be narrowly defined, solutions to the problem 

shall not be specified. Alternative concepts and associated risks shall 

be evaluated in the Concept Exploration phase. 

(3) Format. Enclosure 2 contains the format of a MENS along 

with explanatory information regarding its preparation. 

(4) Processing 

(a) DoD Components shall identify all new acquisition 

starts in the yearly submission of the Program Objective Memoranda (POH). 

These submissions shall identify those new acquisitions that are likely to 

exceed dollar thresholds specified above for a MENS. New system acquisitions 

exceeding the dollar thresholds Specified above that have not previously 

had a MENS reviewed and approved must have a MENS submitted to the 

DAE no later than POH submission date. Review and approval of MENS before 

POM submission are encouraged. 

(b) The DoD Component shall forward a draft HENS, along 

with a recommendation as to whether the program should be designated as a 

major system, to the DAE who shall solicit comments from the OSD staff, 

OJCS, the other Military Departments and the DIA. 

1 When the DAE plans to recommend designation as a 

major system, cornenis on the HENS shall be provided to the DoD Component 

2

Mar 19, 80 

5000.2 

within 20 workdays of receipt of the draft MENS. Upon receipt af OSD 

comments, the DoD Component shall revise the MENS and return it to the DAE 

within 20 workdays for approval action. 

2 When the DAE does not recommend designation as a 

major system, the ME& shall be returned to the appropriate DoD Component 

or functional organization for milestone decision responsibility on the 

program. 

b. Secretary of Defense Decision Memorandum (SDDM) 

(1) When the D U plans to recommend approval of the MENS and 

designation of a system as major, the action officer shall prepare a SDDM. 

The DAE shall forward the SDDM to the Secretary of Defense after formal 

coordination. The SDDM shall be coordinated with the DSARC permanent members 

and any advisors the DAE considers appropriate. The Milestone 0 SDDM 

shall also establish when the next milestone review shall occur. 

(2) Upon approval of the MENS by a SDDM and designation of a 

system as major, the DoD Component may take necessary 2rogrami.ng action to 

incorporate requi .red resources into the Planning, Programing, and Budgeting 

System (PPBS). Programing action may be taken in parallel with preparation 

of the MENS. If the requirement is urgent, the MENS should be submitted 

with a request for reprograming action. 

4. Defense Systems Acquisition Review Council (DSARC). The DSARC, 

acting as the top level DoD corporate body for system acquisition, shall 

provide advice and assistanc: to the Secretary of Defense. The following 

paragraphs set forth organizational and procedural elements of the DSARC 

process. 

a. DSARC Permanent Members and Principal Advisors 

(1) Permanent Members 

(a) Defense Acquisition Executive. 

(b) Under Secretary of Defense for Policy or a representative 

designated by the Under Secretary of Defense for Policy. 

(c) Under Secretary of Defense for Research and Engineering 

or a representative designated by the Under Secretary of Defense for Research 

and Engineering. 

(d) 

Assistant Secretary of Defense (Comptroller). 

(e) Assistant Secretary of Defense (Manpower, Reserve 

Affairs, and Logistics). 

Evaluation). 

(f) Assistant Secretary of Defense (Program Analysis and 

3

6 

(8) Chairman, Joint Chiefs of Staff, or a representative 

designated by the Chairman, Joint Chiefs of Staff. 

(2) Principal Advisors 

(a) For communications, command, control, and intelli- 

3 

gence (C I) research, engineering, and program matters: Assistant 

Secret ry of Defense (Comunications, Command, Control, and Intelligence) 

9 

(ASD(C I)). 

(b) For NATO affairs: Advisor to the Secretary of 

Defense and Deputy Secretary of Defense on NATO Affairs. 

(c) For producibility and acquisition strategy matters : 

Deputy Under Secretary of Defense for Research and Engineering (Acquisition 

Policy). 

(d) For program matters: Appropriate Deputy Under 

Secretary of Defense for Research and Engineering. 

ments matters: 

(e) For defense policy and related operational require- 

Appropriate Deputy Under Secretary of Defense Policy. 

matters: 

(f) For threat assessment and substantive intelligence 

Director, DIA. 

. . 

(8) For test and evaluation (TSre) matters: Director of 

Defense Test and Evaluation. 

(h) For cost' matters: 

Improvement Group. 

Chainaan of the Cost Analysis 

(i) For Logistics Support: 

Improvement Group. 

Director, Weapons Support 

b. DSARC Reviews. The DAE is responsible for convening formal 

meetings to facilitate the decision process. Principal advisors shall not 

attend unless invited by the DAE. Formal DSARC reviews shall normally be 

held at Milestones I, 11 and 111. In addition, any DoD Component head or 

DSARC member may request the Chair to schedule a meeting of the DSARC to 

consider significant issues at any point in the acquisition process for 

' any major system. The Secretary of Defense may, upon the recommendation 

of the DAE, chooae to make his decision and issue a SDDM without a formal 

council review. Dispensing with the formal review shall be considered by 

the DAE when the OSD staff review, preliminary to a scheduled review, 

indicates that there are no substantial issues that would require a DSARC 

meeting. In this case, the SDDM shall be prepared by the action officer 

ind coordinated in accordance with subparagraph C.4.e.(4). before it is 

forwarded to the Secretary of Defense for his decision.

Mar 19, 80 

5000.2 

c. Milestone Review Process 

(1) Milestone Planning Meeting. A planning meeting shall be 

scheduled by the Executive Secretary and chaired by the action officer six 

months in advance of each DSARC meeting. The purpose of the Milestone 

Planning Meeting is to identify the system and program alternatives and 

the issues and items to be emphasized in the Decision Coordinating Paper 

(DCP) and the Integrated Program Summary (IPS). DSARC members, DSARC 

advisors, DoI) Components, and the program manager shall be represented at 

the meeting. After the meeting, the action officer shall prepare a 

memorandum recording the issues and responsibilities and distribute it 

to DoD Components, DSARC members, and DSARC principal advisors. 

(2) For Comment DCP and IPS. The For Comment DCP and the IPS 

shall be submitted together by the DoD Component to the DAE three months 

before to a DSARC meeting. The action officer shall ensure that copies 

are made available to DSARC members and advisors and to their staffs for 

review and discussion with the DoD Components. The action officer shall 

prepare and transmit formal comments to the DoD Component two months in 

advznce of the scheduled DSARC meeting. Every effort shall be made to 

resolve major issues before the DSARC meeting. 

(3) Final DCP and IPS Update. A Final DCP and an update to 

the IPS shall be submitted by the DoD Component to the Secretary of Defense 

through the DAE 15 workdays before a scheduled DSAFX meeting. The action 

officer shall provide copies of the Final DCP and the update to the IPS to 

each DSARC member and advisor. 

(4) Pre-Brief Meeting. The position of each DSARC member and 

advisor on the DCP shall be determined by their staff representatives in 

time to prepare a presentation to be given to the DAE at the Pre-Brief 

Meeting. Attendees at the Pre-Brief Meeting shall be prepared to discuss 

the DCP and to provide specific program recommendations. Following the 

Pre-Brief Meeting, the action officer shall prepare a recommended position 

paper and provide copies to the members and principal advisors to the 

DSARC so that final action can be taken at the executive session after the 

formal DSARC meeting. Members and principal advisors whc.have dissenting 

positions shall be prepared to submit them at the executive session for 

final resolution. 

(5) Post DSARC Action. Within five workdays following the 

DSARC meeting, the DAE shall submit the SDDM, together with any dissenting 

positions, to the Secretaty of Defense. Normally, the SDDM shall be 

issued to the DoD Component within 15 workdays following the DSARC meeting. 

5 

33

d. Milestone Planning Schedule 

Event 

Milestone Planning Meeting 

For Comment DCP and IPS 

DCP Comments to DoD Components 

Final DCP and Update to IPS 

OSD Cost Analysis Improvement Group 

(CAIG) Briefing 

OSD Test and Evaluation (TZ) Briefing 

OSD Manpower and Logistics Analysis 

(Mm) Briefing 

DIA Report to DSARC Chair, 

DSARC Chair's Pre-Brief Meeting 

(OSD Staff Only) 

CAIG Report 

TsrE Repart 

M U 

Report * 

DSARC Meeting 

SDDM issued to DOD Component 

Schedule in 

Relation to Date 

of DSARC Meetinq 

- 6 months 

- 3 months 

- 2 months 

- 15 workdays 

- 15 workdays 

- 15 workdays 

- 15 workdays 

- 10 workdays 

- 5 workdays 

- 3 workdays 

- 3 workdays 

- 3 workdays 

0 

+ 15 workdays 

e. Milestone I, 11 and 111 Documentation 

(1) Decision Coordinating Paper (DCP). The DCP provides the 

primary documentation for use by the DSARC in arriving. at the milestone 

recommendation. It summarizes the program and the acquisition strategy,% 

the alternatives considered, and the issues. The format of the DCP is 

in enclosure 3. Notwithstanding any other DoD issuance, additional 

requirements for information in the DCP shall be issued only by the DAE. 

(2) Integrated Program Summary. The IPS summarizes the 

implementation plan of the DoD Component for the life cycle of the system. 

The IPS provides information for a management overview of the entire 

6

Mar 19, 80 

5000.2 

program. The format of the IPS is in enclosure 4. Notwithstanding any 

other DoD issuance, additional requirements for information in the IPS 

shall be issued only by the DAE. 

(3) Milestone Reference File (MRF). A MRF shall be established 

at each milestone to provide a central location for existing program ddcumentation 

referenced in the DCP and IPS. This working file shall be provided 

by the DoD Component to the DSARC Executive Secretary at the time 

the For Comment DCP and IPS are submitted. It shall be used by DoD personnel 

who need more detailed information. 

(4) Secretary of Defense Decision Memorandum (SDDM) 

(a) The SDDM documents the Secretary of Defense's milestone 

decision including approval of goals and thresholds for cost, schedule, 

performance, and supportability, exceptions to the acquisition process, 

and other appropriate direction. Before forwarding the SDDM to the DAE, 

the action officer shall obtain coordination from the DSARC permanent 

members and such advisors as the DAE considers appropriate for the action. 

The DAE shall. forward the SDDM to the Secretary of Defense for signature. 

e 

(b) The action officer shall prepare and coordinate a 

SDDM to reflect revised thresholds and updated program direction resulting 

from threshold breaches or projected breaches reported by the DoD Component. 

The action officer shall also prepare and coordinate a SDDM when programing 

or budgeting decisions (including congressional direction) affect thresholds 

or program direction contained in the previous SDDM. This shall be done 

within 40 workdays after submission of the Presidential Budget to Congress. 

In the case of congressional direction, the SDDM shall be prepared and 

coordinated 40 workdays after the legislation is enacted. 

f. DSARC Executive Secretary. The DAE shall designate a permanent 

Executive Secretary who shall administer and coordinate the DSARC process 

and : 

(1) Maintain and distribute periodic status reports. 

(2) Make administrative arrangements for Milestone Planning 

Meetings, Pre-Brief Meetings, and DSARC meetings. 

(3) Assemble and distribute necessary documentation, 

and SDDMs. 

(4) Maintain a central reference file for current DCPs, IPSs, 

(5) Hold the MRF until a SDDM is issued. 

meetings. 

(6) Control attendance at Pre-Brief Meetings and DSARC 

g. Action Officers. The action officer appointed by the DAE for 

each major system is the lead OSD staff person in the DSARC process and 

must coordinate both OSD issues and DoD Component positions.- Action 

7

officers may be appointed from any OSD functional organization. For 

example, they may be from the Office of the Under Secretary of Defense for 

Research and Engineering for systems involving research, development, and 

production, from the Office of the Assistant Secretary of Defense (Comptroller) 

for general purpose ADP systems, or from the Office of the Assistant 

Secretary of Defense (Manpower, Reserve Affairs, and Logistics) for military 

construction that is designated as a major system. They shall: 

systems. 

(1) Conduct the Milestone Planning Meeting for assigned major 

(2) Process the DCP and IPS in accordance w ith this Instruction. 

(3) Present the DSARC Chair's Pre-Brief Meeting, 

(4) Monitor the milestone planning schedule. 

(5) Draft, coordinate, 'and obtain approval of all SDDHs 

including those necessitated by PPBS or congressional action. 

D. DEFENSE ACQUISITION REGULATORY SYSTEH (DARS) 

DoD directives, regulations, and instructions that relate to the 

acquisition process are part of the DARS as stipulated by DoD Directive 

5000.35 (reference (c)). The object of this system is to provide detailed 

functional regulations required to govern DoD acquisition of materials, 

supplies, and equipment. Program managers shall tailor their programs to 

DoD issuances that are part of DARS. Principal issuances that relate to 

major system acquisitions are listed in enclosure 5. 

E. ACQUISITION PLANNING 

Special attention in the development of acquisition planning shall be 

given to the following matters. 

1. Mission Analysis. Hission analysis is any assessment of current 

or projected U.S. military capability to perform assigned missiohs. 

Mission analysis shall normally evaluate the interplay of threat, capability, 

operations concepts, survivability, and other factors such as 

environmental conditions which bear on the missions of the various 

Components of the Department of Defense. The primary objective of mission 

analysis is the identification of deficiencies , so that appropriate corrective 

action can be initiated. The scope may vary from a very narrow 

subject, such as the survivability of a Minuteman silo attacked by a 

single reentry vehicle, to a very broad subject, such as the ability of 

the United States to maintain overall strategic deterrence. 

2. op erational Requirements. Materials, supplies, and equipment 

acquired by the Department of Defense shall contribute to or support the 

operationai requirements of the military forces in execution of- missions 

8

Mar 19, 80 

5000.2 

essential to the current national military strategy or enhance future 

capabilities of the military forces to achieve national and defense policy 

objectives. Department of Defense operational requirements should be 

prioritized based on their effectiveness in furthering policy objectives 

and strategic and operational concepts, in consideration of threat and 

other factors, such as environmental conditions, which bear on the 

missions of the various Components of the Department of Defense. 

3. Threat. The effectiveness of a proposed weapon system in its 

intended threat environment is a fundamental concern of the acquisition 

effort and shall be considered by the program manager from the outset. An 

interactive analysis, that is, a study of the system-threat interaction, 

shall be conducted before Milestone I and shall be updated in greater 

specificity before each subsequent mirestone. The intelligence used for 

the interactive analysis shall be provided by the DoD Component intelligence 

organization directly to the program manager and to DIA. Analyzing 

system concepts and specific systems in this manner allows program managers 

to identify threat parameters, such as numbers, types, mix, or characteristics 

of projected enemy systems, that are most critical tb the effectiveness 

of the U.S. system. These Critical Intelligence Parameters 

{CIPs) shall be provided to the DIA through the DoD Component intelligence 

organization. The Director, DIA, shall validate threat data before its 

use in the interactive analysis, review CIPs output, and report the findings 

and conclusions in writing to the DAE 10 workdays before the DSARC 

meeting. The DoD Component shall confirm the effectiveness of the U.S. 

system in its intended threat environment at Milestones I1 -and 111. 

4. Aequis i tion Strategy 

a. Acquisition strategy is the conceptual basis of the overall 

plan that a program manager follows in program execution. It reflects the 

management concepts that shall be used in directing and controlling all 

elements of the acquisition in response to specific goals and objectives 

of the program and in ensuring.that the system being acquired satisfies 

the approved mission need. Acquisition strategy.encompasses the entire 

acquisition process. The strategy shall be developed in sufficient 

detail, at the time of issuing the solicitations, to permit competitive 

exploration of alternative system design concepts in the Concept Development 

phase. Additionally, sufficient planning must be accomplished for 

succeeding program phases, including productien, for those considerations 

that may have a direct influence on competition and design efforts by 

contractors. The acquisition strategy shall evolve through an iterative 

process and become increasingly definitive in describing the interrelationship 

of the management, technical, business, resource, force structure, 

support, testing, and other aspects of the program. 

I" 

b. Development of the initial program acquisition strategy shall 

be completed by the cognizant DoD Component as soon as possible after 

Milestone 0. The program acquisition strategy is unique for each program 

and should be tailored by the program manager to the circumstances surrounding 

the program. Intended exceptions to applicable DoD Directives 

9 

37

and Instructions should be noted in the acquisition strategy summary. 

Advice and assistance should be sought from business and technical 

advisors and experienced managers of other major system programs. 

c. While the acquisition strategy developed is not a document 

requiring DAE approval, the program manager shall be required to keep all 

management levels informed ou strategy and shall be required to summarize 

certain aspects of it at the milestone decision points. At the earliest 

practical date and no later than Hilestone 11, the program manager shall 

be required to have a comprehensive strategy for full-scale development, 

test and evaluation, and production. The strategy for production shall. 

' 

be updated at Milestone 111. 

5. Management 

a. Management Information. Management information shall be 

limited in all areas of activity to information essential to effective 

control. Normally, the required information shall be provided from the 

same data base used by the contractor for management decision making. A 

realistic work breakdown structure that is limited to the minimum number 

of levels necessary shall be developed €or each program as a framework for 

planning and.assignment of responsibilities, reporting progress, and as a 

data base in making cost estimates for other systems. A configuration 

management plan, that is consistent with the work breakdown structure, 

shall be developed for each program. 

b. P.rograming and Budgeting. Secretary of Defense milestont 

decisions are based upon review of details of one particular program - - and 

reflect the readiness of that system to .progress to .the next acquisition 

phase. The program must compete for funds with other programs in the PPBS 

process. The Secretary of Defense milestone decision is based on specific 

schedule, cost and operational effectiveness estimates which, if changed 

significantly, might alter the Secretary of Defense milestone decision. 

PPBS actions by the DoD Components and the OSD staff, that cause the 

schedule and cost estimates to change significantly enough to call into 

question the last milestone decision, shall be explained by the DoD 

Component or OSD staff element proposing the change in the PPBS document. 

6. Estimates. The validity of decisions reached at each milestone 

depends upon the quality of cost, schedule, performance, and supportability 

estimates presented at the milestone reviews. Although there 

is considerable Ucertainty early in the acquisition process, every effort 

must be made to use the best available data and techniques in developing 

estimates. Bands of uncertainty shall be identified for point estimates. 

Broad bands of uncertainty shall be expected early in the acquisition 

process, with smaller bands developed as the program matures and uncertainty 

decreases. Traceability of successive cost estimates, to include 

adjustments for inflation and to segregate estimating error from program 

changes, shall be maintained starting with program cost estimates approved 

at Milestone I. 

10 

38

Mar 19, 80 

5000.2 

(1) A life-cycle cost estimate shall be prepared at Milestone I, 

using the best available data and techniques. An updated life-cycle 

cost estimate shall be provided for each subsequent milestone. These cost 

estimates shall be developed as soon as ongoing development activities 

permit to eliminate unnecessary delays in the milestone decision process. 

(2) Milestone I cost, schedule, performance, and supportability 

goals shall not inhibit tradeoffs among these elements by the 

program manager in developing the most tost-effective solution to the 

mission need. 

(3) Goals and thresholds for cost, schedule, performance, and 

supportability shall be documented in the SDDM. At Milestone 11, firm 

design-to-cost goals shall be established for the system or systems selected 

for full-scale development. Program accomplishments shall be evaluated 

against cost, schedule, and supportability goals with the same rigor as 

the evaluation of technical performance. 

', .-- 

d. Thresholds. Threshold values shall be proposed at Milestones 

I, 11, and 111 by the DoD Component and approved by the Secretary of 

Defense for cost,.schedule, performance, and supportability. These 

values shall reflect reasonable variances that are acceptable for the 

goals proposed in the DCP. At Milestone I, threshold values shall be 

established for only a few items and the distance between the goal and the 

threshold for individual items may be larger than at subsequent milestones. 

Program managers are responsible for reporting actual and projected 

threshold breaches immediately to each line official and the DAE. Following 

this initial report, the DoD Component shall provide the DAE with 

an assessment of the problem,, a description of the action to be taken to 

resolve the problem and, if required, a recommendation to establish new 

threshold values. Approved changes to thresholds shall be documented in 

a SDDM. 

e. Selected Acquisition Reports (SAR). SARs shall be submitted 

for all major systems in accordance with 1300 Instruction 7000.3 (reference 

(a)). The SAR baseline (Development Estimate) shall be extracted from 

the goals approved in the SDDM at Milestone 11. 

f. Use of Government or Not-For-Profit Organizations. When 

Government laboratories, federally funded research and development tenters, 

educational institutions, and other not-for-profit organizations 

submit alternative major system design concepts for consideration, care 

shall be taken to exclude such proposing organizations from participating 

in the evaluation process on those systems. If further exploration of an 

alternative system design concept submitted by one of these organizations 

is appropriate, that concept may be made available to industry to propose 

on the continued development stages. In selected cases where no capability 

exists in the private sector or when it may be in the best interest of the 

Government to do so, DoD research and development centers may be assigned 

development tasks to complement a major system development. DoD research 

and development centers may be used as a technical arm of the program 

management office, especially in matrix management organizations. Typical 

11 

34

assignments may include actions such as studies, analysis, technology 

development, systems engineering, risk and cost reduction efforts, and 

development test and evaluation. 

g. Affordability 

(1) Affordability, the ability to provide adequate resources 

to acquire and operate a system, is principally a determination of the 

PPBS process. The ability to provide sufficient resources to execute a 

program in an efficient and effective manner is a fundamental consideration 

during milestone reviews. Requests or proposals to proceed into the next 

acquisition phase shall be accompanied by,assurance that sufficient resources 

are or can be programed to execute the program as directed by the Secretary 

of Defense. 

(2) The DoD Component shall describe in the MENS the general 

magnitlide of resources it is prepared to commit to acquire a system to 

satisSy the need. At Milestone I, affordability considerations shall be 

used as a factor in determining the selection of alternative concepts. .At 

Milestones I1 and 111, a favorable decision shall not be made unless the 

system's projected life-cycle costs, including product improvement and 

other modifications, are within the amounts reflected in the latest Five 

Year Defense PlaniExtended Planning Annex (mP/EPA) or unless compensating 

changes are made to other items in the defense program. 

(3) The DoD Component briefing presented to the DSARC at 

Milestones I, 11, and I11 shall include the following affordability CORsiderations: 

(a) Comparison of program resource estimates,with Latest 

PPBS projections (including the extended planning annex). 

a 

(b) Identification of the relative ranking for this 

system and the DoD Component's other major systems in the same mission 

area and general time frame in the latest program or budget submission. 

(c) Analysis of variation in unit cost (recurring 

I 

hardware, flyaway, and procurement) with production rate (Milestones I1 

and 111). 

(d) Identification of potential offsets necessary to provide 

the resources to execute the remaining phases of the program where 

program cost estimates provided to the DSARC exceed latest budget projections. 

Where joint programs are involved, offset identifications shall 

not be limited to the lead DoD Component. 

h. Timeliness. An objective of any acquisition is to achieve 

Initial Operational Capability (IOC) within the time dictated by the need 

or threat. When technical, cost, and supportability risks are low or when 

the urgency to counter a threat transcends high technical, C QS~, and 

supportability risks, DoD Components should give consideration to minimizing 

acquisition cycle time by planned concurrency. This may include 

12

Mar 19, 80 

5000.2 

increasing funding, overlapping, combining, or omitting the phases of the 

acquisition process or overlapping or combining development T&E with 

operational TZ. The amount or degree of such concurrency should be based 

on the extent of potential savings in acquisition time balanced against 

technical, cost and supportability risks and national urgency in each 

acquisition program. To achieve timely deployment, consideration may also 

be given to accepting system performance growth after deployment. When 

any of the faregoing actions are planned, the risks associated therewith 

will be discussed in the documentation provided to the DSARC. Further, 

when tailoring of the acquisition process includes modification or reduction 

of the number of milestone reviews by the Secretary of Defense, the planned 

approach must be approved in a SDDM. 

i. Joint Programs. When system acquisition programs involve more 

than one DoD Component, the-SDDH shall specify the lead Doll Component and 

provide explicit guidance on the responsibilities of the participating DoD 

Components, including threat support. The lead DoD Component shall assign 

the program manager and request the other participating DoD Components to 

assign deputy program managers. The lead DoD Component shall also establish 

the program's objectives by promulgat'ing a program charter after coordination 

with the other participating DoD Components. 

6. Competitive Concept Development 

a. 'Alternative Concept Solutions. Alternative concept .solutions 

to the mission need shall be obtained compeLitively unless the Secretary 

of Defense, in approving the MENS, has approved pursuing a single concept. 

Even when pursuing a single concept, competition should be considered in 

development of that concept. The widest possible range of acquisition and 

support alternatives to satisfy the mission need shall be considered. 

Foreign contractors should be included in solicitations, when feasible and 

. when not prohibited by National Disclosure Policy. At a minimum, solicitations 

shall outline the need in mission terms, schedule objectives and 

constraints, system cost objectives, and operating and deployment constraints. 

b. Standards and Specifications. Maximum use should be made of 

architectural standards and functional specifications that include only 

minimum requirements. Specifications stated in detailed or how to language 

should be avoided, when possible. The number of government specifications 

and standards specified or referenced in solicitations shall be minimized. 

Solicitations should normally not specify standard support concepts. If 

nonstandard support concepts are proposed, they shall be accompanied with 

estimates of the cost to implement them. 

7. Contracting 

a. Pre-Proposal Briefings. Program managers 

orientation briefings for all interested participants 

should conduct 

and, where appropriate, 

13

allow industry to comment on acquisition strategy and drafts of solicitations. 

The objectives are to remove inhibitors to innovative solutions 

and to improve the approach to achieving all system objectives. 

, 

b. Competition. Competition should be introduced in the Concept 

Exploration phase and maintained throughout the acquisition cycle as long - 

as- economically practical. In addition, both the government and its 

contractors shall break out components for competition throughout the 

acquisition cycle to the maximum extent possible. Techniques and procedures 

that result in cost auctioning between prospective contractors or where 

technical ideas or data are shared with other contractors without prior 

authorization of the source are prohibited. 

c. Socioeconomic Program Implementation. Government socioeconomic 

programs must be considered thtoughout the system acquisition process. 

Particular emphasis shall be placed on contracting with small and disadvantaged 

business firms. 

8. Design Considerations 

a. Standardization in Engineering Design. Standardization shall 

be applied in design during the Demonstration and Validation phase and the 

Full-Scale Development phase, as appropriate, to reduce cost of production 

and operational support and to accelerate timely operational readiness 

through optimum utilization of existing or codeveloped subsystems, equipment, 

components, parts, and materials common to other systems and available in 

supply. standardization shall be optimized to enhance -nuclear and nonnucle? 

survivability and endurance, quality, reliability, maintainability, support 

ability, and life-cycle cast but shall not compromise-essential performance 

or excessively inhibit the application of new technology and innovative, 

advanced design. A standardization progrq, including a parts control program, 

shall be applied in accordance with,methods and objectives described 

in DoD Directive 4120.3 (reference (e)) and DoD Instruction 4120.19 

(reference (f)). 

b. Production Plaming. From the early phases of the program, 

consideration shall be given to the costs of production, including total 

government investment required to ensure adequate production facilities, 

availability of critical, materials, and capability. Affordability must be 

considered in production planning. The program manager shall also consider 

means to increase the possibilities for competition during Production. 

When the program requires production of conventional ammunition, early 

coordination is required with the single manager for conventional ammunition 

to ensure that the ammunition production plan considered at Milestone I1 

can be executed. Refer to DoD Directive 5160.65 (reference (g)). 

c. op erational Concept. The operational concept specifies how 

the system shall be integrated into the force structure and deployed and 

operated in peacetime and wartime to satisfy the missign need set forth in 

the MENS. It establishes required readiness and activity rates and provides 

the basis for further integrated logistics support planning. An initial 

14

Mar 19, 80 

5000.2 

operational concept and system readiness objective must be developed by 

Milestone I for each alternative and finalized by Milestone 11. The 

operational concept and system readiness objective shall be maintained 

throughout the program. 

d. Manpower and Training 

(1) New systems shall be designed to minimize both the n u- 

bers and the skill requirements of people needed for operation and support, 

consistent with system availability objectives. Manpower and personnel 

factors, to include numbers, occupations, and skill levels of 

manpower required, shall be included as considerations and constraints in 

system design. Integration of manpower and personnel considerations with 

the system shall start with initial concept studies and shall be refined 

as the system progresses to form the basis for crew station design, 

personnel selection and training, training devices and simulator design, 

and other planning related to manpower and personnel. 

(2) Where applicable, planning for training shall consider 

provisions for unit conversion to the fielded system and training of 

reserve component personnel. Such planning shall consider tradeoffs 

conducted among equipment design, technical publications, formal training, 

on-the-job training, unit training, and training simulators and shall 

develop a cost-effective plan for attaining and maintaining the personnel 

proficiency needed to meet mission objectives. 

(3) After Milestone 0, manpower requirements shall be 

subjected to tradeoffs with system characteristics and support concepts. 

Manpower goals and.thresholds consistent with projected activity levels, 

maintenance demands, and support concepts shall be identified by Milestone 

11. Tradeoffs for maintenance effectiveness among manpower (numbers, 

occupations, and skill levels), support equipment, system design, and the 

support structure shall be conducted. The manpower and training requirements 

to support peacetime readiness objectives and wartime employment 

shall be developed by Milestone 111. These requirements shall be based 

upon considerations that include available Operational Test and Evaluation 

results and current field experiences with similar equipment. 

e. System Energy Requirements. Energy requirements shall be 

considered in system selection and design. Major considerations shall be 

minimum energy usage and the substitution of other energy sources for 

petroleum and natural gas. 

f. Electromagnetic and Other Spectrum Allocation. Planning and 

coordination for spectrum allocation, compatibility, and use with other 

systems having related spectra shall be conducted as early as possible for 

all systems involving intentional radiation or reception of electromagnetic 

energy, optical energy, acoustic energy, or other types of energy. 

g. Deployment Requirements. When deployment is a requirement, 

transportability shall be a system selection and design factor. The 

15

FORWPRD 

The purpose of this handbook is to provide a reference and instructional 

source for GAO staff involved in the MASAD/SDA assignments. Our 

intention at this time is to provide the basic documents that pertain to 

the weapon system.acquisition process. Although the book is geared to 

defense acquisitions., the management principles discussed have. equal applicability 

to civi1:projects and should be used with that in mind. 

Additionally, the SDA group director for civil acquisitions has issued 

specific guidance to attain our objectives in. that important area. 

The bibliography at the end of the handbook lists other documents 

that provide more detail-in specific areas. These- documents have been 

provided to the headquarters staff and regional offices over a period of 

, 

The handbook will be updated periodically. 

We solicit your sug- 

gestions for material to be added, and any other ideas you have for 

frnproving this hand-book. Any comments or suggestions should be addressed 

to Senior Associate, Director, Mission Analysis and Systems Acquisition 

Bi v i s io n , Sys t ems Dev el o prn en t a nd Ac qu i s i ti on Su bd i v i s i on .

January 5, 1982 

NUMBER 5000.1 

Depaztment of Defense Directive 

SUBJECT: 

& j or System Acqaisitions 

References: (a) DoD Directive 5000.1, "Major System Acquisitions 

," (hereby cancrltd) 3/19/80 

(b) QplB Circular A-109, "Major System Acquisitions ,I' 

4/5/76 

(c> DoD Instruction 5000.2 "Major System Acquisition 

Procedures" (Reissuance, date TBD) 

. (d) through (g), see enclosure 1 

A. REISSUANCE AND PURPOSE 

This Directive reissues reference (a) and updates the statement 

of acquisition policy for major systems or major modifications to 

existing systems, within the Department of Defense. This Directive 

also implements the C O R C ~ ~ and ~ S provisions of Office of Hanagemeot 

and Budget (Om) Circular A- 109 (reference (b) 1. 

3. APPLICABILITY 

The provisicns of this Directive apply to the Office of the 

Secretary of Defense (OSD), the Military Departments, the Organization 

of the Joint Chiefs of Staff (OJCS), and the Defense Agencies. 

As used ia this Directive, the term "DoD Components" refers 

to the Hilitary Departments and the Defense Agencies. 

C. OBJECTIVE 

The policies in this Directive are intended to assure the effective 

and efficient acquisition of major defense systems to achieve 

the operational mission objectives of the U.S. Armed Forces in 

support of National Policies and Objectives. 

D. ACQUISITION M ACh'T PRINCIPLE3 AND OBJECTIVES 

1. Each DoD official who has direct or indirect responsibility 

for the acquisition process shall be guided by the policies and 

objectives of OHB Circular A-109 for Major System Acquisitions. 

2. Effective design and price competition for contractual 

requirements shall be obtained to the maximum extent practicable to 

ensure cost effective defense systems which are responsive to mission 

requirements. 

3. Improved readiness and sustainability are prirnzrp objectives 

of the acquisition process. Resources f o achieve readiness w ill

eceive the same emphasis as those required to achieve schedule or performance 

objectives. As a management precept, operational suitability of deployed 

weapon systems is an objective of equal importance with operational effectiveness. 

(The terms "operational effectivness" and "operational suitability" are 

defined in DoDD 5000.3 (reference (d)). 

4. Reasonable stability in acquisition. programs is necessary to carry out 

effective, efficient, and timely acquisitions. To achieve stability, DoD 

Components shall : 

a. conduct effective long range planning 

b. consider evolutianarg alternatives in lieu of solut3ons at the 

frontier of technology; e.g. PrQlanaed Product Improvements (P I) to reduce 

risk. 

e. realistically estimate, budget, and adequately fund procurement, 

(research and development as well as production) logistics, and manpower for 

major systems. 

d. plan to achieve economical rates of production, rnain'ain surge 

compacity, and conduct realistic mobilization planning. 

e. develop an acquisition strategy at the inception of each major 

acquisition which sets for+& the objectives, resources, principal management 

assumptions, extent of competition, proposed contract types, and program 

structure (e. g. development phases, decision milestones, test and evaluation 

periods, planned concurrency, production releases) for that specific system 

and tailors the prescribed steps in the major system acquisition decision 

making process to this strategy. When the acquisition strategy is approved by 

&e DoD Component, changes shall be made only after assessment and consideration 

of the Objectives of this Directive and of the impact of such changes on 

the program. 

5. To promote efficiency in the acquisition process, authority will be 

delegated to the lowest levels of the organization at which a comprehensive 

view of the program rests. Responsibility and accountability must be clearly 

established. In particular, the Service Program Hanager must be given authority 

and resources commensurate with the responsibility to execute the program 

efficiently. Reviews, such as those by the Defense Systems Acquisition Review 

Council (DSARC), are means to evaluate the information required for a decision 

which higher level authority has specifically resemed and not delegated to 

the program manager. Reviews are not. ends in themselves and will not be used 

to request data other than that which is required as a basis for higher authority 

decisions. 

6. A cost effective balance must be achieved among acquisition costs, 

ownership costs of major systems, and system effectiveness in terms af the 

mission(s1 to be perfonned. 

7. Cooperation with United States allies in 

systems will be maximized to achieve the highest 

ardization and interoperability of equipment and 

the acquisition of defense 

practicable degree of standavoid 

duplication of effort. 

2

Mobilization requirements will be a factor considered in evaluating opportuaities 

for international cooperation. (See DoDD 2010.6, reference (e)) 

8. Although a proper am-length business relationship with industry must 

be maintained io order to protect the public interest and to foster competition, 

a strong industrial base is necessaty 'for a strong defense. The proper 

arms-length buyer-seller relationship should not be interpreted as adversarial 

by either industry or Government; and te&uxical collaboration with industry 

must be maintained to achieve major system acquisition objectives and meet 

technological challenges, The impact of DoD acquisitions on the industrial 

base must also be considered bote for the near term and long range implieations. 

- 

E. POLICY 

1. General. The provisions of this Directive and OHB Cirdar A-109 

apply to the acquisition sf major systems within the Department of Defense. 

The management principles and objectives in this Directive should also be 

applied to the acquisition of systems not designated as major. Responsibility 

for the management of system acquisition programs shall be decentralized 

except for the decisions specifically retained by the Secretary of Defense in 

this Directive. The program Hanager should have the authority, resouces, and 

reponsibility to efficiently execute the program for which he is reponsible. 

2. Soecific 

a. Analysis of Mission Areas.. As a key to a focus on planning, Doio 

Components, OSD, and OJCS shall conduct continuing analyses of their assigned 

mission areas to identify deficiencies in capability or more effective means 

of performing assigned tasks. From these mission analyses, a deficiency or 

opportunity may be identified that could lead to initiation of a major system 

a cquis i t ion p rogram . 

b. Alternatives to New Svstem Development. A system acquisition may 

result from an identified deficiency in an existing capability, a decision to 

establish new capabilities in response to a technologically feasible opportuuity, 

a significant opportunity to reduce the DoD cost of ownership, or in 

response to a change in National Defense Policy. Development of a new system 

may be undertaken only after assessment of alternative system concepts including 

: 

(1) Change in United States or NATO tactical or strategic doctrine. 

(2) Use of existing military or commertial system. 

(3) Hodification or improvement of existing system. 

c. Phases of the Acquisition Process. There are distinct phases in 

the acquisition of a new system. Normally, these are: concept explorstion, 

demonstration/validation, full scale development, and production and deployment. 

These phases are to be tailored to fit each program to minimize acquisition 

time and cost consistent with the need and the degree of technical risk 

- involved. For major system acquisitions, the Secretary of Defense will make 

3

the decisions described in paragraph d below. The SecDef decision milestones 

will be tailored to match the selected acquisition strategy. In keeping with 

the Frinciple of controlled decentralization, the mission need determination 

has been incorporated into the PPBS and the production decision has been 

delegated to the DoD Component, provided that established thresholds are met. 

DoD Components shall adhere to this principle by delegating authority to the 

lowest organizatioaal level feasible. Rilestone decision points shall be 

identified in fhe acquisition strategy for each major system acquisition. 

d. Secreta- of Defense Decisions. The Secretary of Defense will 

make the following decisions in the acquisit'ion of major systems: 

(1) Zfissioa Need Determination. The mission nerd determination 

is accomplished in the PPBS process based on a Component's Justification of 

Major System New Starts (JMSNS) which is to be submitted with the Program 

Objectives Memorandum (POM) in which.funds for the budget.year of the POM are 

requested. The SecDef will provide appropriate program guidance in the Program 

Decision Memorandum (PDM). This action provides official sanction for a 

. new program start and authorizes the Service, when funds are available, to 

initiate the next acquisition phase. 

(2) Milestone I. This first SecDef major milestone decision is 

concept selection and entry into the the demonstration/validation phase. This 

decision is based on a System Concept Paper (SCP) prepared by the DoD Component. 

The Milestone I decision is a validation of the requirement, based 

upon preliminary evaluation of concepts, costs, schedule, readiness objectives, 

and affordability. It provides authority to proceed with the demonstration/vaiidation 

phase and to develop the system suffsciently to support a 

Milestone I1 decision. A review of the acquisition strategy may be substituted 

for a formal Milestone I review for those programs not requiring a 

discrete demonstration/validation phase. The Milestone I decision shall 

establish thresholds and objectives to be met and reviewed at the next milestone, 

the acquisition strategy for the recommended concept(s) (including the 

nature and thing of the next Sed)ef decision point), and a "not to exceed" 

dollzr threshold to carry the program through the next milestone. 

(3) Milestone 11. .The second Sedef major decision is program 

go-ahead and approval to proceed with full scale develwt. The production 

decision at Milestone 1x1 is delegated to the DoD Components, provided the 

thresholds established at Milestone I1 are met. The production decision may 

be redelegated to the lowest level ia the organization at which a comprehensive 

view of the program rests. The timing of the Milestone I1 decision is 

flexible and depends upon the tailored acquisition strategy approved by DoD 

Components and the SecDef at Milestone I. In a traditional approach, Milestone 

I1 would occur at the point where a program transitions from demonstration/ 

validation into full scale development. In some cases, however, it may 

be desirable to delay this decision until some additional development effort 

has been accomplished in order to provide a better definition of performance, 

cost, schedule, producibility, industrial base responsiveness, supportability, 

and testing to reduce risk and uncertainty prior to the commitment to a major 

increase in the application of resources toward full scale development. In 

the case of a delayed Hilestone I1 decision, any full scale development contracts 

entered into prior to Hilestone I1 will be written in such a manner 

that .:he program can be terminated at Hilestone I1 at minimum cost to the 

4

Government. Whatever timing for Milestone I1 is selected in the acquisition 

strategy, it is anticipated that both Component's and OSD reviews will be held 

in reasonable proximity so that program managers will not be required to pass 

the same milestone more than once. In any event, it is generally desirable to 

maintain design competition up to the Milestame I1 decision point, or beyond, 

if it is determined to be a cost effective acquisition strategy. 

The Defense Acquisition Executive (DAE) will advise SecDef on all of the major 

milestone decisions. Normally, the DAE will be assisted by the Defense System 

Acquisition Review Council (DSARC) ab Milestones I and 11. He may call fer 

program reviews at any time during the entire acquistion process. Program 

reviews are for the purpose of providing specific infonnation to the DAE on a 

particular aspect of an acquisition program. They are more limited in scope 

than DSARC reviews and do not necessarily serve as a basis for a Sed)ef decision 

recommendation. 

e. Designation of Major Systems. The Secretary of Defense shall designate 

those systems which are to be managed as major systems. Normally, this 

shall be done at the time the new start is authorized in the PDH. The decision 

to designate any system as major may, after consultation with the appropriate 

DoD Component, be based upon: 

(1) Development risk, urgency of need, or other items of interest 

to the Sesretary of Defense. 

(2) -Joint acquisition of a system by the Department of Defense 

and representatives of another nation or by two or more DoD Components. 

(3) The estimated requirement for the system's research, development, 

test and evaluation, procurement (production); and operation and support 

resources. A ;MsNS is required for all acquisitions for which the DoD component 

estimates costs to exceed $200 million (FY80 dollars) in RDTS funds 

and/or $9 billion (E80 dollars) in procurement (production) funds. 

(4) Significant Congressional interest. 

f. Affordability. (DSARC/P?BS Interface). Affordability, which is a 

function of cost, priority, and availability of fiscal and manpower resources, 

shall be considered at every milestone and during the PPBS process. The order 

of magnitude of resources the DoD Component is willing to cormnit and the 

relative priority of the program to satisfy the need identified in the JllSNS 

will be reconciled with overall capabilities, priorities, and resources in the 

PPBS. System planning shall be based an adequate funding of program cost. A 

program normally shall not proceed into concept exploration or demonstration/ 

validation unless sufficient resources are or can be programed for those 

phases. Approval to proceed into full-scale development or into production 

shall be dependent on DoD Component demonstration that resources are available 

or can be programmed to complete development, to efficien:ly produce, and to 

operate and support the deployed system effectively. Funding availability 

shall be reaffirmed by the DoD Component prior to proceeding into production 

, 

I 

5

and deployment. To avoid creating program instability, funding changes shall 

not be introduced without assessment and consideration of the impact of these 

changes on the overall acquisition strategy for the major system to be acquired. 

Specific facets of affordability to be reviewed at milestone decision points 

are set forte in DoD Instruction 5000.2 (reference (e)). 

g. Acquisition Time. ELinirPrz ' ing the time it takes to acquire materiel 

and facilities to satisfy military needs shall be a primary goal in the development 

of ai acquisition strategy. Particular emphasis shall be placed OR 

minimizing the time from a commitment to acquire an operationally suitable, 

supportable, and effective system to deployment with the operating forces in 

sufficient quantities for full operational capability. Commensurate with 

risk, such approaches as developing separate alternatives in high-risk areas, 

early funding to design in reliability and support characteristics, lead time 

reductions, through concurrency experimental prototyping of critical components, 

combining phases, pre-planned product improvement, additional test articles, 

or omitting phases should be encouraged. In those cases where combining or 

omitting phases are appropriate, concurrence shall be requested from the 

Secretary of Defense. In addition, administrative delays associated with 

briefings and reviews at various organizational levels shall be minimized. 

h. Tailoring and Flexibility. The acquisition strategy developed for c 

each major system acquisition shall consider the unique circumstances oi 

individual programs. Programs shall be executed with innovation and common 

sense. To this end, the flexibility inherent 

to tailor an acquisition strategy to actomodate the 

cular program as long as the strategy remains 

for system acquisitiaa problem solving and the 

for business and management considerations. 

normally contemplate narrowing the number of D-,L 

no longer considered viable as the acquisiton process proceeds. 

This narrowing 

of competing alternatives shall be accomplished without interrupting the 

remaining contracts and it need not be timed to coincide with milestone decisions. 

However, competition for each phase, including, where appropriate, 

plans for design competition in the early phases and price competition in 

production, shall be described in the acquisition strategy. 

i. Test and Evaluation. Throughout the acquisition process, emphasis 

will be placed upon verifying actual performance through test and evaluation. 

The procedures of DoD Directive 5000.3 will be integral to all systems acquisition 

planning and decision-making. 

j. Readiness. Readiness goals and related design requirements and 

activities will be established early in the acquisition process, and will 

receive emphasis comparable to that applied to cost, schedule, and performance 

objectives. Logistic supportability shall be considered early in the formulation 

of the acquisition strategy and in its inplementation. Projected or 

actual achievement of readiness objectives will be assessed at each milestone. 

(See DoDD 5000.39, reference (f)). 

3. Documentation for Milestone Decisions 

a. Mission Need Determination. 

h 

6

Justification for Haior System New Start (JnsNS). Each major 

system acquisirion program requires a JMS#S to be reviewed by the Office of 

the Secretary of Defense in the PQM review before the new start is included in 

the DoD budget submission. DoD Components shall prepare .JM!i3S to document 

major deficiencies (or opportuaities for improvements) in their ability to 

meet mission requirements when it is planned thaf such deficiencies be corrected 

by the acquisition of a major new system or a major modification to an existing 

system. Joint JL.ISNS shall be prepared to document major deficiencies is two 

or more BOD Components. OSI) and the OJCS may also prepare JMSNS in response to 

mission area deficiencies. Joint and OSD/OJCS JtlsNS sbll recornend a lead 

Doll Component to the Secretary of Debcase. The JKSNS is described in enclosure 

2 to DoD Instruction 5000.2 (reference (c)). 

b. Hiifestone I 

System Concept Paper (SCP). The SCP provides basic documentation 

fer use by Defense Systems Acquisition Review Council (DSARC) members in 

arriving at a recommendation to the Secretary of Defense. The SCP is described 

in enclosure 3 to DoD Instruction 5000.2 (reference (c)). The 

SCP will identify program alte,matives based upon initial studies/analyses 

of design concepts; alternative acquisition strategies; expected operational 

capabilities; industrial base capacity; readiness, support, and personnel 

requirements; and cost estimates. The Test and Evaluation Mzster Plae 

(TDl?), as described in DoDD 5000.3 (reference (d)) , w ill outline the test 

and evaluation program. 

c. Milestone I1 (and Milestone 111, if SECDEF decision is required) 

Desision Coordinating Paoer/Inteprated Program Summary (DCP/IPS). 

The DCP/IPS summarizes the DoD Component's acquisition planning for the system's 

life-cycle and provides a management overview of the program. The DCP/IPS is 

described in enclosure 4 to DoD Instruction 5000.2 (reference (c)). The Test and 

Evaluation Master Plan (TEMP) as described in DoDD 5000.3 (reference (a)) will 

define the test and evuation program for the full scale development phase. 

d. OSD Staff Information Requirements. DoD Components ' appropriate 

staff ~~ elements will work with the OSD staff so that OSD can maintain current 

visiblity over matters such as cost, supportability, test and evaluation, industrial 

base responsiveness, and production readiness throughout the acquisition 

process. 

e. Secretary of Defense Decision. Secretary of Defense approval of 

the JMSNS is accomplished in the PPBS when the major system'new start is 

approved by the Sedef in the PDM. Changes, if any, from the DoD Component 

approach directed by the Secretary will be documented in the PDM. For a Joint 

Program JMSNS and all program Hilestones, a Secretary of Defense Decision 

Memorandum (SDDM) documents each Sedef decision, establishes program goals 

and thresholds, reaffirms established needs and program objectives, authorizes 

exceptions to acquisition policy (when appropriate), and provides the direction 

and guidance to OSD, OJCS, and the DoD Components for the next phase of the 

acquisition. 

7

F. RESPONSIBILITIES 

1. The Defense Systems Acquisition Review Council (DSARC) shall advise 

the Secretarg of Defense on milestone decisions for major systems and such 

other acquisition issues as the Defense Acquisition Executive determines to be 

necessary. 

2. The Defense Acquisition Executive (DAE) 

a. The Under Secretary of Defense Research and Engineering is designated 

DAE and shall: 

(1) Be the principal advisor and staff assistant to the Secretary 

of Defense for the acquisition of defense systems and equipment. 

(21 Serve as a permanent member and the Chairman of the DSARC. 

DSARC : 

(3) In coordination with the other permanent members of the 

(a) Integrate and unify the management process, policies, 

and procedures for defense system acquisition. 

(b) 

Monitor and assure DoD Component compliance with the 

policies and practices ia OK3 Circular A-189, this Directive, and DoD Instruction 

5000 -2 (reference (c)) , a+d DoD Direetive 5000.3 (reference (a)). 

(c) Ensure that tke requirements and viewpoints of the functional 

areas are given considesatisn during staff and DSARC deliberations, and 

are integrated in the recommendations sent to the Secretary of Defense. 

(d) Ensure consistency in applying the policies regarding 

NATO RSI for major systems. 

b. The DAE is specifically delegated authority to: 

(1) Designate action officers who shall be responsible for the 

processing of the milestone documentatioa and who shall monitor the status of 

major systems in a11 phases of the acquisition process. 

(2) Recommend the lead Component for multi-Sersrice acquisition 

programs and provide guidance as to when in the development cycle transition 

to single Service management will occur. - 

(3) Issue instructions and one-time, Directive-type memoranda in 

accordance with DoD Directive 5025.1 (reference (g)). 

(4) Obtain such reports and information, consistent with the 

provisions of DoD Directive 5000.19 (reference (h)), as may be necessary in 

the performance of assigned functions. 

(5) Conduct program reviews as appropriate.

3. The Under Secretary of Defense for Research and Engineering (USDRE) shall 

be responsible for policy and review of all research, engineering development, 

technology, test and evaluation, procurement, and production of systems covered 

by this Directive and shall easure integration of the Acquisiton Precess and 

the PPBS. The USBRE shall: 

a. Monitor, in conjunction with the USD(P) and the Director, Program 

Analysis and Evaluation (PAiZ), DoD Component procedures for analysis of mission 

areas. 

b. Coordinate review of JblsNS provided by DoD Components in the POH 

to detedne whetker major system new starts should be included in the PDPI. 

c. Coordinate, together with Assistant Secretary of Defense (Comptroller) 

Assistant Secreary of Defense (hnpower, Reserve Affairs and Logistics 

(HRAS;e) and Director, PA=, the iaterfaee of the acquisition precess with the 

PPBS . 

4. The Under Secretarp of Defense for Policy (USDP) is a permanent 

member of the DSARC and shall: 

a. determine whether system requirements as defined in the BSNS 

are consistent w5dr-policy and p1a-g prevision of the Defense Guidance; 

< 

b. advise the Defense Acquisition Executive on the international 

implications (including eo-production) of any new systems development; 

c. monitor, in conjunction witb USDRE and Director, PA=, DoD component 

procedures for analysis of mission areas. 

5.. The Assistant Secretary of Defense (Manpower, Rescme Affairs and 

Logistics) (ASD(MRA&L)) is a permanent member of the DSARC and shall: 

a. Be responsible for policy on logistics, facility construction, 

energy environment, safety, and manpower planning for new systems throughout 

their life cycle. 

b. Ensure that logistics planeing is consistent with system hardware 

parameters, logistic policies, and readiness objectives. 

c. Monitor DoD Component procedures for planning and providing post 

productian support to meet system readiness objectives. 

d. Coordinate, together with- the USDRE the ASD(C) and the Director, 

PA= the interface of the acquisition process with the PPBS. 

6. The Assistant Secretary of Defense (Comptroller) (ASD(C)) is a permanent 

member of the DSARC and shall coordinate, together with USDRE, ASD(MRA&T..), and 

Director, PAS, the interface of the acquisition process with the PPBS. 

7. The Director, Program Analpsis and Evaluation (PAS) is a permanent 

member of the DSMC and shall: 

9

a. Monitor, in conjunction with UsIlRE and USD(P), DoD Component 

procedures for analysis of mission areas. 

b. Evaluate cost-effectiveness studies prepared in support of miltstone 

decisions for major system acquisitiod. 

c. Coordinate, together w ith USDRE, ASD(C) and ASD(W), the 

interface of the acquisition process with the PPBS. 

8. The Ckairman, Joint Chiefs of Staff (CJCS), or a representative designated 

by CJCS, is a permnest member of the DSARC. 

9. The Service Secretaq or his desimer is a permanent member of the 

DSARC for major acquisitions involving bis Service. 

10. The Erincipal advisors to the DSARC are listed h BOD Instruction 

5000.2 (reference (c)) . 

11. The Head of Each DoD Component shall manage ea& major system acquisition 

assigned by the Secretary of Defense and shall establish clear lines of 

authoriry , responsibility, and accountability. 

DoD Component Heads shall also: 

a. Appoint a DoD Component acquisition executive to serve as the 

principal advisor and staff assistant to'the;Aead of the DoD Component. 

b. Establish a System Acquisition Review Council at the Component 

level to advise the Component Head on designated acquisition programs. 

c. Ensure that a program manager is assigned and that a program 

manager's charter is approved as soon as feasible after mission need determination 

and resource allocation in the budget. 

d. Ensure that the program manager's tenure is of sufficient length 

to provide continuity and management stability. 

- 

e. Establish management training and career incentives to attract, 

retain, motivate and reward competent program managers. 

f. Provide a program manager the necessary assistance to establish a 

strong program office with clearly established lines of authority and reporting 

channels between the program manager and the Head of the DoD Component. Where 

functional Organizations exist to assist the program manager, the relationship 

of the functional areas to the program manager shall be established. 

g. Limit reporting requirements-for the program manager to the minimum 

required for effective oversight. 

- 

h. Monitor major system acquisitions to assure compliance with OMB 

Circular A-109, this Direcrive, DoD Instruction 5000.2 (reference (c)), and 

DoD Directive 5000.3 (reference (a)). 

10

i. Manage, when designated lead Component for multi-Semice 

acquisisirons, the program under the policies 2nd procedures used by that 

Semice. The program manager, program manager's office, and functional 

elements of each participating Semice will operate under the policies, 

procedures, data standards, specifications, 'criteria, and financial accourrfing 

of the lead Component. Exceptions, as a general d e , will be limited 

to thse where prior mutual agreement exists, or those essential to satisfy 

substantive needs of the participating services. 

j. Designate a single major field agency, separate and distinct 

from the materiel deVeloping/procurhg cemma~ds and user representative 

commands, to be responsible for the CQIU~UC~ of operational test and evaluation. 

This agency will report the results of its independent operational test and 

evaluation directly to the Hilirary Service Chiefs and Sencice Secretaries. 

12. The Program Manager shall be responsible for acquiring and fielding 

(in accordance with instructions from line authority) a system that meets the 

approved mission need and achieves the established cost, schedule, readiness, 

and af f ordability ob j ectives . 

13. Directed Decisions by Higher Authority. When a line official above 

the program manager exercises decision authority on program matters, the 

decision shall be documented as official program direction to the program 

manager and a copy shll be available eo the DAE. The line official shall 

be held accountable for the decision. 

6. ORDER Of PRECEDrnCE 

This Directive and DoD Instruction 5000.2 (reference (c)) are first and 

second in order of precedence for major system acquisitions except where 

statutory requirements override. All DoD issuances shall be reviewed for 

conformity with this Directive and DoD Instruction 5000.2 (reference (c)) and 

shall be changed or canceled, as appropriate. Conflicts remaining after 90 

days from issuance of this Directive shall be brought to the attention of the 

originating office and the DAE. 

H. EFFECTIVE DATE AND MeLEPIENTATION 

This Directive is effective immediately. Forward one copy of implementing 

documents to the Under Secretary of Defense for Research and Engineering 

within 120 days.

REFERENCES, continued 

(d) DoD Directive 5000.3, "Test and Evaluation" (date TBD) 

(e) DQD Directive 2010.6, "Standardization and Interoperability of 

Weapons Systems and Equipment within the North Atlantic Treaty 

Organization," Bar& 5 1980 

(f) DQD Directive SO00 -39, "Development of Integrated Logistics Support 

for Systems and Equipmeets," January 17, 1980 

(g) 

DoD Directive 5025.1, "Department of Defense Directives System," 

November 18, 1977 

(h) DoD Directive 5000.19, "Policies for the Hanagcmurt and Control of 

Information Requirements ,** Hard 12, 1976

Figure 3 

IfkIhTAIKABTLIT? AWIT TRULS fEXL?l?LES) 

3

~ __ 

f 

kPk 2 4 19e1 

TO 

: A11 Re3ioaal Managers 

FRGM : Senior ksociate Director, WSAG/SDA - Donelc! E. Day 

of the 

An extremely important but unfoytunately ofter! ovsrldoked pa:t 

work we do in the Systems Developnrent a.td Acquisitim Sddivisior: of MWD 

fs our review of civi? acquisition programs. 

. 

Early this year, Les Farrington was selected tn be the Groq Dfrector 

in charge of our Chi1 Acquisitions Group. He has taken a r,mber of initiatives 

that should enable us to put grezter mphasfs in tkfs inportant area. 

I * - 

We neei your help in doing this. 

.. .- . 

,. . . ... - 

- il .,.- - .: .. .I 

. . , .., 

c 

' * .. 

. - 

In a manarmdm dated Fekruary IO, 1581; -to-the-Rggionaf'lnagrrr, Les .. 

-provided a list of major projects locatcd'jrr your regions. .He also requst2d 

t?at you provide ideas on pctential sljrveys -ana rwiws. -..Ne ere enccu;.ag,ri 

by the respsnss! we have received up t3 this pointc# .. - 2 . .-. .:.. 

J ' 1 '- 

~nc~oseci is an excellent paper *at tes an~ ais staizf. put- togetber ~ ai& - 

identifies t?w work that we have dcne, kaat we pressan2ly have t;nCeway, and 

sme of our plsns for the future, It should be useful to :mu a;ld your skff 

in gettfnng acquainted with our work. Please particu1ar:y note the sectior! . . 

concerning zhe seven new jobs planne&in the duly-Septunter 1-%1 tiinefrw, 

- _- . . _ 

We mrk closely with the applicabfc operatins diyis':ons hi .Headquartsrs,'- 

rmt only during tbe planning sta3e hut also after jobs are in prcccss and as 

the reports are being drafted. We would greatly appreciate any suggestions. 

or cments which you might offer. . -. 

If you have any questions, please do not hesftate tb contact Les on 

275-3556. ' 

End osure 

. .-,e 

. - . . . . .- 

. 

- - 

t 

.. 

. - 

.. 

' 

cc: 

MAD/SDA Staff 

Di rector, FOE 

Issue ~ rfa 

Ccordinators in CED, END, 660, PLRD (3) 

Regional Office Sublocations (2) 

. 

. - . 

- . 

.. -.. 

.:.- . 

. '

MISSION ALGALYSIS AND SYSTEMS 

ACQUISITION DIVISZO3 

CIYTIL ACQ'JISITIONS GXCJ'J'E 

REVIETJ OF MAJOR CIVSL SYSTEMS 

PAST---!? FESENT---FUTURZ 

, 

I 

* G.S e GEN3RAL ACCOUNTING OFFICX 

LESTER C. FARRINGTON, GROUP CIRECTOR 

APRIL 19131

I 

I 

TABLE OF CONTEET3 -- 

P aqe 

Background 

Selection of Systmm for Review 

Nature cf Civil Group ' s Seviews 

Subjects 3f Interest 

Rzpcrts in Progress 

Assignments in Progress 

Potential New Jobs Planned 

(Jcly-SeptemLer 1981 Plaxed Stazts) 

Iccanpli shnen ts 

Brie5 Summary of Reports 

Issued by the Civil Grs~p 

(Ganuary I, 1979 tc Mardl 36, 1981) 

StaSf Stuifes, Reports, End Ot3er 

Efforts of t3e Civil Group from 

Initiaticn in 1974 to Ei-azch 31, IS31 

Staff Studies 

Reports 

Testixony 

Other 

1 

2 

a 

3 

C 

" 

5 

6 

6 

8 

14 . 

15 

20 

20

BP-CKG2GUND 

,/ - .\. 

'. -- 

Durinq most of the 1350's and 1960's weason system programs 

experienced cost overruns which were noted by som Congressmen 

and procurement planaers. However, the Consrass did not beccme 

pzticularly concerned ur.til eajor cost gr0W-h for the C-5A airera* 

was Fublicized in 1969. Retlscting this concern, the 

Csnsress czlled upon the General Accounting OfSice to report 

periaaically on %he ?regress of nrious major woagen syst.eino * 

acqtrisitiocs and to provide authorizing and appropriating 

committees with more rsliable inforination on issues involving 

weapon system cost, schedule, and perfo-mance status. 

In an August 1969 Setter to the Chai-Ten or the Ssncte and 

Ziocse Committees on Armed Services, the ComptrQller General outlined 

pians for givixg greater attention to the procurenent cf 

major weapon systems and for periadi.cally repcrting findings. 

to-the Cansress. At the same the, GAO established in what was 

then callsd the Defense Division, e separate mjor acuciaitions 

suXivisior,, to fulfiil this ccmnitment. 

In February 1970, thc su3divisioc issued its first annual 

financial status report on DOC'S majcrr system3 in various 

phases of the acquisition procass. The widespread atkentian 

gives to the financial status report ~eneratel. iaterest.ic 

1972 for similar reporting of major pr9grams ~cqilr~d by 

civilian agencies. And so, tne Con?t?=oller Gerersl. started 

the process of develoging critzria to be used in selecting 

cfvi; agency Frograins foz annual reporting. Meanwhile, iI! 

hrariqs bsfore the House Amed Services Consnittee on March 29, 

1973, Congressnian Dickinsoa asked the General Rczounting Cft'ic3 

ko furnish the cononittee with information pertzicing to CGS~ 

ovsr,runs on civil systems. Infomatior, yovided cn 30 ziviL 

system first appeared in "-he Coqrsssional Recor3 of 

Septefiber 24, 1973. 

As a result of the increased congrsssionai interest in 

major civil system acqgisltians, the Civil Grolip wts established 

in the najor acquisition; subdivision about January 1974 

to review major c ivil acquisitions 2nd to FrsrJare a report. on 

the Pinancial statns af chese acquisikioas a3 02 Eecember: 31, 

1973 

Civil acquisiticns costing over $25 millim zcch kava 

increased suSstantAallv since the Civil C-rouy' 4 Sirst status 

report as of December 31, 1973. At. that tim'e, thqse aquieitions

- - . 

___ 

I 

numb2red 269 with a total estixated cost crf $132 Sillian. As 

of Septabaz 30, 1980, they have incraassd to 554 with 2n 

astimated cost cf $343.5 billion. 

In the Fast, the CiJi.1 Group has revt6wed only a smcll 

gartion of these large ecp-zndikures. In line with t5z 

Comptroller Qemziii's dirx%ion and ths ogerall findi-igs of 

the Mcot-Morris studies citsd ir, the Coinptroller Generil's 

memorandum of December 22, L98r3, the Civil Group plans to 

significantly expand its work in tke acqvlisition Gf CiJiL 

systms 

SELECTION OF SYIiTZMS FOR REVIEW 

The Civil Group is responsible f3r revieving a11 ma2or 

civil systems. !:os", of *-e grouF's work is self-initiaccd. 

In carrying out its respr-sibility, exterrsive rsssarch is 

condccted into ZiviJ. programs Lo identify those systems warranting 

review. Fo= identifying major civilian systems, thz 

gzoup has established a unilatcrial threshold cf $25 sillian 

or more in R3Tr:E 1/ aad/cr production both individgally and as 

a carobination of systems wtrich fulfill a mission ne&. ST.stoms 

aze selected based on the number and dollar value of &E agency's 

systa J whether ?SAP/WSPD 2/ has performsd any w3rk in ths 

agency recently, and whetker-other GAO divisions or civil 

agencies plan work in the part?.cular system cz arza we liava 

in mind. Generaily,, systems e.r9 selected brsei on cost growth, 

laqe ilollcz value, fndlcations thar the systems are io tzorlble, 

congressional interest, ar\,d whether a repcrt on the! systan w0uJ.d 

have an inpact cn the systas dsvelopment or on critical decisiocs, 

. Azmual?.y, the Group prepares arrd issues ta the Congress a 

financial skatus repzr.1: which compiles into one document major civil. 

and defense acquisition projects that represent a uiive-rse from which 

job 2lanninq car: begin. Tha information contained i.n this resort 

provides a soureg for lotential MASZLD-initiate3 vorlc. and regione; 

affice-initiatab wrk as well 3s congressiozzl requeste3 wcrk. 

NATJRE OF CIVIL GROUP'S FGXEWS 

Initially, the Civil Group's reviews consisted pzimarily 

of assess:'cng the cost, schedule, and perfcmance statas 05 major 

civil agencies acquisitions. Bowever, the review scope has 

expanded to irclude reviews OF ageacieo ' cost-estimating :-rocedures , 

warranties, agencies' plaraing and acquis'ition prucesscs, grant 

program management, research and developmenr and other acquiciticn 

strategies followed in acqciricg mz.joz systems. 

- I/Research, Development, Test, and Ey?alusticn. 

2/PSAD (Procuzement and Systems Acquisition Divisicn) wc.s 

reorgaoizcd in Sazzuary 1981 ar.d becane KAS.S (Mission 

Analysis and Systems Acqiiisitior, Divisign) . 

2

' 

In pursuing its efforts, the Civil Croep consi3ei-s 3Cfice of 

Managm.znt and Budget (OME) Circular A-109, Majar Systsrns 

Acquisitior,s, a policy for acquisition of najor system 

by all exacutive agencies. OKB Circular A-109 defines the 

system acquisition process as "+**The sequerice of aquisitim 

ec'iivities starting from the agency's reconciliation Gf iks 

mission nccds with its capbili;:ies, priorities and resourczs, 

and exten6iag thzough the intr83duction of a system into 

operakional use or the otherwise successful achievement of 

_=rngram otjectives". System acquisitioa incluCies such activities 

19 : 

--malyzing agency uiissions: 

--datermining missioa need:;: 

---Ceterminin3 or' systsm requirements : 

--system progra ?laming: 

--budgeting and fundiag: 

--research, sngineering, ard development: 

--testing and evaluation: 

--cor,tracting or procurement : 

--pTogram and manaclesent control: and 

--introducing ths system into use or gtherwise 

s.rrcecssful achizvement of program objectives . 

SUBJECTS 3F INTEZST 

Scme cf the subjects of interest for the Czvil Group are: 

--'Whether the public and the mngress have adequate 

visibility of the financiai status of major civLl 

and defsnse projects being acquired by faderal 

ageaciss . 

I 

--Whether cost estimates of major systeia are zeliaale, 

acccrate, and complete. 

3

I 

I 

--The impct of aana~ament problems, schedule slippages, 

and program cnangss on system cost growth. 

--Whether the system's performance coinpases to that. 

originally planned. 

--The affordzbiiiey sf the system in camparison to the 

cverall obfectives af the agency. 

--:*ether ths sys%erts grozured will meet the agencies' 

missLon needs 

--hhe",her the asancies ' various missions and syst~ms are 

intsgrated to carry out the mission at the lowest. 

poss!ill2 cost. 

-Whether agencies are t2kir.g Erdvantage OF all available 

means of redncing ental progrnm costs, e.g. I exerdsinc 

warranty provisions of contracts. 

--Whether the Congreas hss acccruta, objective and cnmolete 

information on the status, ?=ogress, and sigrificant 

issues of i-2aividuril major civil systems under devulopnent 

and conqrruction for which ftlnds are bebg requsstsd. 

--WmtfT,er testing ani! evahuation of major civfl acquisitiom 

is effectively planned, conducted, regorted, and 

cotlsidered in decFs ionniakiag. 

--Wnethcr agencies aza ir. compliance with OMB Circular 

A-109 ' s c0ncept.s of project. nanagement . 

--meher 0E"B Circular A-lG9 has had an im?acl on acquisition 

program in terns cf helping Fetieral agencles acquire systms 

which are affordable, setisfiy the ne&, and which are availsblc 

on 'the. 

--Whether mznagemect strategies usee by Fedezal agencies Zor 

ths de-relopnient and acquisition of major progrtms/systens 

have beer; effective . 

--Pilether planning for major acquisitions adequately consider 

potenzial critical materiai shortages on system costl 

schedule, and paformance goals. 

4

- SEF3RTS IN PROGRESS 

Imprcvemnts Nended in the Managexent of the 

the Acquisition of Major Systems, Departmant of 

Elnergy (Code 953.535 ) 

I 

, 

Iinprovernents Needed in Procuring Rail Mass Transit 

Eqaipment , Department of Trahspor tation , Urban Mzss 

Transportation Administzation (Code 95i520) 

ASSIGNMENTS IN PROGRESS 

SURVEY OF 303's PROCUREMEYT CF TFI 

GAS CENTRIFUGE ENRICHMENT PLANT 

P9RTSXOilTE, OHIO 

(CODE 951599) 

The Gas Centrifuge Enrichment Plant is beins eonstruzted 

adjacent to the Fortsmocth, Ohio, Gaseous Di,Ff*xion ?lant. 

Construction 02 t3e first eight Froces 3 buildings bqzn 

in EY l9&0 and is schedcled to be cornpieted in 1989. The 

objectires of the survey are direztsd til the causes a5 

the cost increases, validity of the completicn scned*;lle, 

the conuols by DOE over custs, schedul2, ccntrEct bicis, 

constzuction performance, and warranties. 

SURt'EY OF bXTA'S ACQCISITION 3F A 

CCNMUTEX R4IERCAD TlJNl?EL IN 

PHILIU)EL?HIA, PENPr'SYEVANIA (CODE 951606) 

The cocstruc5ion of a 1.7 mils Center City Comiutor Tunnel ia 

Philadelpfiia started in 1978 and is now scheduled r'cr completion 

in 1985-about S years behind schedule. Tbe project 

is beirq supported with $240 million in Federal r'mds with 

uM'6,3. resFonsib1.e lor overseeing the project. Since construetien 

stated, the project has bePC ?he subject of 'csnsiderable 

controversy including an FBI probe of all%yed kickbacks. 

SURVEY OF sm E'RAhSCISCO'S 

WASTE-XATER P 3OGm 

(CODE 931607) 

San Prancisco has adopted a procjram ta meet cnv5romental 

standards for dilutad raw sewage discharged into the Eay 

and the Ocean. The program is estFmatsd tc. cost abcut 

$2 billion, and about $350 million has already been spent 

or committed to date. There are indicaficns that alternative 

acquisition strategias to reduce or ,zhange the 

scope anti coat of the prograa hsve not te%n explored. 

t J3

,. /. 

POTENT1.U b?EW JOBS PLWKED 

(SULY-SEPTEMBER 1'781 PLANNED STARTS) 

I. 

Survey of tfio Central 2nd Southern Florida Flood 

Coatrol Prcr ject (Corps Jf Engineers--32.1 billion) 

-- 

L. 

a. 

4. 

5, 

6. 

7. 

Survey of the Water anCi Tower Resources, Cectxai 

Arkzonz 2roject for Water Deweloprttent 

(DeFart;nCEt of Interior--$l.S biLlion) 

S~rvey of the Acquisiticn of tke Next Generation 

Westher Raear (Narional Oceanic and Atmospheric 

%dminist,-ation--$320 million) 

Xrsiual Review of the Status of Hajor 

Federal Acquisitions as of September 30, 1W1 

Survey 0.2 the Coast Guard's EffectFvensss and 

Efficieccy in Acquiring Major System {Departiient 

of Transportation) 

Survey of the Effectiveness of UrScn Kaso Traiisoartation 

Administrztion's Planning and Acquisition 

Practices €or Wajor Systems (Departmeut of 

Transportation) 

Survey 05 ths Federal Aviation Administraticn's 

Effectiveless and Efficiency in AcquirinG Major 

Systems (Departnent of TransportaTion) 

Gome of the Civil Group's past efforts have resu:.tsd in 

subst~ntial do!.lar savings Such as the Washington Metzopolitan 

Arsa Transit Aut:?ority'3 recovezy of over SL miliion in warranty 

costs for drficimt METRO transit vehicles, an3 at Least a $20 

nillioa sayings rasulting from tbe Conqress postpoiinq furzhar 

fuzdifig 02 the Oarren Gap Highway. Also, the Group's effort3 

have result& in improving aqencies' cost estimattnc FrQcsitures 

and better disclasure of costs zo the Ccngrass, increaszd 

congressional -7isibility of zgency pi'ogras, and in 3cne 

instances elimination, Fostpcnement or reconsideratim of agency 

programs. 

Soae cf the Civil GrouP's efforts in which accontpliahmeit 

reports have Seen prepared are a3 follows: 

6

I 

f 

Construction Progress arAd Problems cf 

The Darien Gar Highway (PS1w-77-154, 8/15/77) 

Linking the Aqericas - Progress and Problzras 

3': the Darieii Gap Highaay (PSAD-75-65, 2/23/78; -- 

These resorts assisted the Department of Aqricul Lxe' 2 

negotiation for hqrove..ent of joint U. S. Colutnbian foot-acdnoath 

dise~se cor,trol and eradication program, led to the 

Bepastmnt of Transportation's furnishing cost data to the 

Congress, and postponed further fsading ($2G million) - 1/ of 

the Cazien Gas Highway south of Yaviza, Panama. 

Status of the Tokaaak Fusion Test 

Reactcr Project !PSAI;-78-129, 7/10/78) 

3,s a zestilt of this report, Department of Energy disciossd 

all costs associated with the Toksiiak project ;.n Congressicnal 

Data Sheets. 

Tennes3ee Valley Authority (TVA) 

Czn Improve Estimates end Should 

Retssess Reservz Recui=ernents for 

Nxlear Power plants (?SAD-79-4$, 3/22/79) 

.As a result of this report, TVA impraved its cost aad 

schedule estimatinq ana demznd forecasting for it3 nuclear 

-pwer plants. 

Better Fanagment of METRO Subway Ecuipment 

Warrznties Needed { PEAD-79-41, 2/27/72) 

Nashington Metropolitan Area Transit AutSoriLy rnade 

si9nif icint changes in their warranty management, tnd over 

S1 million was recovered from the raiicar contractor. 

Transit Equipmert Warra,?ti=s Should Be 

%forced (PSSD-80-12, i2/7/79) 

' 

'fhe Port Aathority of Allogheny County collscted $17,000 

from PX Generzl Corporation 2or in-house warranty reGairs whi& 

were identified dt;r

BXEE SU%!%’iRY OF REPORTS ISSUED BY TEE CIVI?, GROUP 

JWJARY I, 1979 THROUGH MARC3 31, L- 

9 8 7 

The C S a Grmp has issued 18 reports from Jaaaa.ry 1979 

thzough Ear& 31, 1981. A brief summary of thesz rcpxts 

fo 1 low. 

FILWIC;CBIIU aSEETUS OF MAJOk FEDZRPfl 

ACQ’JSSEX-S, SEPTEMBER 30, 1978 

(PSAD-79-14, 1/11/79 ) 

Maj~r acquisitiacs are est.imated to cost S53l.2 billion 

at axampletion--an increase of $207.4 billion, ox 54 percent, 

over baselice estimates. Cost estinztes are 

sbwm fnr each of the 857 c5vil an2 nilitary acquisitiolrs 

currently in developxient, test, proCucticn, or cocstrxtima 

phases. 

T3E 140-FCWT EfILSBOR TUG83A.T: DOES TIiE 

COAST GXlXRD E%ED IT ON THE EAST COAST? 

(PSAD-79-17, 1/15/79] 

Tke Coast Guard planned to spend abmt $35 million to 

bEy five 140-foot mttltidssioa domestic icebreakers 

fur tbe east coast. GAO quzstionzd the nee3 Zor this 

type of vessel OL; the east coast, arid reccmenaed that 

the Coast Guard reevaluate its cverall east coast 

. mission and match it with a vessel that wculd satisfy 

the nission need. 

CONGRESS 23ZEDS RELIA8LE COST ESTIMATES 

AND ESPIMYPED PRIORITIES FOR ALLOCATING 

FUNDS FGR HATER RESOURCES PROJECT 

(PSAD-79-23, 1/23/59) 

I 

Cost estihatas prasentec? to the Ccnsress by tSe Bureau 

of Reclaaation and the Cozps of Engineers to aatkorize 

construction of water resaurces projects are bazed on 

inconnpkte data, are not always based on currant prices, 

and dc not include future in2lation tarough 2rojact 

campletion. Also, neither the Corps nor the Sureau 

sets priorities OJ its prtjects for use by the Cocgress 

i3 allccating funds. 

BETTER ,WAGEME,XT OF. METRO SUBWAY 

ECUIPYiENT WARRXSTIES NEEDED 

(PSAD-79-41, 2/27/79> 

As or’ Dzccmber 1378, the Washingtor- MatropoliLan Ar4h 

Transit Authority had bought abxt $300 million of 

equisment, including rail vshiclss, train con&rol, 

a

comu=lication and fare collection equipment, a.nd 

escalators for METR3. Authority officials estimated 

ancthor $600 niillion is needed for sinilar equiprnznt 

tG servics the total system. 'fie auchorlty IiSs r a t 

taker, fuil advsntagi of warranty and reliability 

claiises j-n its procxement ccn-lracts. If has not 

effectively monitortC the reli3bility of raiicars, 

comunicatiogs, and LCare collection equipment. As a 

result adeitional casts are being illcurred by METRO. 

TENNZSSEX V U.Y AUTHORITY CAN 

IIIIDROVE ESTIMATES AXD SHOULD 

REA5SESS RESERVE REQUIEYENTS 

FOR NUCLEAR PWER PIAKTS 

(dSm-79-49, 3/22/79) 

Cost estirnates for Xartsville, Phipgs Eend, ail2 Yzllow 

Creek nuclear powerplants are understated by several 

hundred million doLlars each. became .3f excluded costs 

ar,d optimistic and probably dnachisvable conetructian 

schedules. GAO recomended t?.at esthatts for powes 

plants be based on likely cos+: and s=fic6-ile conditions 

and that TVP,'s Board of Directors reassess the reserve 

.requirements. 

-kETTEP. REPORT TG GARY R, GAYTON, 

ACTIXG ADMZNISTRATOR, U-3EAN MASS, , 

T3!~STOF-TATIOS ADMINISTMTION , 

IU: PURCEASE OF NOJSESS3NTIAL OR 

DUPLICATIVE EQ'JIPm-T F 38 ADVANCED 

DESIGN 13% 

(PSAD-79-G7, 6/07/79) 

Scme tracsit authctities were procuriag Doth odmcters 

zz~ii h~~dcmeters--instr~en~s that pezfarm the sane 

funcLioi--for the advanced design bus. GAO recomiiended 

that the need for both odometer ane habodometers as well 

as othor 3ptioEal 'equipmezlt in tke Fracureme:.t of these 

tuses be evaluated and if warracted, suspend the .Trocur=meat 

of hubodometers or odometers on existing and fuzurs 

bus contracts 

"NECESSARY FROCUREMENT OF .-a AVIATIOL? 

WELXTTHER END KOTICE TO AIRMEX SYSTEK BY FIG+ 

(:!SAD.-79-94, a/os/79) 

FAA's purchase of a second Aviation Weather and NoSize to 

P.izmcn System prototy2e to dernosstzare the fzasitiiity 

crf consolidating several statiocs and collczaticg them 

kith rhe air traffic contzol at Leesburg, Virqinia, 

resaltad in sn unnecessary acquisitior, oC $2.6 nillion. 

2AA purchazed t3is net! system befcre it ha?. conplctely 

developed and evaluated the systen' s purforrnancz capti.?,ities. 

Also, FAA did not considar relocating tlie 

9

I . 

exis&iing - nnz did It roconsider its decisior: 

when s . znm&sz system proved to be capable of 

hqdli-EeIrSs?' operetions. 

tk~ spend $175 million for automatrng flight 

mh sheifxu enabling pilots to ohkair- wsather and 

w- :&ion and file flight plans without sssist- 

-e Ercm Eli- service specialists. FAA plans t9 

e a q&uc%iun contract before it has dzve!.oped 

U%@snEhmre reqired for automation. GAG believes 

e d .bprove the plan by dehting a portion af 

U3aa qpztem and doing more development adring the 

ammp&i&kxze ikvelopment phase. 

0 -- 

0 -q7&p5t 

E€SL=xnnM& tc help grantees raalize the full 

~EZBSX- SYZ warranty coverages in conk-acts for can- 

-anif va-ttr waste treatment facilities. Also, 

E?Ea&tmlild 

s =-age grantees ta trair. its a&plcyaes 

impectisn, analysis, an6 carrectiori of 

maXfmictions to assure a mora ecficient 

-dbetter 

k-arrahty enforcement. 

Stateand Local transit aufhorities have not taken fall 

of contract warranties. EqoiI)rnent marrufacturzrs 

?we nat reiahrsing the transit aQtksrities for lefects in 

zrstedsl ar workishi? because warraaties expire before 

all .tgPg -pent is ?laced in operation and warxanty 

=ufcxsemen at, recordkeeping pr3c=duresr and Frov;-sicns 

alzeiaadqua . *e. 

~ ~ X L ~ C-23 A I L OF W O R FEDEWL 

ACQUISITXES, -ER 30, 1979 

(35-0-25, 2jL2/80) 

Xzjor acquisitions are estimated to cast $606.8 billion 

a* -Won--an increase of $260.5 billion, or 75 

pezcezzt, mer baseline estbatea. Coot eat&ra.tes are 

.&aws Sop each of the 940 civil End military acquieitians 

, z a y In development, test, producticn, Or constmctima 

*es,

LETTER EXPOET TO NEIL E. 335DSCIiMI9T: 

SECRETARY OF 'I'RA.NSPGXTATI.Or4 RE: NEED 

FOR CONTROLS EY THE URBALJ YASI 

TWSP3RTATION ADMINISTRATIOS O*mR 

N3-PREJUDICE AUTEORIZRTICNS 

(PSAD-80-36, 2/14/80) 

The Urban Mass Transportation Administration (ZIITA) 

authorizes local transit authxities to incur costc on 

a "nc-prejudice" basis. mesa authorizations pernit 

local suthorities to use local funds for a varisiiy crf 

prposes, suc5 as profect devzkpment and gurckase 04 

buses, with the understanding That such costs may be 

reimbursed Ff future Srants are approved. GAO ;.eco=mended 

that the Seczatary of Transportation direct the 

Administrator, IjWTA, to (1) de.telop proceduzes to aFd in 

accurately p-reparing end maintainircg records of out- 

'standing no-prejudics authorizations, (2) devise zcn2rols 

hnd inesntives for no-prejudics authorizations similar 

to thoss presently f3llowed when awzrding full--f;mdi.rg 

cor?tracts to authoritzes fDr prg ject developmoat, i 3 j 

provide ovarsight of project development during no- 

FreJUdiCe develcpnent to Bssur3 thet only eligible 

costs are include9 ia future ciaims for reinbursemmt, 

and (4) provide data on no-prejudice authcrizaticns in backup 

budget material furnished to leqislativc and apprapriation 

committees. 

METROPOLITAN ATLANTA'S IikpIO TRANSIT 

SYSTEM : PROSLEMS AND ?RGGRESS 

(PSAD-80-34, 4/09/80) 

Expariencss under the Metropclitan AtLants Rapid Transit 

Authcrity's (MAXTA's) phase A grant awarded by the UrbaLi 

Mass Trsnsportation Administration (LYTA) for the fizst 

13.7 miles of a 53-nile transit system have rev2aled 

weaknesses in both UMTA' s administrrtion of the grant a.ad 

I4LRTA's management of the grant. In some ixstances, mole 

thorough UMTA review an6 guidance ccuid have elirdnated, 

3r at lesst lessened, MARTA'S management weaknesses. 

i 

FAA HAS iS0T

LETTEQ R3PORT ':.'@ NZIL 'E. GILDSCHMIDT , 

SECXTARY OF TRUSFC;RT;ITI~L! RE : 

DEVELOPMENT STATUS OF THT =ID 

TRUSSIT SYSTEM OF i4ETROPOLITAH 

DADE CCUNTY, BLORIEA 

( PSED-80-4S8 6,'05/80) 

,-. 

The Urbau Mass Transporttticn AdninfstratLon (UNTA) 

authorized capital assistacce grants for t23e develop 

mezlt t2f the fixed-guideway rapid transit system of 

Xetrosolitar, Qade County (YJC 1 , F1ori2a. GAO ' s review 

of the davelopment stztr;s cf this project identified 

sigraficant cost increases cnd a problem with tne project 

developmefit sequence wkich wihl req.;lirE close 

coordination between UMTA acd t4l)C. Because KDC has 

been consentreting on the acquisition of properties 

fcr its right-of-way toward the socthern part of it.s 

line end starting constrrictiori at that poirit, it has 

not acquired many parcels for the aorth 1Frre sectian. 

If those paxels are not acquird acearding to scheduler 

tkat sectioa of tne line wiL1 not be constsccted in a 

timely marasr to allow cars accegs t3 the entirs line 

from the saintenance and test track facility arda. 

LETTEX REFORT TO NEIL E* GQLDSCHErIDTr 

* SECRTTAR'I OF TRANSPORTATION W: 

MASSACHUSETTS BAY TFANSPORTAIIION 

PzU~ORITY' S TEDiINATION CF COEERACT 

FOR LIGHT FAIL VEHZC?LES 

(ESAD-~ML, 

ri/io/ao) 

Massachusetts Eay Transportation Autkority (MBTA) awcrded 

a contract on Nay I, 1973, to Boeing Vertol Coinpany 

(Boeing) 20r 175 light rail vshiciles (LRV) to be mznu- 

Pactnred csing the standard LRV sFecificakion develcped 

by META and funded an9 apFroved by UXTA [Urban Mass 

Transportation Administra%idn') Because af t h operztional 

pzoblems experienced after placing thess vhhFcles 

intc passenger reverue service, tke contract was 

terminated. UbPTA's lxk of project rnonitariny and 

involvement cont=ib;ltsd to its beins unable to assist 

in resolving thz L3V problems. YNTA needs zn effective 

involvement polizy to insure that project abjsctivas 

are achievad withisl alloczte9 Federal fuzds. 

12

CONTROLLINS FEGEN COSTS FOR CrIAL 

LIQUEFACTION PROGEM4 HINCXS ON 

MANACEMEIT? AND COh’T2ACT:LNS IMPRJVEMELTS 

(PSAD-81-19, 2/4/81) 

Tdo pilot plants, B-Coal aad Exxon Donor SoLvwit, established 

to dsmouskratz direct liquefaction processes for pz3- 

clucmg synthetic liqJids and solids fro& caal became 

ogcrationil during 1980. Both aperational pile5 plants 

encountered deaign and construction problems attri’outable 

to the Departzient of Energy (DOE) pteraature cam-itmafit 

to contracting and to poor construction aEd coritract 

administration by the contractor. The Groblems greatly 

ir.crease0 cost and schedule slippages. Also, COE’s qlans 

for two more larger demonstration plants Reed careful 

revisw ia light or’ their escalating ccst and risks. 

FIbJAi?’lIAL STATUS OF MAJ3R FEDEXAL 

ACQU131TZONSr SEPTEMBER 30, 1980 

(MASFD-81-13, 3/20/81) 

Major acquisitions are estimated to cost $776.6 biilicn 

at coapletion-a3 irrcreased of $325.8 billion, or 72 

percent, over baseline estimates. Cost esthates are 

shewn for each of the 1,040 civil an8 miiitary acquisitiocs 

cusrrntly i3 development, test, prodxtion, or 

construction phasas. 

13

STAFF S'PUCIES, FSPORTS, AND GTHER -- EFFORTS CF - THE 

CIVTL GR0I;:P FRIM Ii?:TIATTOX IX 1374 T3 WXC" 31, 1481 

- 

STAFF STUDIES 

- Title 

Space Tracsportation Systzm (NASA) 

Procursmnt of Locomotives and Rail 

Passenger Cars (National Railroad 

Passecgar Ccrporation ( AM'rxm) 

Federal Railroad Administration, 

Depaztxen", of Tzansportation) 

Fast Flax Teat Facility Prqraiu 

(Atomic Energy Commissioc) 

Space Transportation SI-stein (EASA) 

Sequqah Nuclear Plant 

(Tennessee Valley Authority) 

Viking 1975 Projgct (NASA) 

Puxber 

- Date 

6/74 

s/ 74 

i/7s 

2/75 

3/75 

3/75 

H s r q 5. Trurcan Can azd Reservoir 

(Dept. of e y , Cory of EAiginaers) 

Persorial Pa2id Transit System, 

Morgsntwn, West Virginie (DOT) 

Polar Class Zcekraakar Ships 

(Coast Guard, DOT) 

EisenL,ower Hemor ial Trnnel 

Bellefonte Nuclear Plant 

- 

4/75 

4/75 

PSAD-75-104 6/75 

P§AI)-?6-85 2/17/76 

PSAD-76-66 3/ 1/76

' 

REPORTS 

. .. 

Title 

Finacciel StatLs of Xajor Civil 

Acquisitions, December 32, 1973 

Evaluation of the Capital Estimate 

for the YITRO Rasid Rail Transit 

System 

-- Number 

PEAD-7 s- 58 

PSAD-7 5-35 

Lettorr Report Re: Review of PSP-D-75-107 

Proposed Additional Federal 

Assistznce to METRO 

Letter Report lie: Review cf the PSAD-75-108 

Adequacy cf: the Proposed Additional 

Federal Assistancz to METRC 

Letter Seprt 3e: Wasainqton PSA3-76-36 

Metropoiitzn Area Transit Authority 

(WMATA) Cost and Firancing 

FinancizL Status of Mcfor Acquisitions, 

Juae 30, i975 

Impact of Shortages of Processed 

Ertaterisls on Programs of Vital 

Yztional Intarest 

PSAE-76-72 

PSAC-76-14 

Letter Report to Congressnan PSAD-76-143 . 

T. Rees Re: Cperational Safety 

~f HETRO 

FaTKO Construction Safety and Cost 

Impact of Labor Strikes 

P SAC- 7 6-14 7 

Data - 

2/24/75 

5 / ca; 7 5 

6/27/'75 

6/27/95 

11 /C4/'75 

2/27/76 

2 / 27 1' 76 

5/ 28/76 

6/25/76 

Stat;;rs of the Grmd Coulee-Raver 

Transmission Linu Project 

3ifZiculties cf the Fhderal Aviatian 

Administrstion in Acquiring the 

ARSR-3 Long Range Raciar .System 

PSAD-76-167 

?SAD-75-169 

S/13/76 

8/25/ 76 

MZTR3 Status Report PSAD-7 6 - 16 5 

8/ 27/7 6 

15

Title - 

Cost, Schedule, a3d Performenra F S A 0-7 6 -. 161. 

?rokians of the LaLe Pon+.chart I sin 

and Vicioity , G,oulis Fana, Hur e iz tne 

Protscti.cn Prcject 

Status ar;? Financing of ?:he Giakric: PYAD-75-i76 10!12/?6 

' of Colui&i.a I s New Cou-uuse 

The Appclachian Devslcpmnt Ej qhway PS.0- 7; -153 ll/ 2/75 

System in Wast Virginia: Tco Litt..a 

Fur,ding Tw Late? 

Suggecterl Reporting Format3 for XZD-7 f -16 1.2/ 2/76 

Washinstor, Ketropolitan -?rea 

Transit 2Jthority [WATA) Bus tnd 

Rail Operation 

Reporting of Selected Mr?jcr Ci.s-il R:IAD-77 -5 

Projects Needs tmpravemer~.i; - E'AA 

Letter Regort Be: Coast; Guard PSAD-77 -6 3 

Procurement of Medim Rariqe 

- Sune:illaoca Ai2craF-L 

1' '7 

I\ Fioancial Statns 02 ?4zjof. 

-1 

. Acquisiticns, Jme 33, 13;6 

PSAD-77-62 

L2/29/76 

1/13/77 

The Stzztas and Problems in 

Canstructizg tkis cTat.'.ona!. 

Visicor Center 

psm- 7'7- 0 3 

4/ 4/77 

I 

Tke Cistrict cf Cclmbia's New 

Deteztiomi Center: Czrefdl 

Plannlaq Essential, far Adacluate 

Adbitic.3 

?SAD-7 !-e6 

6/33/77 

Eeed to Rcso1'72 METRO Fui-.iing P 5 FAD- 't 7 - 1 2 3 6/20/'37 

Clkreuca Camon Dan aud Keservoir : FSAO-77-131 ?/ ?E/77 

Cost, Seheclult, 2nd Szfeky Prcblems 

Lettez Report Re: Constr:xtion PSAC -7 7 - L 5 4 0/15/77 

progress ar,d Problem of the 

3arien Ghp iliglway 

16

Letter Report Re: Bill 9-1313, 

Proposed Legislation to ReqJire 

the Enactaent of Spacial Legislstion 

to Continxe Funding cn .Any 

Major Xcquisikion Whenever Cost 

or Estbated Costs Increase by 

50% or dcre 

Painetts Bend Darn and Reser-7oi.r: 

Heed fur Iniproved Snalyais of 

Alternarives cnd Cost Oate 

Financial Status of Major Fsderal 

Aquisitions, Septembez 20, 1977 

Linking the Amertcas - Progress 

and P roblems of tha Darier, jag 

Highwsy 

Consistent and Unifom Treatment 

of Inllation Needad in Program 

Cost Eatbates Pravided Ccngress 

Metrcpolitan Chicago's Conbined 

Water Cleanup and Flood Control 

Progr;im: Status and Problem 

Constrwticn Management Problems 

Have Delayed Com?leticn of the 

Ne-# Phtonium Facilities at Rocky 

FSs.ts, Colorado 

Status of the Tokamak Fusion Test 

Reactor Pro:' ect 

Status of the Federal Aviation 

Administration's MicrDwave 

LandiJS System 

Matters Relating to FAA's 

Procurement of a Microwave Landing 

System 

Washington Metropolitan Area 

Transit 2.uth.xity (WMATA) Process 

for Dsvaloping the Estimated Ccst 

of IMETRO Can Be Irrqro'red 

P SAD- 78-60 

PS-AD-7 i3-G 5 

PSAD-78-8 

PSAD-78-94 

PSAU-7E-30 

PSAD-74-3 

YSAD-78-1.41 

12/16/77 

1/20/78 

2/ 23 / 78 

3/29/73 

5/24! 78 

e/ 2/78 

7/10/78 

1@/19/73 

lC/2?/78 

12/ 8/73 

17

Title 

Pinxcial Status of Major Federal 

Acquisitions, September 30, 1979 

Numbzr 

PSm-79-14 

- D3tE 

1/11/79 

The 140-Foct Harbor T-agboat: Does PSkD-79- 17 

'&e Coast Guard Need It on the East 

Coast? 

Cong=ess Needs RaliEtble Cost PSAI3-79- 13 

Estiaates and Established Priorities 

fer Allocating Funds for Water 

Resources Projects 

Better Macagsxent 02 METEC Subway 

Eqzipment Warranties 3eeded 

Tennessee Valley Authsrity Can 

Lnprave %stirnates and Shcnld 

Beassess Keserve Requirements for 

Nuclear Power Plants 

psA&-y+.lL 

PSAD-79-49 

Letter Raport Re: Furchasr of . PSm-73-8 5 

Nonessential or Duplicativa 

Equipment for Advanced Dasigr, 

Bu s 

1/15/73 

1/29/79 

2/27/79 

3/22/79 

6/07/79 

* . 

Unnecessary Procurement OL in 

Aviation Weather and Notice to 

Aim== Systein by the FAA 

PSAE-79-94 

a/ 8/79 

FRA's Progrzm to Automate Flight 

Service Statiots: Status and 

PS,W-I C-3, 10/31/79 

Needo 

Lettzr Report Re: Need €or Mare FSAD-30-11. 11/16/79 

Effective Msnacpilent of h'arzaaties 

on Water Waste Treatment Faciiitiss 

Transit Equipment Wartan5izs 

Should Bs Enforced 

F SAD-30-*12 

121 7/79 

Financial Status of Majcr reueral P SAD-80- 25 

Acquisitions, Se?tember 30, 1379 

2/12/80 

18

' 

I 

I 

REPORTS (Continued) 

-- Title 

Letter Report Re: Need r'or Controls 

by tke Urban Xai3 Tramportation 

Administration aver No-Prejudice 

Authorization 

Ketropolitan Atlanta's Rapid Transit 

System: Problems and Progress 

FAA Has Not Gone Far Enough with 

Improvements to Its Plazming and 

Acquisition Processes 

Letter ReFort Re: Developnent 

Status of the Rapid Transit 

System of Metropolitan Dade 

County, Florida 

Letter liepcrt Re: Massachusetts 

Bay Transportation AuLhority ' s 

Termination o€ Contract for Light 

?.ail VeSicles 

ContrcllinS Federal Costs for Coal 

Liquefaction Progran Hinges on 

blanagcment and ConLracting 

Improvements 

Financial Status of Major Federal 

AcquisitioEs, Septsx-ber 30, b980 

-- Number 

PSAD-80-?6 

PSAD-80-34 

PSAD-801-42 

PSAD-8 3-3 9 

MASAD-0 1-b3 

- 

Date 

3/14/83 

4/ 9/80 

6: 4/80 

6/ 5/80 

11 / 10 /80 

2/C4/81 

3/20/81 

19

Subfect 

TE SY I MONY 

METRO Rapid Rail Transit Sys-::em 

( Richarc Gutrzt-ann ) 

Psdersl Aviation kdrPi?ist:tatiori' s 

Lag Ehqe Padaz System Ap.SR-3 

(J. H. Stobrow) 

The National Visitor Canter 

{J. H. Stolerow) 

-- 9THXR 

Suk ject 

L3tter to tke Chairxan and Ranking 

Minority %ember Subcoranittes os1 

Coast Guard and Navigakion. Zouse 

Codttee on Eerchant Marine3 and 

Fisheries reuarding questions thsy 

aaked us to investigate and to provide 

a brief summary of tne results 

. I . 

Talking Paper on the Ilegartraent of 

Energy's Solvent Refined Coal 

Csmocstratiorz Plantas L and I1 w'.iich 

- was rcad into hearings by the 

&.b=o&ctse on Environmerit, Enargy, 

and Natural Resoasces, House 

Cormittee on Goqermnent Opsrations 

- Date 

11/ 18,'75 

11/23/77 

02/23/58 

-- 

Date 

2/10,/80 

2/17/&1

I 

-..-. SYSTEMS DIIVELOPMENT AND ACQUISITION 

t . 

. 

1 

8 

* ; 

I 

' Jaceph C. Boban' 

Deputy Associate 

Director 

275-3469 

LAND/ 

AIR FORCE AIR 

SEA/ 

NAVY AIR 

STRATP.GIC/SPSCE;/ 

SPECIAL PKGJECTS 

I 

HACA 

CIVIL . DOE MT.LCTA'HY 

- _-

For Internal GAO Use Only 

Program Plan For The 

Systems DeveIopment And 

Acquisition Issue Area (3000) 

Program Plan. = IdASkD 

- . 

. . 

- . 

. .~ 

.- . - .. . . ... 

-.. . 

-, c 

. . 

. I .- 

., 

. . . 

.. 

.. 

. . 

GAO 

United States General Accounting Oflice A@ Z.1981

J 

PREFACE 

Tkais documerJt provides overall dirscticn ia GAO's efforts ia 

the systems development and acquisition issx area. It replaces 

the October 1970 program plan for the procurement or' rnajcr systems 

* issue area. 

If you wish to discriss planned oi' ongoing work; or Ff you 

have any questions related to this issue ama, please ccntaci: 

Donald Day, Senior Asssciate Director, Room 5478, GAO Suildiny;, 

441 G Street, X.X., Washington, D.C. 20348, (202-275-3504), or 

Joseph Bohan, Deputy Associate Dissctor, (202-275-3469)

1 DIRECTOR'.S SUMMARY.. 

Trend and Future Outlook 

Strategy for Selecting 

Assignments and LOEs 

Planning Future SDA Xork 

Regional Office Suggestions 

Statistics 

Specific Accomplishments of SDA 

Actions Taken on Previous Guidancs of 

the Program Planning Comdttes 

2 ISSUE AREA STATEMENT 

RREAS-OF-CONCERN 

LOE Crosswalk 

- Page 

3 PROVIDING THE CONGRESS WITH INDEPENDENT 

EVALUATIONS OF ACQUISITION PRCGRAMS 

AND PERIODIC EVALUATIONS OF AGENCY 

REPORTING SYSTEMS 20 

1 

2 

6 

6 

8 

'9 

lO 

13 

14 

le 

. 

4 DETEWINE: THE ADEQUACY AND EFFECTIVDESS 

OF AGENCY EFFORTS TO REDUCE COSTS AHD 

INCREASE EFFECTIVENESS OF ACQUI- 

SITIONS 33 

5 DETERMINE TEE EFFECTIVENESS OF K ?GE- 

MENT STRATEGIES USED BY FEOERkL AGENCIES 

FOR THE DEVELOPMENT AND ACGUESITIOX OF 

M O R PROGRAMS. 47 

6 . DETERMINE THE: ADEQUACY OF TECHEXLOGY 

BASE ACTIVITIES TO SUPPORT DEVELOF- 

MXXJT OF MAJOR PROGUS 60 

APPENDIX 

I 

I1 

I11 

IV 

V 

FY 82 Defense Budget for Major Syztems 

-'Accomplishments Dqring the Periad 

October 1979 to March 31, 1331 69 

Interrelationships Between ana Cther Issue 

Areas 73 

Major Completed and Ongoing Assigk-ents 

LOEs 3008, 3009, 3010 79 

PPC Session on MASAD'S Progrm Plan :for 

the Systems Development and Acquisition 

Issue Area (PPC-81-12, 4/28/81) 86 

tje

CEFPTER 1 

DIRECTOR* S SUMMARY 

L 

Tkfs is the groqran plce far the Systems Development and 

Acqdisitien Issue Aroa. The essential elements OF this plan 

weze k the Procurement and Systems Acquisition Division program 

plan for "me Bracuranent of Pafor Systems-Issue Area 

38061'. Tnat plan was approved by the Pragrun Planning C c d t - 

tee on August 2, 1979. This new plan updctes that plarl for 

major civil and defense prcgrm and reflects organizatio?al 

cf-mges to better emphasize 'csrtairr acquisition activities 

rela+sd to defense work. 

On December 22, t%C, the Captrollerr General asprored. a 

recrgsnization which, axaq cthers, realigned responsibilities 

of PSAD and of the Loaistics and Ccrmnunications Division (LCDI. 

Eevised divisions we& fomed and the Mission aalycis ana 

System Acquisition Division replaced PSAD. In essence, WSiD 

gave up the "General Procuremeat" function and acquired the 

fail "Connuunications, Intelligence ana.ADP wcrk related to 

tactical, nonkactical , andl (lata c~*~icationsl' mis fmction .. 

was formerly in the LCD. 

MAsA3 consists of thrsae subdivisions: 

Systams Deveiopitent snd Acquisition. This subdivision 

combines tfie rssFonsibilztaes fornrerly carried o'it by 

two Groups: namily the Acquisi'sian Manacjement Grorzp and 

the Reseazch and DeveLopaeat Grmp. (Xssue Area 3000) 

Mission Analysis. %is is a new szlhdiviaian whs= 

respcnsibility 13 to ascertain that WL's new systems 

acquisitions do, in fact, aadresa deficiencies in 

perceived and postulated threats. It deals with lxqer 

term capability of new acquisitions to fill cuzrent 

and future gaps in mD mission zeqcixemests. This 

function was formerly carried out is the Acqiisition 

Mznagemenc, Group. GAO's ability to perfom such 

analyses has been growing in rscant years and 

it was considered timely to rscagxize this by setting 

u? groap to specialize in such analyses. A new issue 

area is being established to deal with this area 

and is scheduled to be presented to the PPC on 

September 28, iS81. 

1

I 

Communications, Command, Coa-crol, inb Intelligente. - 

This subdivision was composed by the transfer from 

LCD of the groups responhle for Issue Uaa 3700 

(Communications and Intelligence) anc?. Defense 

related ADP (0100). This issue area plan is tc be 

presented on July 20, 1981. 

This plan reflects the foregoing reorganizetion and i9entifies 

areas-of-concern and the linee-of-effort and relate2 

project assignments which we Dslieve w ill best address the 

Systems Development and Acquisition wcrk during tlne aart 18 

months . 

SYSTEMS DEVELOPMENT AND ACQUISITIOB 

This can be described briefly as tbe sequ6nce or' actLvities 

starting with an agency's exploration of altsznative 

systems to fill a void and extonds t'lrcugh to the inrroduction 

of a system into operational use or otherwise saccessful 

achievement of program objectives. (See majQr acquisition 

cycle, p. 13.) We believe that systems development and 

acquisition activities are synonoreous with system acquisitions 

as carried out by the fanner Acqcisitlon ESanagkent 

Group. Therefore, tMs SDA Frogram plan will use the FrevLously 

approved PSAD program plan lines-Qf-sffort on system 

acquisitions. Through a crosswalk table, depicting each of 

the previously approved lines-cf-elfort (see .De 161, tLbis 

plan furnishes the transition to the proposed Systems Dcvelcg- * 

ment and Acquisition MEs. 

Major defense programs are defined as those with cn 

estimated research, developmeat, test, aad evaluation cost 

exceeding $100 million or an estimated proeaction coat exceeding 

$SO0 million. Civil a3ency defialtions or' major 

acquisitions vary in each agen-7; but the dollar expenditures 

are significant in relation to the agency's budget. 

For the past several years about 20 percent oL the mnwl 

Federal budget has been spent thzbugh the procurenest process. 

The original fiscal year 1982 bcdget antic:-pzted spending 

about $69 billion on research, development, and acquisitiox to 

support our military posture. Tbls included abet Sf0 billion 

for the procurement of weapon systems and other dlitary equipment 

and supplies. (See Appendix I.) Subsequent to preparation 

of the FY82 budget, the new acministration aCded $26 billion, 

of which $20 billion is for the development and acquisitior, of 

additional quantities of weagons . 

2

Civil aqeacLes, State, and local grantee agencies also use 

significant amounts of Federal funds to acquire major programs. 

In a recent raport (MASAD-81-13, March 23, b98f) sone 1040 major 

acquisitions {mifitary and civil) then in various scqaisitloa 

phases were estimated to coat $777 billicn at ccmpleticn: 

The new adminiettatioa has identifird it3 mmber one 

priority as impravhg the posture of U.S. milita-zy forces. 

TQ this end, a substantial increase in defense sperding, 

includhq funds fcr new or additior,al major weapcm, is 

expected to -take pLaca durins the next ?our years. =on9 

with the emphasis on increases in defense spending, is an 

all-out effort to identify L-eas, including major civii and 

defense acquisiticno, where bidget cuts can be efficien:ly 

mad@ 

tl 

' 

The Degar*aent o€ Defense announced on Feariary 18, 1981, 

. some goals to cchieve efficienciss, economies and management 

improvements. Specific area3 cited by DOB incluh: 

- Elimination of my waste-and cnnecessaq 

aetivitiss . 

I 

Pu~chasing'efficiencies. 

- Elimination, cancellation or reduction of 

marginal. weapons systems whether opsretional, 

under pzccurement, or uader developnest. 

- Elimination OLI i-eductior, in narghal sxpport 

proqrucs 

These same goals are inherent in our @acned work acd 

any specific programs ini.tiated by Defezlse co achieve or 

measure progross tu thesa goals would be included in cur 

future work. We believe that this a,anou,?cgmenf was inflnenced 

by the Cmgtrollsr OeoeraL's Letter of Jauary 21, L981, 

to the Secretary of Defense which proposed 15 agenda itms 

for significant magement improvements and cost reduction 

opportunities. (See p. 37.) 

MASAD'S role is that of an independen-: evaluhtor of 

major agency acquisitfons. Although mrlrst 3;'ederal agsccies 

conduct internal avaluatLons, they tend to be parochial, 

bxnded by the cbjsctives and limitations of the zgsncy 

concerned. Ou: role includes khe surfacing of issues Ly 

reviewing major acquisitions and providing this infosnation 

in a tinely and useful manner to the Coriqress. Myljcr 

3

program acqt;isitioa.s are by no maas routine procurements. 

Each is a uniqae campier enterprise eccmcanicd with its 

own arguments, eonsiderations , opinions , and acquisikien 

strategy. nos& aze suceptible to unique and unanticipaeed 

management, techmlogy, or funding problems. We believe 

that the GAO -anst$rcwide full disclosure of these issues 

to the Congress m a case by case basis. Generalizations 

on the other hand are little value tu the Coagress. 

MASAD also Mependently selects many cf the maior 

acquisitions 31: issues on wnich. it reports. Again, inany 

are based on staEd.Fraq commitments, specific congrssstonal 

requests, and %he perceived needs of the Congrsss. Whether 

our product is in wcitten or oral forir its Furpcse is 

to provide the Cmqxess and agency officials with timely 

and objective bfozznation, conclusions, ar,d recornendations 

that will aid aem in carrying out their resFonsiSilities 

in an efficient eni effective manaer. Making our evalrrations 

available to the public whenevef aossiblo is anuther 

benefit of OUT pres=- in the lnajcz acquisitions area. 

The details of GUYS role in this issue area are mads plrin 

in the objective(s) of each line-of-effort in-this prsqrzm 

plan together vie the specific areas to be aedressed in 

. achieving ow objes=tive(s) 

SDA's objectives, for the next 18 inanths, are designed 

to concentrate on foux current areas-of-concern. They are to 

(1) evaluats ledexal asency acquisitions, (2) determhe the 

adequacy and effectiveness of efforts to reduce cost a d increase 

effectiveness of major systacs developsent and acquisition, 

(3) determine the effectiveness af managaenf strategies, 

and (4) determine the adequacy of reseasck programs 

to support major acquisitions. These are discussed bciefly 

below and fully in chapters 3.. 4, 5 and 6. 

The portion of the defsnse budget spent on acquiaitiocs 

dictates that we continue to clcseiy scrutinize indiviriual 

major acquisitions in military deparaen2s acd civil agencies. 

In calender year 1981, we categorized 23 assignments associated 

with militazy prsg~yns as indiviaual sajor waapon reviews, 

io@. that group af reports issued in Jsnusty or rebtuary 1981. 

Future efforts would approxkate our 1981 level cf effort. 

This work has been most ussful to the Cungrsss and it provides 

the press and the public with an assurame that major progruns 

are being exaninad by an independsnt egency, In past years 

this work h3s carried a priority gL. 

4

It should be noted that while our individual systas work 

constitutes a major portiqr? of our work and is treated as a 

package or blcck of reports, the specific assigments in that 

package a.re carried out uder various LOEs and various creasaf-wncem. 

The reason for this is that as a syttcm progresses 

is the acquisition cycle o*xr wrk becomss more specific and 2- 

be carrried out under an Eo2 which addresses t h Sroblem baing 

pmsued during a particulsr year. E'er examp%e of t b 20 idivi&Jal 

weapon rep- we plan to issue in etr:ly 1982, 17 are 

under tSis areadf-cencsm, five are under one ME and 12 

are under a second LOE. 

We plan tc agend 48 percent of our effort ia this areaof-concern. 

A second area of lnajor concern deal3 with what we belfette 

io a severe urzhalarnee between perforreance of equipment on one 

side and utility-reliab~lft~~, avaihbility, ntbtainability, 

and human operability-on the other side. mi3 tzend was annaxaced 

in our Octoker 1979 plan and, while.GA0 ana zany others 

have perfcmed work in U s area, serious problems zemain end 

are eqected to continua for same the 13 the future. Our 

piarmed efforts center on revisa3 WZs desiqe9 to (1) bels 

insure adequacy of Frogram trsde-Q5f decisicns a d (2) stress 

inqcrtance of tests and evaiuations to make sure that reliabxlity, 

avzilability, maintair-a'silit.,r, md hunrarr factors ka77e 

beex adequately considered. 

We 'plan to spend 13 percent of our er'fort id1 *his area. 

A third major area of SDA work deals with the nanagcxent 

sf the development and acq~i3~tion of major systaas. Existir,g 

policle3-Cir~lar -\-L09--provides a sound franework for 

successful identification, developraezt, and acquisition of 

program to fill spocif ic ne=ds Resent evexa, however, 

casts same doubt on how fmxer'ully the ex%cutive branch may 

be in further Mlementation uf them policies. Xe believe 

it is critical for SDA to monitor sveats and make sure thar 

efforts of the past years are not &andoneit under gsessure. 

Cn the other hacd, the trend i3 clsar that innovatiJe processes 

must be pursued ?=o help reduce Cast, csmplexity, and the 

tiareframes inherent ir, current acquisitions. In addition 

to existing LOEs, 'SDA has establlshod two new LOEs to deal 

4th the trends to iqlment inaovative acquisition strategies. 

* Wt plm to s?ead 1-2 percznt of our effort in this area. 

5 

2 a:

Our last area-cf-concern in this plan deals with the 

adequacy of technology development programs to srpport the 

timely development 3nd acquisition of major progrm in the 

Departments of Cefense, Energy, Trtnsportation, asld the 

National Aeronautics and Space aAministration. Based ora current 

trends we expect to concentrats efforts on areas suck 

as t3e capability of the DOE nuclear: wecpon coqlex to 

develop and producs naterials to meet projected needs, mltiagency 

technology development progrisns, and adequacy of 

technology programs to support agency needs. 

We expect to jpend about 12 perchnt of our effort in 

these areas. 

The balance of aur efforts, approximately 9 percent, 

will be spent on XOR-LOE assignments pt-ily related to 

planning assignmeats. 

Strategy for selecti,lq 

assiqnments and LOEs 

For the upconins Flannins period our.stra+egy for select- 

Lng programa/pro

L 

Planninq work on major acquisitions has historizally Dee? 

one of joht pianning betwesn headquzitters and regiocal offices. 

M w h of the time this incladed assembling representatives from 

the :eqior?s a d headquarters at annual conierences to discuss 

the airectiloa of effort and specific assigmefits. Many times 

there was parrkcipation by agency personnel an6 others.. OUP 

uock plan is coordinated annually with stafr'seplbers fro= key 

committees and they aft! kept advised of events as work progresses. 

Our April 1979 annual conference included particigation 

by tepzesestatives from ouz regional crffices and sistat aqencies 

C,2St CEO, an4 OTA. Our April 1980 conference was attmded by 

repsesentati7es from i~volved Regiencl Offices. At that confeeence 

ye convened a panel of Defense experts wale critiqued 

our wotk and offered-saggestions as to how we could inprove 

our work in the future. 

Selectzi MEs xere also the subject of disccssien by the 

tomptrollez Genezal's consultant panel for delense at a 

meeting on Zebruary 28, 1951. Tbe proposed gim refleets the 

concerns of the panel which center on reliability, maintainability; 

operability, inflation and the acquisition process. 

Althcugh involvd ZZegiQnal Offices have always participated 

in plmning it kas not always beezl in a formal 

manner . Xevertheless, we rely heavily on the expestise 

Of Regional Off ices and headquarters personnel to contzibute 

ideas based 00 their evaluation and analysis of existing 

assignments. As a resuit o€ past ana preseat assignments, 

they nave developed an expestise at kne management and 

evaluator levels in the regiom that we believe wiil continue 

to help provide tbe right foccs to our planned work. 

Vie have also held conferences below the subdivision 

lev& In which the regional offices W~PS heavily involved. 

At these conferences specific assignmnts and plans for 

futue assigments at the group Qr organizations, area 

of cesponsibility are discussed. burin3 calendar year 1980 

four such coderances were held concerning: 

--Strategic Missions and Systems Group Conferences, 

August ll-15r 1980. 

--Tactical Sea Missions and Subsystems Group 

Conference, October 15 1.980 

7

i 

--Tactical Land Warfare Group Conference, Novembez 

la & 19, 1980.' 

--Tsctical Air Warfare 2,lanning Gzoup Conference, 

Decembez 9 .& 10 , 1980. 

The foregoing conferences pzmided the planning necessary for 

OGE current assignments as shown in this pian. 

In preparing this ~lan ws contacted those Regional Offlices 

where frmt end goals were established and they have providea 

the followiag suggestions. 

Reqional Office Suqgestions 

There are a number 02 R-?gional Offices which hare zlways 

aade a mejor cc.mmitsent to GW's work on the deyelopment chd 

acquisitisn of major systemsl As indicated earli=s, these 

regions have been deeply inmlved in planning work and their 

contributions over the Fast 10 years is a matter of zecofd. 

Recently, actions have been hitfated which are designed to 

bettaE.capftalize6 on tCe sltrrngths 02 the field staff in pr6- 

gram plan development. As ?a:t of these actions n~st of the 

involved Regional Offices havs established front-en6 staff 

day goals and designated key :egional people to be responsible 

for program planning and wozk related to thz SDA issur area. 

These regions anticipate that even greater contribGtions cen 

be made in the future partixlarly at the lina-of-effcrt and 

above level of planning. Ssversl ricurring themes related 

to defense work were noted in the Regionai 3ffices. input. 

Of these, tne tbemes which came ug most frequently are 

(1: increasing complexity of weapon systems, (2) need to 

increase reliaCility/maintainability of wecpon systems, (3) 

increzsed attention to manlmachine interfaces, and (4) 

shortages of critical materials possibly impacting the 

development and acquisition of weapon systems. 

Specific suggestions include tho following. 

(13 Suggest the fcllowing question be included in LCE 

3054 which deals with adequacy of tasting and evaluetion. 

'Do test objectives provide for testing and eraliration 

of man/machine interfaces including evaluation of (1) 

skill lzvels needed by operatima' Fersonr.el, (2) 

reliability, and (3) maintainability (simplicity of 

design and accessibility)?" 

8

c 

(2) Suggest the f-2llowing questions >e eddcu to LOE 3006 

which deals with impmv-aents in tire acquisitisn process tc 

reduce cost cf ownership of systems. 

*Bo decision and ccntractual dscments. eqlicitly 

require consideration of man/machina interfaces 

ta reduce systera complexity and increase reliability 

and mahntaina5il ity 3 * 

"Is program management structured to provide oversight 

and assurd that man/rsachine intezfzces are 

considered duzing developent, test and evaluaticn, 

Sy ail acquisition levals--user cantractor, and 

program pezsonnel?" 

*Is adequate consideration given, eacfy in the acquisition 

process, to manpower and logistics neesis 

to assure development and deployment of effective 

systeols? 

(3) Suggest consideration be gi-aen to establishing a LOE on 

the adequacy of planning and manageneat of critica2 materials . 

to sugpozt the developmeak and acquisition of rnilitazy system. 

(4) Sdggest a nsw line-of-effort (EOE) be established tc address 

adquacy of the nangemect of development and tcquisiticn 

of softwar2 and related equigment for weapon systems. 

Exept foc the last suggestion, all have been inccrForated 

in the prcposeci plan. We will eddr2ss software acd related 

equipment as an integral part of OUE schsdr?led reviews. 

Eegazdins civil acquisitions we asked all regions for their 

ideas as tc potential work ir; thir regions. Input was received 

fsom seven. It is our plan tc achieve a level of ccordication in 

tnis area at least equal t3 that expected an defense work. 

STATI3TICS 

Resources (staff years) expended by Di-qision in the 

Procurement of Majcr Systems issue area in the la months ending 

March 31, 1931 were: 

Division Primary Secondary 

CED . 

EMU 

?GiSD/LvMD 

8.8 

3.1 

0.4 

9 

e - 

L >- 3

GGD 1.7 - 

SPE - 1.4 

LCC/?Lm 6,9 

PsAD/P!sw 319.9 I2 a 3 

- 

Total 323.6 33.4 

In the 18dzanth period approxhtely 49 percent cf our 

work was in the basic legislStiv2 respcnsibilities category, 

abaut 35 percent in the stznsng cmmitments category, ad 16 

percent in M ttee maimcan category. 'ihe reason that requests 

Srom Cumnittee Chafmen is net higher Is that eur coor3ination 

pmcess with the cdttees' staff precludes the need for specific 

requests. As mirntioced earlier our Lndividual systems zre 

priority +1 based on a stzding commi*aent tc &&e Congress. 

Saecific Accomlishments of SDA 

DurinG the period Octcber 1, 1S7S to March 21, 1381, 

we have issued 192 repo-%s relating to the Proccrement 

of Major Systems issue area. Recipients of these reForts 

are summarized in t5e foflovicg table. In addition to tke 

reports issued, we closed 24 Cangressional rqaesrs by 

tescimncy, oral, or informal c-unications during the same 

period . 

Reports 

October 1, i979 

to 

March 31, 1981 

To tfie Congress 47 

TO Committee or Sub- . 

committee Chairaen 

To indiv5.dr;al Mgmbers 

of the Cmgress 

To Agency/Department 

Officials 

28 

22 

In the systems developent and acquisiticn are-s we 

prccessed i4 accomplishment reports relaticg to the 

Procurement of Eiajor Systen; issue zrea during the period 

Cctober 1979 thru March 1981. These azcoxqlisfiment reporks 

are sumcari.t,ed In the €ellowing table. (Also, see Apperidix 

10 

.

Type 35 AccammLishnent 

Measurable Savings-Recurring 

Doi 1 ar ;Inot.int 

(Millioa ) 

H,IA 

Savings not neasarable 

Other benesits 

Total 

6 

3 

- 

5 

P 

14 

$207 e 6 

N/A 

$/A 

s m 

Ocr practice fot the past several ~ L-S has been ta armually 

brief staff ~edwrs on QU ana%ral -mrk and other onqoiag assignments. 

Our last sa& briefing was presented on Navemter 6, 1980, 

to apzrosimately 25 staff members representixg 8 d-iffsrent committees 

* 

- Questicns EesexiW to Committees 

Oar practice has been to provide intsres+ed saxnittees witk 

pe&inent questions for use i;l auaorization and apprcpriation 

heazings. Our most recent packags contaising over 500 questions 

was furnished in January 1981 to 3taff directors o'f the principal 

committees. 

Actions Taken on Previous Guidancz 

oC the Proqzam PlazaiGq Comnittee 

On k~gust 2. 1979, the fsllawing PPC guihncs/comneats 

relatire to Systems Development and Acquisiticns were provided. 

. 

1. Revise and Coordinste the LOEs on RbD Raizaqement 

and Technolog-] Issues with OP?. P.is was zccompbished 

before issuins PSAD's October 1979 Pzesran 

Plan. Purthet, as a Gesult of SuSdivhion re-- 

a;bigmeEt, the three existing LOEa on R&D Managemeat 

and Technology afe conso.Lidated into one 

LOE in this plan. (See p. 1 and Chapter 6.) 

2. Issue kea Boundaries. The potential for overlap 

in tfie defense area was ,aininizeci as a 

result of our JEnuary 5, 1981 rsorganizatio;;.

Agroements have been worked out with a cumber Df 

Divisiocs. (See Appendix 111.) 

1. Fhe Line Between Auditinq Military Requirements 

and Missio3 Needs. SDA'3 Program Pian no loriger 

identifies missior analysis or determination 

of mission nee& as IAES. The 3ew Mission 3.alysi.s 

Subdfviaian IL~W hts this respopibility. Howeve=, 

SDA will ensure tkat it does not mike judgemeat 

oa military strategy and tactks CP threat asew 

sments. ALL our work will be i=J accord with the 

November 1979 Comprehensive AQdit Manual guidance on 

"Review of Military Programs, I' Chapter 2, cage 1.3. 

4. Multi-Year Contractixq. SDA recognizes the benefits 

Df multi-yeax contracting and will continue to prisent 

this message to Congress. We currectly have ?I 

report in prdcess Which presents t5e benefits of 

multi-year contxacthg on Navy shipbuilding programs. 

Pm-30-6 date6 X0ve-e~ 8, 1979 ''lweclZ~~ent.s +a 

Zeduchg the Costs of Weapon Systems" also adfressed 

problems resuftbg fram funding instability. 

Because of increasing interest in this procureent 

technique on the part of the Congrtss, testimony 03 

lulti-Year Contsaetg was gresonked by the Directqr, 

MASAD, on November 17, 1980, 24arch 10, lG81, "d 

a d Mach 31, 1931. 

5. Development of Nuclsar Weapons by DEE. The PPC'su3- 

gested that PSAD tako a quick "new" look at the 

desirzbility and feasibility of transfsrring 

nuclear weapons developqent to D03. We reported t=> 

the Captroller Gsnrrzl that sucn a transfer Mould 

not, in cur opiaion, be in the best Nationai intere;t. 

Our study did not identify any significant benefits 

of transferring the wclear weapons functions elsewhere. 

(See p. 84, Aspendix 1V.j 

--. 

12

CKFrPTER 2 

SYSTEXS DEVEECPMENT AND ACQUISITIOi4 

1,CSUE. AIGA STATEMENT 

Tht Systems 3evelopment and Acquisition (SDA) issue ateaissue 

area 3600-accounts for all the planned work of the SDA 

subdivision. Tke work of SDA is related to the nejar acquisition 

cycle as fllustzated below in the solid blocks. "Ceployment and 

Gpeza+-ionu activfcies are usiiaily the responsibility of PZBi). 

The two remainin9 activities are nission Analysis activities. 

P?OR ACQiJfSITIOB CYCLE 

~Evaluz'Gonar.d- 1 I 

Reconc i3. ia tfan 

I 

/- 

of n-wd in context 1 

of AGency fission, 

La-,, Resources, Prioritie 

0 -I------ 

i?a-apsd FGZFi& 1 

I . 

-Et 1 

I 

I 

I 

1 Operatimi 

7- 

Produstion 

-.J 

Full Scale / 

Development 

Test, and 

Evaluation 

A Hissior ELeIcanC- Needs Statemeat (Circle A) is S!hnit'-ed 

for approval at this point in the cycle. Approval oE the mission 

ZeeA starts the major system aequisition process by granting 

au2hority to explore alternative system iesign concepts. 

SEA assigmsnts will noanally start at this point. Eovevar, 

13 

/ 

--- - - - - _ _ _

much of our work dealing with Jew acquisitiun Frograms depends 

on whzt nission azzalysis wosk is done early on in the acquisition 

cycls . We will, theref crd, maintain close coordination 

with =ha new FAssion Analysis Subdivision which has responsibility 

for activities related to mission analysis acd the waluation 

a~a reconciliation of ceed. 

Further, we believe it may be necessa-y to do work in this 

area h~ individr;al weapon syatm reviews. Establishing the dssiea 

need for e new acquisition program is one of the most vital 

area3 for improving the systas acquisition process. Therefere, 

wherQ necessary, we may review documents which recoacile ~ eed irr 

terms cf mission, resources, and priorities. 

"DeFloyment and Operatim" activities are ?rsualLy the responsibilizy 

of P-. €iwev=r, as discussed in this plan, iaany 

aetivitias of the acquisiticn cycle relate to the cperability of 

equipcent. Therefore, dose cwrdination between SEA a& PLRD 

will be required. (See Appenbix 111.) 

AREAS OF CONCERS 

15 oirr October 197s plan we made sever21 decisions tkat cs'ranged 

e, 

the thmst of our work somewhat during the current 18 mocth pes$ad 

and for the next several years. Assignments were directed towards: 

--Evaluations of -&e decisions baing made during the 

researcn, developerit, an6 testing phases of major 

programs that have a -?or *act on rtliabili'cy, 

riaintainability, and reac3inesa. 

--&cro evaluations of the acquisitioc process. Racent 

criticism 35- cangressional cdttees an6 complaints 

from agency mnagers are direct& towards the cost, 

ccmplexity, ani excessive timeframes inhezent in 

cuL-r=nt management concepts. 

--Bvaiuations of the scope and purpose of research and 

development in EQD, NASA, and the DOE weapons complex. 

As described ia later chaprars of this pla~, 

progress has been 

made in these areas but mu& rexias to be done. ;?e will, thersfore, 

continue to direct significant resources to these azeas. In order 

to highlight their unpoztance, our sroposed plm sstablisSes areasof-concern 

an3 new or revised lines-of-effort. Oar lines-cf-effort 

have siso been r9vised to reZlect organizational changes and to 

eliminarc LOEJ desLgnated as non priority. 

Ths thrust of ou: work for tbe next program alan pericd is 

reflected iC the following four areas-of-concern. 

14

-Frovide the Congress with independent evaluatloss 

of individual. acquisition program ana 

pexiotiic evaluations of agency reDotting 

qstems. (See Chapter 3.) 

--termhe the aeequccp and effectiveness of 

agescy effotts to r.3duee total costs and 

- -crease tne effectiseness of major acquisitions. 

(See Cfiapter 4.) 

-Determine the effectiveness of the management 

strategies used by Federal agencies for the 

deoelopaent and acquisition of major programs. 

(See Chapter 5.) 

-atermine the. adequacy of technology base &/ 

activities to support development of sajor 

programs. (See Chapter 6 .) 

Each SDA azsa--Sf-CnnceZn is discussed i:l subsequent 

chams of this plan. 

"dre following crosswalk table (Table 1) shows ehznges to 

our LOSS due to orgznizationaf tealig-meats arid those made 40 

reuqaize changing priotitiss in our WOPIC', 

- L/The technology base activitias encompass the earliest phas2 3f 

the aquisiticn process, including basic aid applied research 

programs. Basi: research provides the fm%mentsl knowledge 

and applied research uses this knowledge tc detsrinine where 

it cail be applied. 

15

I 

b; 

? - 

.* 

Y 

.: 

z - 

cs 4 d 

t 

Le 

d 

. 

I 

i . 

t~ 

i i ' 

c 0 

(P 

4 

4 

c. 

- 3 

16 

4

. 

I I 

SlAfF YEARS USAGE 

Actual 

PLANIIED ACTUAL IO/Ol/t10- 

- 

AREA-Of-CU13cER.t 

TAULB 1 (CONTINU&D) 

UElEAHlNE TIL AUEQIIACV ANU KFFLCIIVENESS OF 

AGiNCV EfFORlS Id REDUCE TOIAL COSIS AN0 

INCREASE EFFECTIVENESS OF MAJOR ACQUISIIIOHS 

I 

I 

I 

i 

I 

! 

1 

I 

33 311 3.7 3W6--What CIII be done durlng the -e evlsetl LOE--bat Is hIn done 9.5 15 

acqt,lsltlon process to reduce the 

b~dcvelopmenl an8 

total cost of ownerrhlp of rysleinr? rcqulslllon process lo achleve 

lhe proper balance by trade-offa 

between deualopuieIlt 8114 ocqdrb 

tlon costs, declbti tn cost conrtrrlntr 

8nJ dbnerrhlp costs 

yCt ItlBhb~~IrI Jht)U3te SyStJn 

perfannrnca 3nd operatlcnrl 

crf fact 1 ~ mersl 

15 2 a. 7 3001-1s adequate conrlderatlon brlng --c Dro ed a OA 10E ahls ulll be 3.9 

I , 

NON- 

"E 0 

U 

glven tn the ewpecbed vulnerabllltr -hiit ins trade- 

and rurvlvoblllty uf ryrteiur Jut lag 

the rcqulrltlon) 

I .6 M54--lo what extent Is testlng md-k 

evaluation of acqulsltlonr effectlvely 

* planned, conducted, re nrted and conrldared 

la declslon naflngi 

bit ddCl8lOnS IllIdW the &V&? 

LO€. 

!P? 

--Add "And. what IC bolnc) 1.7 

one n Development rest ,nd 

fvaluatlon and Oporatlonal Tort 

and hvrlustion to insure tho% 

re1 I ab! 1 I ty , avr I lab I I t ty ma In- 

Laliiabllity, and human rr/labll- 

Ity requirements are belng met?" 

NOH- 

I LOE 0 0 3055--Uhal steps are balny taken to --C Ora aed as SUA LOC--This work I$ 

ensure that acqulsitlons wlll see1 &~~caiuwnlcat Ions, 

the comnond, control and camnunlcr- Conmar'd. Cnntrul and Intel I lgence 

t Ions requlreinents of llielr hleqddd subdlvlslon of HASAD (Issue arm 

envlronnient 1 120!)). . 

NON- 

PLOr 0 0 305G--Ulrrt cdn be &ire Io niliillnlre --e %ped is SUA- LOE--ht:s not 

unnecessar ouerldp, dupl k at lun, and warrant dl specfk LOE. 

proliferation ol system1 

Mew LOE--Ones plani~In) for &.(or 

acqumblnns adeq~ately canslder 

potentla! crltlcal mierlai 

lortigas on system cost, sdie- 

JuIe,anJ perfnrnance porOs? 

?? !!! 

SOUIIOIAL 

-- 11.1 -- .in 

- 

0 

0.6 

20

.. -_- 

._ , - _. 

...................... 

..__._ 

....... ..-........ ... ..- 

.. __ ..._...-_.*.- 

......*..-_.__-.. 

.......-. ....-...... . . --. ... . ., . . . . . ~ 

-. 

. ..... -.... .e . . . .._........-..---.- " ............. 

TABLB' 1 (CONTINUED) 

PEA-OF -COIICEAY: 

DETfRHlNE TIL fREClIINESS OF TllE STRATEGIES 

USfO BY CEDER& AaEWlES FOR TllE OEVElOMWT 

AND ACQUISITION OF HAJOR PROGWS.' 

PLANNED 

FV 1980 

Prevlour 1OE 

Proposed &Of 

M 

111 

li 

e -' . 6.7 

0 0 

3WI--Whrt has been thr lrprct oC - ~ - E l l m l n r t r %nd 3.6 IO 

WQ tlrculrr A-109 and other wnrp 

o er unrgemnb- rtrrtrglrr.b a 

mnt rtrrtrgh on rcquiritlm kgrrr to LOE 8 bvr barn 

programs ln tom of halpln frdrrrl drvrlo rd In order to lrcr 

rlphrrfi on othrr rtratrglrr. 

8 nclrr rcqulrr rybtrm whkh ara 

r~ordrblr, rrtilfy tho nicd. end 

. whlch r n rvallrblr on tld 

3 

d 

I 

a 

I 

* E--- 

thq Daienrr 

Y I.OE--lr 

pcrtarnt tnd ltr cqonentr' 

requesting mult lyrir contrrct- 

In9 ruthorlzctlor lor wrpur 

'steins khcre rdvrntrgcour to 

. 8h Governnnt and hrur rerulta 

been bencflclrl lo thr 

Bovrmncnti) 

5 

J 

I

- ..._,__ __ - , . . . . , . . . . ._. _.. . .. . . ...._... . , . . ... ” .. . ..... .. .. . . . .. ._. - .. . ... . - . . ......----I--..- 

...I. I. -.-I--. - .. .- 2 

.. PLANiJED 

. FV 1960 

---.t- 

14 . 

12 

10 

7 . 5.5 

I rrtd4cr 

3W--Hou can tha mnrypint m (. O.# 

ovsr~l ht of tachnolo 

iu+roue 

Reulrsd LO hrr tk nrnrgi- 11.1 26; 

man ri; overrf~tt cb tu&ndo$V 

brra program inrubso that tach- , 

tdr urtdy ruppork ng duion agoncy a nology IU~OUKII r.m bclne urrd 

ntr a $1 

On thr IIHJJt rlltclrnt md rflcttho 

mnnar an4 rupport thr 

rkvdopumnt md rcpuhltlon kt 

8 3, a 3010--Arr rlrrlen rgrnty trchnoioqy rgency program? 6.1 

~NSM C~IOU~CII bjlng urd In tha 

17 4. I 3QOS--Arr hcbnolo (r base program /--- 

mat rtf iclant and rl~cc”rvo mnnrr? 

.A% m. -. -%m& &L .a 

I

.. ._ , 

-MZA-OF-CONCERN: 

Proridicg the Congress with independent evaluatiors 

of acquisiticn programs and periodic 

evaluations of agency reporting system. 

GAO annual reviews of major weapon program began in 1969, 

when the Congress caiaed upon GAO to report on the progress 02 

various indivlsual mzjor weapons acquisition programs. The purpose 

was to fill a vQid which exist& and was kc! provide cmmittees 

acd mders of the Congress with more reliable information 

OR which to base judgment concetning issues involving its 

oversight and legislative functions. This annual recurring wcrk 

has besn performed as priority tl work. As indicatad in Cwapter 

b, work on this 3roup of reports which numbers about 20-25, is 

carried out ur;d%r this and various other LG%s. Ia 1973, we bsgaa 

reporting similar iafonnation on civil agency programs as priority 

2 work. All of our other major acquisition work has been priority 

2 uaitss a specific congreasiondl request i3 rsceived. 

The magnitude of +&ese acquisitions is shcwn in MAsA3-61-13 

which identified 186 aajor program in defeme having 2 eotal cost 

of $437 biLlion ad 854 programs in 30 other Federal agencies which 

have an estimated ccst of $340 billion. In that rewrt defense 

programs are classified as major if acquisition ccst exceeded 

$300 million and civil program il they exceeded 225 million. 

Obtaining objective information on the staftis, progress, z.nd 

fasues of individual program for whish Ztlnds are baing requested 

is still a key zoncezn of the Congress. T5r Congress' need for 

this information is time sensitive an6 it must be available prior 

to the annual authorization or appropriation requests by the 

executive ageacies for funds to begin nsw programs or continue 

existing programs. 

Since we began reporthg aniauall'y on majar defeme systems, 

there has been considerable -hprovemen'r in POD'S externab reporting 

systens. For DOD programs this includes Selected Acquisition Reports, 

Congressional Data Sheets, and Descriptive Summaries. IA recent 

work GAO has fcmd most: reports to be pro?erly prepared kut also 

found m y instaaces of incomplete, Itrislea&hg, and/or outdated 

Bnforaation in reports submitted to the Ccngresa. The issues 

involved art the accuracy, validity, timeliness, coqleteness and 

value of the hforntation provided to the Coqress on the cost, 

schedule, aad performance of major systems. 

Two lines-cf-effort are included for this area-05-conrerz: 

--Is the Ccngrecs being propided w ith accuratk, objective 

znd complete informatien on the status and sigcificact 

issues concecninq systems Lor which funds are being 

requested? 

-40 what extent do systems currently being acquired satisfy 

the apxxy'c approves progran perccrmance thresholds? 

20

.. 

LOE 3co1 

UEZ+W-ZFPORT: 

Is ths Congress balcg provided w ith accuzste, 

objective, an9 coqlets infamation cn th= 

status and sigrrificant issries ccncerning 

systems for which funds are beicq requested? 

e 

Ea& ye%* a major porti.cn cf the Federal kudgste is spexzt on 

programs which require years to develop, have hiSh 

vzs&d~~~, and kave a high total cost. Sucn program aze *de 

as!@dkLon 0% multibillion doLlaz ma~o systems 3s well d , ~ 

aqnltion Sy ci7i3. agencies to carry out ixqaftant r,atio;lal 

prqm.ns, sogo HASA's Space Transpatation System a d COE's coal 

ugmlEfia5an plants. 

under this LCE is in tkree catsgories. 

1. r0 provide annual reForts tc the Congress on the 

mens and sibificmt issues concerning selected 

agepcy programs to support znnual authorizatior, 

and appropriations deliberz&icns. 

2- 'lo pmide the Ccngross with an annual infamation 

regert on the rnaqait-ade of Federzl .mjor acquisitias 

Ipighlighting viyal statistics. ' 4 ' 

3- l!o-periodically review and evaluate the validity 

an caupleteness of isr'ornaticn pravibed in apency 

repa to the Congrsss. 

Cimcwork on individual acquisitions is desqne6 to con-' 

-ban systems/projects and to highli& key issues as 

t&a p + r q satare. Work on new major acqcisitiaris is usually 

pz5anmd undes this LQE. As the progr-mts successfully pass 

aLtkaL a-sition decision points, our work is 8isected ta 

new issmes azd that individuai system work is performed mCer 

e LC2Eis which address the issues being developed. By antick-the 

- 

needs of the Congress in this ares, GAO kas helped 

to- adequate Corqressional visibility on major accpiaiticns. 

StaE€ cm these assignmentsr whether in the field or headquarters, 

prepared to brief staff of Congrassiozdl committees 

The key committees have made exccensive use of our 

rqzzrts .a& have indicate3 a continl;ring need for this type of 

a- They have also expressed aspreciation for the 

on major programs which we also provide on m annual 

basis, 

, 

?li&swork is of a racurring nsture and t?e issr;es ct?nte.r 

ozi t33 SiauEdness of the underlying analysLs arid resu1tm.t 

d&prms at all aoints of the 5-10 or 15-year acquisition cycle. 

Tbes~ Mvid.;lal rsporto also serve as a badis for identif-fiag 

anddis;tlos . i11g not only the issues on aa individual system or 

21

project, but also broader issues such 2s the adequecy of plan- 

Eing t ptantial for changes in planning, and otner changes that 

may be needed in acquisition practices. 

'Phe quality of information presented in reports prepered 

by vta~iSus agencies on a quartzrly tr annual basis and provided 

to 'Lhe Cbngtess to support budget requests is mother issue 

under this LOE, 

The thisd issue is our znnua?, repozt on the financial 

status a€ ~ j o civil r ptojects and defense systems being 

ccquired by Federal agencies and departments. This is the 

mly docment in the Government which presents stztisties ora 

dl major acquisitions and we have been told by Congressional 

stafe me;ir;befs that it allows then to quickly dsteraine the 

:easm and magnitude of cost increases in Pedarai acquisitions. 

IC the past this effazt required about one staff year of effort 

annually, 

Obi ectives Under 

Existing 21~n 

The objective of the existing LOE was to examine the accuracvalidity, 

completeness, timeliness, and vzlire of data reporled 

to tho Coslgrzss on systems being acquired. The specific . 

questions to be addtesserl ir. achieving this objective were: -/ 

1. Are the congressional committees satisfied with thi 

tepcrts being provided to them? %hat, in their opinion, 

are tte major stottcomings in the reports? 

2. In what form is the information being pressnted to the 

Coag r ess? \ 

\ 

3. What acquisitions havz had shortcoaings ir, perfornanca, 

. experienced excessive cost growth, and/or experiencsd 

sisnificant schedule slippage? APS changes in cost, 

schedule, and performatce substantiated? 

4. Axe original estimates for program baselines, schadilles, 

a d performance adequately disclosed to the Congrass? 

5. Is the baseline infomation adrqua:e to explain the 

primary characteristics of the systea? 

6. Do the reports submittsd to the Congress reflect all 

changes that have occxred fram the baseline? 

7. Are deficieacies adaquately explainsd, iinz are thy 

reported ia a timely manner to the Congress? 

8. Arc adjustments in the data mads aPtes it is originally 

prepared an3 before submission to the Congress? 

22

9. Is the information relevant? Dues it provide in-fcmation 

on the real issues? 

10. Is the information presefited in a concise and clear 

manner? 

I 

Cj 

11. Is the information presented misleading ur heerrect? 

12. What improvements could 'cs made in presenting infarmation 

to the Congress? 

Results achieved under 

the existing program plan 

Of 24 individual weapon system reprts provided to Congress 

early in 1981, five were perforned under this pAE. The issues 

presented in each of the 24 reports, and our recormendations to 

the agencies or the Congress, afe summarized in WAD 81-26, 

May 14, 1981, entitled "Acquiring Weapon System3 In A Period 

Of Rising Expenditures: Implicatians Fer Defense Hlar,agsment". 

The report points out that rapid growth in defense expenditures 

in the next few years makes it especially important for the BOD 

to exercise tight control over the devefcpment bnd acquisition 

of weapon systems. "'he gFograms, issues, ,and recamendations Zrom 

that summary report are presented in table 2 (See PI;. 27 and 23.) 

Concerning report systems, the specific issues invoP7ed were 

the validity and completeness of inf3rmation in report= suhni-zted 

to the Congress to support the agency's pcsitions OR major programs. 

For example, we completed a review or' the adequacy af test in2ormation 

presented to the Congress-"Pu'ead For Eore Accurate Weapon Systea 

Test Results To Be Reported To Congress" !PsA3-79-46). In tha4 report 

we pointed out that Congressional Data Skreets repcr-ling test zesub-ls 

on 15 weapon systems were incomplets, misleadiag and/or outdatsd. 

Corrective actions were initiated by IXD. 

In our report, "SARs-Defense 3epartmeit Reports That 

Should Provide Mare Information To the Congres3" (PSAD-80-37, 

May 9, 1380), we pointed out that DOD had reportad incomplete 

information to the Congress on major weapon systens. In our 

classified report "DOD Information t3 the Congress on Xajor 

Weapon Systems Could Be More Complete and Useful" (6-PSFJa-30-25, 

May 9, 19801, we reported on a number of reporting sys=ems on 

major weapon systems. 

W 

Subsequent to our work corrective actions were hitiaked 

by Defense. However, Defense did not act on same o f our 

recommendations some of which we wsre reFeaticg for +At? second 

time. Therefore, in a March 1981 report (MASAD-81-71 we recmmended 

that the Congress require tke Secretary cf Defense make 

certain changes to the reporting systems which would result in 

improved congressional oversight cf major wea2cns systems and 

23

zmsraIL bettdr msnagement. At this writin7 we are not able to 

.-e if Defense made the changes re recommended or if the 

IGmgress will adopt our recommendations. 

mIXIXG UNDER 

Loz 

Bdiuidual programs, as appropriate, will coctinue to 

be a e d under this LOE- As a resxlt of our ComFbeted 

-k on inproving the quality of agency reporting, actions 

Wkea by agencies on our recomendaticns, and our recsnt 

muwameadations to the Congress, we plan no work on reporting 

-s used by the Cepartment of Defdnse In this placning 

sibs, 

skrz!ltecJy for the upcoming 

D-lQd 

For this 18 month ?laming p.eriod our asaigniients in scpport 

LOE will focus on fndividua?. acquisiticns or projects in 

eo highlight key issues to the Ccngress as the programs 

m e , Our work will 5e directed, as needed, to merging progran 

aqak%tions and will support the annual authorization and appro 

- process. We also plan to provide the Congress with our 

aunaFaraf information report on major Fed.rra1 acquisitions- 

In order to identify systems for rsviev we continually re- 

.sesuzh hdividual programs to detttmins which critical issucs 

SbaM be developed in reports to the Congress. We then select 

iad.iv%nil atajor programs for review with the ictent of providing 

e resultant reports to Congress early in the next year for use 

h a;nthorization and appropriation hearings. Dapending up03 a 

war- of factors such as the stzge of development of the system 

and t5e thrust of the audit work planned, the assignment may or may 

a& be achieved under this LOE. 

Sparriffc Considerations to be Addressed 

m3AdzA 'evirig the Objectives of this LOE 

Executive agencies provide in their directives, regulatkas, 

circulars, guldeLines, etc. , very specific instructions 

=acquiring major systems. In the Department of Defense these 

zeqakz rigid determinations/evalaations of: 

mission analysis 

operational requirements 

threat 

acquisition strategy 

manageinent 

- planning and budgetiq 

24 

.

as& estimates (Previously an LOE) 

cns&-ef€&iv= solutions 

~esimW for cost * schedule, performance 

-ility 

desii8p-~st 

Gbfadabaky 

saxvivab&lity and vulnercbility (Previously an 

-ces to acquize and opegate 

%izaes;s 

-rescy (Previously an LOE) 

joht psgrams 

development 

d%zn&i9e concept solutions 

staadaxdization 

LO%) 

sLlet&E&em&m .t-ion/etraluatlons must be mzde at four major milesthzmzs 

daz5aeg #e 5 - to 10 or 15 yesr period it takes to 

syzterrrs. These have betn identifie2 zs follows: 

.* 

m e Zezo - Program Initiation Decisi'on 

awhskme . *- 

1 - Demonstration and Validation Decision 

.. 

Xs&S%ae PI Pull Scale Deselopent/Initlal Producticn 

IXI - Iroduction/DeFloynent Decision 

2-q atUestone zero am? at eack milestone ir, the cyzlt there 

~EE spc3€Zc phase objectives, activitizs, policy guieelines, 

qgst-m kaues, and management issues concerning the above evaluathns. 

-w*- 

Qrpr -irk is directed to the parxicular phase ari acquisition 

3s 5s x aut. -to enter at the time af our wcrk and whether 

a%izal @base objectives, activities, management issues etc., 

kwwe basn ahquately validated/demcnstrated before proceeding 

t~ nex& of the cycle. 

snsa'tmr assigmmts 

JX the twenty priority #I individual weaaon systen; reports 

to issue early in 1982, five zre included under tiiis LOE. 

!l!hse ass-errts, shown below, weze selected to he12 achievre the 

wd.s of titis L3E. The assignments represent relatively new 

d-t programs or current acqcisitions wh5re little recer?t 

&f mrk was performed. As such ou: wcrk is cancerned with actio 

vikiesjjbbjeztives norzally associated with proqram initiztion 

(ailestone 0) , demonstration and validations decisions 

I- I), and some milastane I1 decisions. While we da not 

hawe a hzd and fast rul;. for salecting Essigments to help Eeet 

2s

LOE objoctives. We believe that our research, judgement, and past 

work assigjnmants provide a reasonably disciplined cpprsach Zor 

selecting systens for revzew under this LGE. 

The five are: 

1. Review of Trident program 

2, 

Review of the Advance Light Weight Torpeeo 

3. Review of the C-X aircraft program 

4. Review of &ti-Submarine Warfare Standoff Weapons 

5. Review of XX missile program 

Others underway include a survey or' San Psancisco&s 

$2.0 biliion Wssteweter progzam; survey of NASA's Space 

Transportatim System Operations Cost and User Prices; 

a d a review oE NASA's Landsat-D Program. 

Some anticipated results of this work include identifying 

system effectiveness and progkam acquisition management 

issues and making zecojpmendations to the Congress or Agency 

head to minimize development risks, ensure effectiveness, 

or reduce costs of major programs. In some cases we expect 

that: our regerts will also improve the disclosure of system 

issues not previorsly considered by the Congress. 

Planled Assiyments 

Sridividcal systems will be idaartffied as early as practical 

in CY 1982 am3 programmed foe work durins the balance cf 1982 

with report issuance dates of January/Fabruary 1983. Command, 

contra: ane! , comunication systems inc?,uded ia this work kiuld 

use expezts from the our subdivision responsible for that type 

work. 

Survcys are also planned of the $320 nillion acquisition 

of the Next Generation Weather Radar by the National Oceznic 

and A'-J?ospheric Administration; of the Corps of Engineers S2.1 

billion Central an8 Southern Florida Flood Concro!. Project; and 

NASA's role in space shuttls operatons. 

26

Attachment I 

LOEs To J3e Approved for hASAI)'s 

Systems Peveloument and Acquisitions - 

Issue Area (31)OO) 

-1s tbs Congress being provided with accurate, 

objrcfice, and cmplete infonation 03 the 

status and significant issues concerning 

system for whkk funds are beizaq requested? 

-To what extent do the system cazrently baing 

acquired satisfy the agency' s agpmved program 

performance thresholds? 

--W%at is being done during the devaloFmznt 

mu acquisitiar, process to achieve the proper 

bdbanca by trade-offs between de.relopment a& 

Scqrqisition coszs, design to cost constrairts , 

and ownership ccsts yet maiiitain adequate system 

pz=fonnance and operational effectiveness? 

-=To what extent Fs testing and evalgation of 

acqalsi tions effectively plamad candceted 

re-tted and cansidered in decision making? 

And, what is; being daae in Development Test 

and EvaLuatfon and Operaticnal Test and Evaluat$on 

tD ksure that reliability, avsiltabilityp 

u!ainfainabflity, and human reliability 

requizeme?sts are beiig met? 

-Does planniag for major acquisitions adequataly 

corsider ,%tenti& critical. material shortages 

on system east, schedule, and perfsmance goals? 

-What has Sean the impact 02 OMB Circular A-LO9 

on acquisiticn pr3grams Fn terns of hslpinq 

Federal agencies acquire systems which arc 

afforc2able, sacisfy the need, and which are 

aqailatle 03 the? 

1 

. 

n 

1 

-Sow i3 the develoFmeAt and acquisition of m]Or 

proqruaa af f=?ct& by cooperating with foreign 

countries in t h development , production, or 

sale of systems? 

--Is the Defensi 3egartnent and its ccnipnents 

requesting multiyear con tS: ac tins authorization 

for weapons systems where adVailtaqeQUS to the 

Government and have rasults been beneficial 

to the Gavern.nent? 

-:?hat has besn the inpact, or potential imBact, 

of acquisition stzategies sach as Frepianned 

Production Improvements which provide for 

pknr.ed efficient growth in capabilities? 

95

Attachment I 

--Does the management and oversight of technology 

base programs insure that technology resources 

are being used in the most efficient and effective 

manner and support the development and 

acquisition of agency programs? 

Attachment I 

.'. 

- 2 - 

35;? 

...

96 STAT. 742 PLBLIC LAW 97-252-SEIrf. 8,1982 

Unit Cost repon. 

Anw.p.739 

wormation 

“(3) Tmcwernent progzam‘ means a program for which fhds 

for proamment are anthorized to be appropriated in a fiscal 

Year. 

“6) The program manager far a defense acquisition pmgram that 

as of the end of a fiscal-geer qtmter is a major defense acquisition 

togram (other than a pmgrann nd required to be incfaded in bh 

!elected Acquisition Report for that quarter under section 139abW3) 

of this title) shall, not more than 7 days after the end of that 

quarter, submit to tbe sepetary concerned a written report on the 

unit teste of the program The pmgram manager SheIl include in 

each fiuck unit cost reportthe following informatian *respect to 

the pmpam (as ofthe last day afthe qurtrter for which thr repmt ie 

made): 

‘WThe rsgram~~tmttcost 

“(2) In tie case of a procuremeat program, the paranent 

URit coet. 

“(3) Any cost variamce or schedule variance in a @r contract 

under the program since the basehe Selected Acquisition 

RepoR was submitted, 

“(4) Any changes fkun program schedule milestwes or p m 

gram performances rrileded in the baseline Sdected Aq&- 

tion Report that are known, expected, or anticipated by the 

program manager. 

“(cX1) If the program manager of a major defence acquisition 

program for which a unit aost report Ea previously been ntbmitted 

under subsemion 0 determines at any time during a fisca-yeat 

quarter thet there is reasmsble cause to b&ve- 

“(AI that the pmgmu acquisition unit cost fix the pmgrarp 

has increased by molt than 15 percent over the program quasition 

unit cost for &e program as ebown in the heline 

Selected Acquisition geporS 

“(B) in the ca6e of a majar defense acquisition pmgram that is 

a prosuremerit proqtm, that the m a t procurement nnit cost 

for the progmn haa mcrectsed by more thau 15 perwnt over the 

rocurernent unit caat for the pmgram as reflected in the 

laseline Selected Acquisition Report; or 

“(GI that cost v&a or schedule variances of a .mjor 

contract under the pmgram have resulted in an increase III the 

cost of the contract &at least 16 percent over the cost of the 

contract as of the tirpthe contract was made; 

andifaunitccrstreport~~~anincreaseofsuchpercentageoP 

more has not previousiy been submitted to the kretary concerned 

during the current fkal year (other than the unit cost report under 

~ubsection (b) for the Iast qaarter of the preceding fiscal year), then 

the program manager shall immediately submit to the secretary 

conceraned a unit cost rem containing the information, Betennined 

as of the date of the repor& required under subsection (bL 

“(2) If ia any fiscal year the pyam 

er for a ma* defense 

acquition pragram has subnutted to- tary concerned a 

unit cest report (other tban the unit & repqrt under Bubsection (b) 

for the last quarter of the preceding fiscal year) indicating an 

increase of 15 percent or more in a category described in ciauses (A) 

through (0 of paragra h tu and subquently determines that there 

isreasonablecauseto liewe 

“(A) that the CllTRpt program uisition unit cost of the 

program has increased by more than ”: percent over the current 

program acquisition unit cost aa shown in the most recent

eport under this subsection or subsection 61 submitted to the 

Secretary concerned with respect to that prograro. 

“@I in the case of a major defense acquisition program &at is 

a procurement program, that the current procurement uait cast 

for the program has increased by more than 5 percent mer the 

current procurement unit cost as shown in the most receca 

report under this subsection or subsection submitted to the 

Secretav concerned with respect to that program; or 

‘KI that cost variances or schedule variances of a 

eontract under the program have resulted in an inmease in the 

cost of the contract of at least 5 percent over the cost of the 

contract as shown in the m d recent report under this subsection 

or subsection (b) submitted ta the Secretary concerned with 

respect ?x that 

the program m - x immeciiatefy submit to the secteiary ~epon. 

concerned a unit cos& report containing the information. determined 

88 of the date of the report, required by subsection (bi. 

“(dX1) When a unit cast report is submitted ta the Secretary 

concerned under this section with respect to a major defense scquieition 

program,. the Secretarp shall determine whether the current 

program acquition unit cost for the program has increased by more 

than 15 percent, or by more than 25 percent, over the rogram 

acquisition unit cost for the program as shown in the Lhe 

Selected Acquisition Report. 

“(2) When a unit cost report is submitted to the Secretary concerned 

under this section with respect to a major defense acquisition 

program that is a procurement program, the secretary concerned 

shall, in addition to the determination under paraspaph (1). determine 

whether the current procurement unit cost for the program 

has increased by more than 15 percent, or by more than 25 percent, 

over the murement-unit cost for the program as reflected in the 

baseline & I d Aquisition Repor% 

“(3) If the Secretary concerned determines (for the fimt time since ma 

the beginning of the current tkil ear) that the cuprent program =tirn 

acquisition unit cost has increased g y more than 15 percent, or by congren 

more than 25 percent. as detehed under pahagraph (1) or that the 

current procurement unit cost has increased by more than 15 

percent, or by more than 25 percent as determind under paragraph 

(2)- 

!‘(A) the Secretary shd not* Congpess in writing of such 

determination and of the increase with respect to such program 

within 30 days after the date on which the unit cost report 

that is the basis for such determination was submitted to him 

and sid include in such notification the date on which the 

determination was made; and 

“(B) except as provided in subsection (e), additional funds may O%?+ 

not be obligated in connection with such program- 

“(i) after the end of the 30-da period beginning on 

the day on which the Secretary des such determination, 

in the case of a percentage increase of more than 15 but less 

than 25 percent; or 

“(E) after the end of the 6Way period beginning on the 

day on which the Secretary makes such determination, in 

the case of a percentage increase of more than 25 percent. 

“(eX1) The prohibition in subsection (dX3XB) on the obii ation of 

funds for a major defense aquhition program does not app f y in the 

case of a program to which it wouid otherwise apply in the case of a 

to 

funds. 

proiubinon.

96 STAT. 744 PUBLIC LAW 97-252-SEIYT. 8.1982 

Wawer. 

determination of a 15 percent increase (as determined under subsection 

tdj) if the Secretary concerned submits to Congress, before the 

end of the 3Wy period referred ta in such subsection, a report 

containing the information described in subsection . 

“(21 The prohibition in subsection (dX3XB) on 3! e obligation of 

fwds for a major defense acquisition program does not appiy in the 

ease of a program ta which it would otherwise apply, in the case of a 

detennination of a 25 percent increase (as determind under subsection 

(d+ 

“(A) if the increase was due to termination or cancellation of 

the acquisition program; or 

“Cst if the Secretary of Defense subsnits to Cangress, before 

the end of the @day period referred to in such subsection- 

“(i) a written certitication stating that- 

“(n such acquisition program is essential to the 

national semriw, 

‘‘0 there are no alternatives to such acquisitim 

program which will provide equal or greatep military 

ca bili atIesscost; 

pi? %e new estimates of the program acquisition 

unit cost or procurement unit cost are reasenable: and 

“0 the management structure for the aquisition 

program is adequate to manage and control program 

acquisition unit cost or procurement unit cost; and 

“(ii) if a report under paragraph (1) has been previously 

submitted to Congress with respect to such pmgram for the 

current fiscal ear but was based upon a different unit cost 

report from tie program manager to the serretarp concerned, 

a further report containing the infomation 

descriixd in subsection @I, determined from the time of the 

previous report to the time of the current repbrt. 

“(3) The prohibition in subsection (dX3XB) on the obligation of 

funds for a major defense acquisition pragram shall cease to a piy in 

the case of a program to which it would otherwise apply $ after 

such prohibition hae taken effect, the Committees on b e d Services 

of the Senate and House of Representatives waive the prohibition 

with respect tQ such program. 

“(fl Any determination of a percentage increase under this section 

shall include expected inflation. 

“(gX1) Except as provided in paragraph (21, each report under 

subsection (e) with respect to a major defense acquisition program 

shall include the following. 

“(A) The name of the major defense acquisition program. 

“Ts) The date of the reparation of the report. 

YCI The pmgram p L as of the date of the preparation of 

the report 

“(D) The estimate of the program acquisition coet for the 

program as shm in the Seld Acquition Report in which 

the program was first included, expressed in constant baseyear 

dollars and in current dollars. 

“(E) The current program acquisition cost in constant baseyear 

dollars and in current dollars. 

“0 A statement of the reasons for any increase in program 

Eiqtuisition unit cost or procurement unit cost. 

(GI The completion status of the program (i) expresswls the 

percentage that the number of years for which funds have been 

appropriated for the program is of the number of yeam for 

Is

PCTBLIC LAW 97-232-SEPT. &, 1982 

!36 STAT. 745 

which it is planned that funds nil1 be appropriated for the 

program, and (iit expressed as the percentage that the amount 

of funds that have been appropriated for the program is of the 

total amount of funds which it is pianned will be appropriated 

for the program. 

“(HI The fiscal year in which information on the program was 

first included in a Selected Acquisition Report (refemed to in 

this paragraph as the ‘base year’) and the date of that Selected 

Acquisition Report in which information on the pmgram was 

first included. 

“(11 The date of the baseline Selected Acquisition Report 

”iJ) The current change and the total change, in dollars and 

expressed 8s a percentage. in the program acquisition unit cost, 

stated both in constant byear dollars and 1n current dollars. 

“IK) The current change and the toeal change. in dollars and 

expressed as a percentage, in the procurement unit cost, stated 

both in constant base-year doilars and in current dollars. 

“IL) The quantity of end items to be acquired under the 

program and the current change and total change, if any, in 

that quantity. 

“(MI The identities of the military and civilian officers 

responsible for program management and cost control of the 

program. 

“tN, The action taken and proposed to be taken to control 

future cost growth of the program. 

“(0) Any changes made in the performance or schedule milestones 

of the program and the extent to which such changes 

have contributed to the increase in program acquisition unit 

cost or procurement unit cost. 

“(PI The following contract performance assessment i&&mation 

with respect to each major contract under the pmgram: 

“(il The name of the contractor. 

“lii) The phase that the contract is in at the time of the 

preparation of the report. 

“(iii) The percentage of work under the contract that has 

been completed. 

“(iv) Any current change and the total change, in dollars 

and expressed as a percentage, in the contract cost. 

“(v) The percentage by which the contract is currently 

ahead of or behind schedule. 

“(vi) A narrative providing a summary explanation of the 

most significant Occurrences, including cost and schedule 

variances under major contracts of the program, amtributing 

to the changes identified and a discussion of the effect 

these Occurrences will have on future program costs and 

the program schedule. 

“(2) If a program acquisition unit cost increase or a procurment 

unit cost increase for a major defense acquisition program that 

results in a report under this subsection is due to termination or 

cancellation of the entire program, only the information specified in 

clauses (A) through (F) of paragraph (1) and the percentage change 

in program acquisition unit cost or procurement unit cost that 

resulted in the report need be included in the report.”. 

(2) The table of sections at the beginning of such chapter is 

amended by inserting after the item relating to section 139 the 

following new items: 

IO usc 139. 

7

. . . 

96 STAT. i4G 

Repeal. 

Effective dates. 

IO L'SC I19a 

note. 

Ante, pp. 739. 

741. 

Report to 

congressional 

committees. 

Personnel data. 

10 USC 2392 

now. 

Contract 

provls10ns. 

PLfBLIC LAW 97-2524EPT. 8,19E2 

"139e Oversight of cost gmwh in major programs: S eld Acquisiuon Reprts 

"139b. Oversight of cost gmmh in major programs: unit cos( reports.". 

Cb) Section 811 of the Department of Defense Appropriation 

Authorization Act, 1976 (10 U.S.C. 139 note), is repealed 

(c) Sections 139a and 139b of title 10, United States We, as added 

by subsection (at, shall take effect on January 1, 1983, and shall 

apply beginning with respect to reports for the first quarter of fiscal 

year 1983. The repeal made by subsection (b) shall take effect on 

January 1,1983. 

OVERSIGHT OF DEFENSE EXPEXDITWRES 

SEC. 1108. (a) Concurrent with the submission of the budget to 

Gongress for ikd year 1984, the Secretary of Defense shall submit 

to the Committees on Armed Services of the Senate and House of 

Representatives a report concerning the strength requested in such 

budget for civilian personnel for the Defense Contract Audit 

Agency, the Defense Audit Service, and the Defense Criminal Investigative 

Service. Such report shall state the number of such personnel 

at the end of fiscal year 1982, the number at the time the report 

is submitted. and the number requested in that budget and shall 

include a justification for the number requested, The report shall 

also include the opinion of the kretary of Defense on whether the 

number requested is sufficient for those agencies to accomplish their 

functions with respect to the reduction of waste, fraud, and abuse in . 

defense expenditures during the next fiscal year, particuiarfy in 

light of any increases (in red term) in the levels of appropriations 

requested in that budget for operations, procurement of new equip 

ment, and for research, development, test, and evaluation. 

6) The Secretary shall inciude in the report under subsection (a) 

information concerning the savings in defense expenditurea 

achieved by the Defepse Contract Audit Agency, the Defense Audit 

Service, and the Defense criminal Investigative Service during ' 

fiscal year 1982, including a statement for each agency of the 

amount of such cost savings achieved as a percentage of the number 

of dollars spent by such agency during such year. 

CONTINUATION OF TEEZ PROGRAM "0 AUTHORIZE PIUCE DIWERENTUL 

TO RELIEVE ECONOWC DISLOCATIONS 

SEC. 1109. (a) The Secretary of Defense should conduct a test 

program during fscal year 1983 in accordance with this subsection 

to test the effect of exempting certain contracts of the Department 

of Defense from the provkions of section 2S92 of title 10, United 

States Code, and paying a price differential under such contracts for 

the purpose of relieving economic dislocations. Under such test 

program, the Secretary of Defense may exempt from the provisions 

of such section any contract (other than a contract for the purchase 

of fuel) made by the Defense -tics Agency during fiscai year 

1983 if the contract is to be awarded to an individual or firm located 

in a Labor Surplus Area (as defied and identified by the Department 

of Labor) and if the Secretary determines- 

(1) that the awarding of such contract wilI not adversely affect 

the national security of the United States; 

(2) that there is a reasonable expectation that bids will be 

received from a sufficient number of responsible bidders SO that

OFFlCE OFTHE UNDER SECRRARY OF DEFENSE 

WASHINGTON. D.C. 20301 

RESEARCH AH0 

%NGINEERING 

25 January 1982 

As you already how, a major objective of this Addnlstration is 

to make substantial improvemats in the acquisition process 

within the Department of Defense. 

When the Department developed the 32 initiatives which compzfse 

the Acquisition Improvement Program last April, we solicited the 

advice of individuals familiar with all asvects of the vrocurment 

system from both within and without gove&e&. We woGd like to:" 

encourage your continued participation in improvin'g our management 

of the acquisi tion process. 

The attached document represents'a high-level review of o q 

progress after s k months. We have gone a lopgway towarh our 

stated objectives, but have met some barriers. We believe thati' 

this Xeport identifies those barriers in a manner which will UQW 

us to overtme them. 

Deputy Secretary Frank C. Carbucci has directed that the permanent 

Acquisition Imptoveroent Steering Group be chqged both w&Eh mcnitoring 

progress and taking appropriate actions to assure rapid 

.- implementation of the initiatives. Ve welcome. your $.continued 

comments and suggestions, and will give careful condderarion to: 

each. If you have any questions, my Executive Secretary of the 

Steering Group, Mr. Jim Wolbarsht, may be reached at (202) 695-TO97. 

I hope to have the chance to meet with as many of you as. possible 

on a personal basis in the near future, and will also welcome your 

thoughts directly. Thank you again for your interest in acquisition 

management at the Department of ~ Defense. 

Att. 

William A. Lang W- 

Deuutp Under Secretary 

(Acqufsi tion Management)

~ 

DEPARTMENT OF DEFENSE 

I 

! 

i 

. .- 

I 

? . 

ACQUISITION IMPROVEMENT 

TASK FORCE 

DECEMBER 23, 1981 

TZLS COPY AUlYORIZEf) FOFZ 

-.-: 

Eighty sequential pages 

sent this date for print- 

c 

Executive Secretary 

January 25, 1982

RESEEARCH AND 

ENGINEERING 

23 OEC I981 

HEMOMXDUM FOR UNDER SECXCTARY OF DEFENSE FOR RESEARtX AND EN-G 

SUBJECT: 

Final Report of the Task Force on Acquisition Zmptwement 

On November 17, the Deputy Secretary of Defense directed-the Council on Integrity 

and Xanagement Improvement to establish a Task Force on Acquisition Improvement. 

The Task Force was directed to conduct a comprehensive review of progress to date 

' on the Acquisition Lmprovement Program, and to present an implementation plan. 

On November 19, the Under Secretary of Defense for Besearch and Engineering 

held the initial meeting of the Task Force -bets, with the DUSDRE (Acquisition 

Pianagement) as chairman. A listing of the Task Force membership is attached. The 

Task Force was divided into four teams to review progress on each of the 32 

initiatives, coordinating work throughout with the permanent action officers in 

OUSDRE, the Services and DLA and others as appropriate. The report, attached as 

tabs 1-32, is submitted in accordance with these directions. 

The purpose of this report is to: (a) provide a detailed description of what has 

been accomplished to date, (b) identify signif icant barrfers to implesnentation, 

and (c) make specific recommendations to overcome those barriers and to achieve 

prompt implernentatioa of the initiatives. The principal focus of the Task Force 

has been on "iapl~entation.'* 

The key thane of the Task Force has been "enhanced management" of the acquisition 

process. This means managment with, for example, better planning, more effective 

competition, more realistic cost estimates, adequate and stable funding, aore 

economic production rates, greater use of multiyear contracting and improved 

readiness and support. Application of these basic management Fmprovements to any 

individual program requires increased near-term funding fn order to make the 

overall program less costly. Hard choices are necessary to identify funding 

offsets. The magnitude of our current affordability and priorirization problems 

constitutes an underlying barrier to effective implementation. Pet, the scarcer 

the resources, the better we must manage not only with respect to acquisition, 

bur f.n all aspects of DoD's national defense responsibilities. 

The Defense Guidance for Fiscal Pears 1984-88 must articulate this issue and take 

positive steps to solve the mismatch betneen requirements and resources if ve 

expect to make acquisition improvements. Actions currently undervay to recancile 

defense strategy and available resources are of paramount importance. 

Zf fective knplementation also depends upon proper application of decentralized 

management to the overall acquisition process. SecDef guidance has stated that 

"responsibility, authority, and accountability" for programs should be at the 

lowest levels or' the organization at which a total viewpoint of the program rests. 

Bowever, varying interpretations concerning how this guidance should apply have 

created some uncertainty and misunderstanding. In order to have any real effect,

- _. . . . . 

decentralization must result in establishment of the decision maker for each 

program at as low a level as practicable and reductions in the multiple reviews 

now held at each decision point. Some success bas been achieved, fat examDle, 

by reducing the ntcnber of major programs reviewed by the DSARC. Similar actions 

have been taken by the Services. Hovever, although it may be a bit early with 

respect to many programs, the perception from program and field level managers is 

that not enough reduction in review requirements has occurred. Ye recognize 

there are significant problems inherent in the implementation of decentralized 

management in the Context of a political environment which sometimes 

encourages centralized decision making. Nevertheless, the Task Force believes 

i% necessary to increase emphasis on implementation of this principle, including 

taWng the necessary steps to remove any misunderstanding or uncertainty. 

Overall, the Task Force concluded that considerable effort has been expended 

and that meaningful progress has been made in implementing the Acquisition Improvement 

Program since its initiation on April 30, 1981. In some areas, however, 

accomplishments have been limited. Ultimately, success will depend upm the dedication 

of those who believe that the program can and will work. More visible 

results must be accumulated and utilized as an effective tool to convert those who 

remain skeptical. Those initfarives net clearly understood must be clarified, In 

addition, we must leave no doubt that we are serious and must make day-to-day 

decisions in greater conformity with the initiatives. 

Xn addition to these general obsemations, there are specific areas which 

merit special attention. 

Proqran Stability: A major portion of the ultimate success.of the 

Acquisacion Improvement Ftograrrn can be directly related to the degree to 

which programs are stabilized. Although some progress has been made, 

significant problems remain. 

To achieve greater program stability, we must also arb, '=ve a greater degree 

of stability in the Semice "toDline" budget guidance. Many factors 

YtEtluence the topline guidance including ones outside of DoD. If this 

guidance changes significantly during the year as programming and budgetfag 

decisions are being made, each Service must continually make adjustaents and 

rebalance its program. Greater stability in topline guidance will help 

substantially to alleviate the problgm. This is a key element of the 

Acquisition Improvement Program and, because it is largely outside the control 

of the Seroices, the highest levels within the Department of Defense must 

address this matter on a coatinuiag basis. 

2 

Effective implemeatation of the initiatives connected to stabilization 

requires their immediate incoqoratfon into the planning process. The 

Fiscal Year 1984 Defense Guidance must reflect the thrust of the Acquisition 

Improvement Program. In the near future, OUSDRE and m&L will brief the Defense 

Resources Board on the mismatch between requirements and the resources in 

the Draft Guidance. So-s must be found vnicn are consistent vitb the 

Acquisition Improvement Program. Otherwise, problems are certain to arise 

in the Fiscal Year 1984 POMs and full implementation of the initiatives may be 

slowed.

Important procedural steps toward near-term stabilizatim such as improved 

guidance, a stable programs list, and a special Defense Resources Board 

meeting on new starts and economical production rates were Implemented 

during the Fiscal Year 1983 program and budget review. But the ouccome of 

some os' these actions has been disamointine. 

*- 

The stable uroeramS fist. 

for example, is not yet definitive. , Recognkag that not kl-programs can 

'rae "stable, *' nonetheless difficult choices with respect to matters such 

as vertical cuts will have 60 be made. Skepticism exists that OSD will 

OT can execute a stable programs concept by providing the Long-term cm-- 

h41 f +v et~on th-s 

3 

Unforeseen reductions during development of the Fiscal Hear 1983 

budget contributed to destabilization of a number of acquisition programs. 

Some programs which had been restored to more economical production rates 

through the Fiscal Year 1981-812 Budget Amendment subsequently were proaosed 

for cancellation, reduction, or stretchout in order to meet the new fiscal 

constraints. Follow-on action by the Defense Resources Board to restore 

economical production rates only partially cospensated for the cutbacks. The 

balance between across-the-board responses to threats and program stability 

is difficult to strike, bur unless we reduce the nmber of programs, and 

at the same time vreserve the required funding for our "stablp" DroszraOls, 

our Acqulsition Improvement Program will not succeed. 

The Defense Resources Board met recently to consider all of the "new svart" 

major programs for Fiscal Year 1983. Eleven were approved, three were not 

approved, and two were restructured. The "new start" review is an iup.Jrtant 

addition to the programming phase and should be retained for numerous 

reasons. Although care must be taken to review new starts from a variety 

of mission standpoints and not to overstate the linkage between new starts 

and program stability, there is some relationship berween the two. 

Multiyear Contracting: The Fiscal Year 

three programs for 1982 multiyear c o r i t r a a . 

he t'iscal Year ~ YUA b uctget submission will include additional candidates, 

Rnile the Secretary of Defense requires production and advance procurement 

to be fully funded for FI 1982, economic order quantity (EOq) purchases 

are funded to termination liability out of a special multiyear contracting 

increment to TDA. 

Nevertheless, due in part to the inherent tension between the desire for 

savings and the need for ZA- 

Die Darners remain to wider 

in &adit1 an, the Services do not 

believe tnat 

ex cess of the "annual buy" T51A are special 

additions to TOA added by OSD. In other words, the Services believe that 

such additional TOA should be available to the SerPfces for other prosrams 

if not committed to multiyear programs. The Task Force, therefore, reccumenas 

clarification of this issue and that alternative funding concepts which reuuire 

lclss front-end funding be considered in the Fiscal Year 1984 Guidance. 

1. 

Preplanned Product Imurovement: Initial progtess has been made in inplementing 

the Preplanned Product Irtptovement Initiative P3I). A 031 Inplementation 

plan has bean issued to the Services and a list of candidate 

3

4 

systeas has been received. The Task Force, however, , wnati dentifv a 

DSARC milestone review or program review which has considered a P31 21-t 

since Initiation of: the Acqulsltion Improvement Program in April. %rther, 

the Task Force could not identify an instance in which a program has been' 

Feduced In scope uirn a viewRSW3W.a r -uture enmncement via a PI approach. 

/ 

The Fiscal Year 1984 POMs should be reviewed to ensure that all P31 candidates 

and their funding alternatives are clearly identified. 

iVP 

Cost Growth: Despite some initial steps, controlling cost growth both 

real and perceived) remains a major problem, The solution must include more 

realistic eseimates accurately 

g ruiaare costs and difficult choices 

to reduce requirements when costs g%m. The Nirvember 20 Defense Resources 

Beard decision which requires the Semites to explicitly choose between the 

program manager's estimate and Independent ones while explaining the 

choice is a useful step. The direction that the Assistant Secretary (Coautroller) 

and the CXIG (Cost Analysis Improveneet GrouD) eosure that cost 

estimates reflect assessed risk is also a step fonsard. But until agreement 

is reached with the Office of Managenent and Budget on budgeting for inflation 

more realistically, unbudgeted inflation will continue ZO generate massive 

osc growth. Although initial drscusslons 

have been held witn URB , tne Task Force recommends that the Department contime 

its strong position on this issue and aggressively pursue the matter 

further. In addition, little has been aceomplished with respect to the 

incentives called for in the 30 April 1981 Kernorandm on this element of the 

Acquisition Improvement Program. 

I 

Improving Suooort and Readiness: As directed by BepSecDef in his nemoraildum 

dated June 13, initial steps have been taken to improve suppore and reaufness, 

but lack of priority by management has hindered implementation. Frograms 

continue to be structured to give precedence to acquisition cost, schedule of 

performance objectives, while support and readiness are left to be accomodated 

within these program constraints. Major programs continue to reach DSARC reviews 

without well-defined and consistent reliability, readiness and support 

objectives, or the resources to achieve them. !Re Task Force recommends as 

an agenda item for each DSMC milestone or program review, an assessmen;; of 

readiness objectives, the risks in achieving them, options to reduce the 

risk, and the test and evaluation efforts to provide verification of support 

and readiness. The Milestone I review should address acquisition strategy 

Including front-end funding, contractor incentives, design and supportability 

tradeoffs, test and evaluatiou plans, and alternative schedule and funding 

approaches and their effect on readiness achievement. Besultant contracts 

should also be assessed to determine whether support and readiness have 5een 

given appropriate priority vis-a-vis cost and schedule considerations. 

Competition: Several important steps toward =king more effective use of 

competition 'nave been taken, and others are ongoing. In response to the 

DepSecDef memorandum of July 27, the Services and the Defense agericies have 

submitted management objectives to increase the benefits of competition. 

Additional plans with specific management actions are due to OUSD-?.E in January. 

An outside study to be completed next June Till focus on o p t h prosram/ 

comodity opportunities for increased competition. On the other hand, program 

reviews conducted in recent months have shown graphically that the extra 

Y

5 

near-tznn costs of maintaining an additional contractor in the process are 

a real barrier to sustained competition in system development. Continued 

monitoring and assessment of progress will be required to detersine the overall 

effectiveness of this initiative. 

The Task Force Reports on each initiaslve identify specific barriers to implementation 

and propose actions intended to overcome those barxiezs. The single 

largest barrier to implementation at this juncture is the assumption that complete 

implementation can occur without extraordina.ray management action on a systematic, or 

syst-, approach. We must start to view the fnitiatives as an integrated, corn- - 

prehensive package or program and decision makers must demonstratively 

act in accord with the principles of the Acquisition Improvement Program. Individual 

responsibility for application of the concepts in day-to-day decisim making must 

be stressed. The policies of the improvemene program are clear. They were 

enunciated in the April 30 memorandum and will be restated in pare in the soon to 

be issued DoD Directive 5000.1. Derivative directives and instructions must 

reemphasize both the systems approach and individual responsibility for implementation. 

But in addition to this channel of cvmmunicatioa, we reconmend that an 

ongoing team assume responsibility for implementation. Specifically, we recommend 

that the Acquisition Improvement Steering Group, which existed before this Task 

Force was chartered, be continued. The Steering Group is comprised of the Semice 

and OSD offices most directly involved with implementation and is, therefore, able 

to focus broad management attention on the key issues. 

i 

We recommend you accept this report as responsive to the Task Force charter. 

We also recommend that the Steering Group proceed with the task or' 

implementing the specific ideas contained in, and resolving remaining issues 

identified ih, the report as well as conduct an intensified effort to reconcile 

PPBS and programmatic decisions with the objectives of the Aquisition Inprovenest 

Program. Action-oriented working groups under the auspices of the Steering Group 

should be created, as necessary, to aid this effort. We must, for example, continue 

to focus attenrion on the need for program stability and other management principles 

which represent a basic cultural change in contemporary attitudes toward decision 

making. 

As is the case with any multi-faceted program, there are a small number of 

especially critical elements to the Acquisition Iqrovement Program, vnich in this 

instance, include the elements specifically ref erred to above. These critical 

elements deseroe special emphasis by the Steering Group. Of particular iroportance, 

however, is sustained management emphasis 09 these elements, and others requiring 

involvement of offices outside the Department, at all levels within the Department 

of Defense. 

Even though a Steering Group may be charged to direct overall implementation of 

the improvement program, final responsibility ultimately lies with the decisionmaker(s). 

Each decision-maker who impacts programs should ensure tSat his actions 

are consistent with the objectives of the improvement progtn. This idea must 

be foremost in mind. After having institutionalized the actions identified by 

the Task Force, our emphasis should shift to more qualitative assessmencs to 

detennine and measure meaningful improveznent in the Dol) acquisition process, 

Attacfiments 

* ILLIAM A. LONG L' 

DEPUTY USDE2 SECRETARY 

(ACQUISITION ItASRGEXENTI

TASK FORCE ON ACOUISITION MPROVEEXT 

Chairman: William A. Long 

Deputy Under Secretary of Defense 

(Acquisition Management) 

Members: Army 

Navy 

riir Force 

DLA 

LTG 3. H. He-, USA 

Deputy Chief of Staff for Research, 

Development and Acquisition 

VABEa B. R. baroe, USN 

Director of Research, Development, 

Test and Evaluation 

e. J. E, Williams 

Deputy Assistant Secretary 

Acquisition Managaent 

BG C, F. Drenz, USA 

Deputy Director 

Acquisition Hanaganent 

I&. 3. W. Melchner 

]Deputy Assistant ea the 

Secretary of Def ease (RM)) 

Dr. R. D. Uebster 

Deputy Assistank Secretary 

Logistics and Material Management 

OSD (C) 

DPAhE 

Mp. J. T. Kammerer 

Director of Special Projects 

Hr. T. P. Christie 


General Purpose Programs 

Advisors : OSD (GC) 

osn(u) 

OUSDRE 

DPAExE 

Ifre D. Trosch 

Assistant General Couasel 

Logdstics 

BG B. R. Harris, USA 

Deputy Assistant Secretaq 

Plans and Operations 

RADM I. tinder, US3 (Ret.) 

Director, Defense Test and 

Evaluation 

W. M. A. Margolls 


Resource Analysis 

6

2 

Advisors (Cont. ) : OUSDRE 

DY.' P. J. Berenson 

Special Assistant for 

Assessment 

Fxecutive Secretary: OUSDRE: Mr. J. L. Uolbarsht 

7

ACQUISITION IMPROVENENT TASK FORCE 

Report on Initiative No. 1. Title: Management Principles 

Task Force Principals: BG C. F. Drenz, USA h Mr. T. P. Christie 

ACTION REQUIRED BY DETSECDEF MEMORBNDUM OF A P 30: ~ 

.the Deputy Secretary of Deferwe reaffirm the e . 

management principles. 

N 

.major acquisition 

TO DATE: 

DepSecDef signed 30 April 1981 memssandum to Military Departments, JCS, and QSD 

staff resffirming the management principles in Inftiative No. 1. DepSecDef signed 

a second memorandum, 27 July 1981, to all the preceding offices plus the Defease 

Agencies reaf'fianing the need for increased competition in the acquisition 

process. DepSecDef has made statements in testimony berme the House and Senate 

reaffirming the management principles. These principles are also included Fn the 

first draft of the DoD Annual Report to Congress. See Enclosure 1 for specifics of 

follow-on Service/Agency implementation. 

BARRIERS TO JXPEBMENTATXON: 

1. Although Services/Agencies have been able to take actions to publicize the 

initiatives and urge nhanda-snn personneb to suppart them, fUl implementation 

(i.e a , institutionalization) through publication of Service/Agency instructions is 

held up pending publication of DsDD 5800.1 and DsDI: 5000.2. These documents are 

currently being staffed within DoD. PubPicatien of DoDD 5000.1 is expected by the 

end of December 1981; DsDI 5000.2 should be ready for publicatioc by 1 March 1982. 

2. Full implementation of changes ser$Jfped to enhance the planning process and the 

issuance of Defense Guidance is bebg delayed by difficulties encountered (for 

various reasons) by the Defense Resources Board (DRB) members in making a full 

examiaation of major planning issues at the first decision session on the Defense 

Guidance. Subsequent meetings to resolve difficult issues.are planned. The goal 

for Defense Guidance issuance rPmaFns 22 January 1982. 

3. Although much progress has been made in disseminating the management 

initiatives, ornlp action and example at the hi&iest levels will emphasize our real 

commitment to their implementation. DRB and DSARC members must consider each 

programmatic and budgetary action La terms of the initiatives and act accordingly. 

Failure to do so will negate all other efforts. 

SPECIFIC ACTIONS TO ENSURE -ATTON 

AND IMPLLWTATION SCHEDULE: 

Responsibility has been assigned for implementation of renaining actions, both 

those which are dependent on publication of DoDD 5000.1 and DoDI 5000.2, and those 

which are not. See Enclosure 2. 

i

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! 

ACCOMPLISHMENTS TO DATE 

1. Actiocs common to all Services: 

a. Disseminated initiatives to subordinate commands for action. 

b. Emphasized Feitiatives through briefings to acquisition ccramands/managers. 

2. Defense Systems Management College (DSW actions: 

c 

a. Incorporated principles into curriculum; currently teaching in appropriate 

classes. 

b. Provided 30 April 1981 DepSecDef memo to each student. 

c. Provided students with briefing package on bitiatives for use at home 

stations 

d. Submitted article on the bitiatives to nConceptsll magazine, which is 

distributed to all Project Managers and other appropriate acquisition personnel. 

Publication expected in December 1981. 

e. Presented briefings on the initiatives to personnel in Services' 

acquisition headquarters and field activities, other government agencies, and 

industrial and professional associations. 

3. Actions on paragraph 1 of Initiative No. 1 coiicerning improved Defense 

Guidance : 

a. Established an independent group at the National War College to explore 

innovative concepts for application across the full spectrum of Defense Department 

organization, strategy, and forces. This group will provide advice to 

SecDef/DepSecDef who w ill decide what further development should be taken. 

b. Changed the planning process significantly ta incorporate a major DRB 

review of DoD policy, strategy, and options prior to issuance of Defense Guidtnce 

(DG). The new goal is to issue the DG in late January, about two months earlier 

than was done in recent prior years, to permit .fuller reflection of long-range 

planniag concerns in the Service PO-. 

c 

INIT 1 

Encl 1 

\

SPSCIFIC ACTIONS TO ENSUilE IMPLEMENTATION 

The offices/individuals Indicated are responsible for implementation of the 

actions shown below. Overall responsibility for monitoring Initiative No. 1 will 

be carried out by OUSDBE(AM). 

1. bcesporate the acquisition management 

principles in the draft Defense Guidance. 

2. But up-front policy declaration in 

BsDD 5000.1 listing the management principles 

a d stat- that these me the basic DoD 

aCqUiSitiQR prhcfphs for adherence by d.1 

astivities. 

Target 

- Date 

I6 Bec 81 

31 Dec 81 

Responsible 

Office 

DPAhE 

3. Publish DODO 5000,l 

4. Publish DoDI 5006.2 

5. A% an Information Item in a Defense Acquisition 

Cfroular (the process by which changes to 

the DM and related important information are 

distributed) I publish the 30 Apr 87 DepSecBef 

memo, .!up j : Improving the Acquisition Process. 

This will inform contracting officers and asgui- 

%ition personnel at the operating level of the 

thrust of the acquisition management principles. 

31 Des 81 

1 Mar 82 

15 Feb 82 

6 Publication of Servicdhgency regulations 

implementing DoDD 5000.1 : 

a, Ensure that subordinate activities publishlng 

acquisition regulations review management 

principles for inclusion in their publications, 

deternine changes required to align their publications 

with the management principles, and publish 

revised reguations by D+120. Report statu to 

OUXEE(AM1 by D+120; continue to submit status 

reports until action is completed (reporting 

mechanism Indicated below in Action 48 may be used.) 

D+ 120' 

Services, 

Agencies 

b. Review reports Par suitability of progresa; 

initiate corrective action where appropriate. 

204 

monthly until 

completion 

INiT 1 

Encl 2 

Page 1

Action 

7. Request that 8 hools/ olleges resp nsible 

for acquisition related instruction incorporate 

the management principles in their curricula and 

report actions taken to initiative monitor. 

8. Organizations responsible for acquisition 

aetivities uere previously required to implement 

the principles in the ear term, to the e%tertt 

possible, pending publication of DoD or Service 

dbrectives/instructions, DAR, etc. Reports were 

required of scheduled actions and accomplishments. 

Continuing actions required: 

a. Continue to submit monthly reports cf 

acromplishments/probletPs. 

b. Review reports for suitability of progress; 

initiate corrective action where appropriate. 

9. Prepare video tape outlining the management 

principles and make it available to the Serviced 

Agencies for continuing orientation of aew 

acquisition personnel 

Target 

- Dzte 

D+30* 

Monthly 

Monthly 

Mar 82 

Responsible 

Off ice 

Services, 

DSMC 

Services 

OUSDF! AM 1 

DSMC 

10. Publish a special issue of "Conceptsn magazine 

providing detailed information on those 10- 

15 initiatives that program office personnel 

should consider b preparing their acquisition 

strategies. 

11. Reassess the status of implementation of 

Initiative No. 1 after one year and take 

appropriate action. 

12. DSARC and DRB members examine and decide each 

programmatic and budgetary action in terms of the 

management principles. 

Mas 82 DSMC 

Jan 83 OUSDRE (AM 1 

Continuing DepSecDef 

For Target Dates shown as *D+* a number of days, *D-Dayn is the date of 

publication for DoDD 5000.1. 

INIT 1 

%ncl 2 

Page 2 

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ACQUISITION MPROVEMENT TASK FORCE 

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€ 1 

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3 

Report on Initiative No. 2. Title: Pre Planned Product fmprovement (P I) 

Task Force Pr-incipals: LTG J. H. Merryman, U S & Mr. J. W. Melcher 

ACTION REW3ED BY DEBSECDEF MSIORANDUM OF AFRSL 30: 

3. USDAE, warking with the Services, develop within 30 days a p h for 

implemeating Preghnned Product Improvement including defhLtiOR3 and criteria for 

application. 

2. OSDRE request; the services to evaluate ongoing programs to determine potential 

for payoff from the application of Preplanned Produet Improvement, and to present 

results at the next DSBFIC. 

3. USI3RE assure Services have fixed the respcnsibility for review of' 

opportunities for product improvement after any system reaches the field, and to 

develpp a product inproventent plan. 


1. P31 bplementation plan (6 Jul 87) developed and issued ts Services. 

2. Services haye established focal points qt HQs level and provided OUSDRE with 

list of candidate systems. 

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3. Changes to DQDD SQOO.l/BoDI 5000.2 have been developed and are being 

coordinated. OSD will-attempt to alleviate inconsistencies betueen the directives 

and the implementation plan. 

4. 

Services have identified Service IZegulation changes needed for implezentation. 

5. The Services have taken steps to identify specific finding requireients in the 

FY 84-88 program development process. 

BARRIERS TO IMPLEXENTATION: 

1. Question of emphasis: P 3 I is presently regarded as requiring more early funds 

for in oqoratios of provisions for future changes. What is completely missed is 

that P 2 

I should reduce initial system coats, because the more advanced capabilities 

have been deferred to future improvements. The most significant barrier is lack of 

understanding and acceptance of this view. 

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2- 1

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2. Question of definition: P31 vs Product Improvement Program (PIP) 

- relationshi visibility. The Services need a clear position on what is included 

in the term P 

Y 

I. The stated definition could possibly be used to describe every 

change that comes along. Does the initiative really mean Pre Planned? Specific 

criteria for changes need to be developed so that each of the Services understands 

the ieitiative's purpose and intent. The Implementing Instructions of 6 July 81 

haye created some COR ion in that each of the Sesvices has a different 

interpretation of mere 9 P I should be applied and whether or not it overlaps their 

established PIPS. 

3. The Implementation Plan requested a list of P 

3 

1 Candidate Systems. Reason - to 

let Industry bow where the Services are heading. Presently the AITF feels 

providing a list or lists to Industry is premature, The Services need to focus 

actions OF we wfll be guilty of seading out false signals to Industry. 

< , 4. Question of execution: During current budget rsview, OSD staff occasionally 

' 

seemed unaware of - or violated - precept of this initiative. 

€ 

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' 

SPECIFIC ACTIONS M ENSURE IWLRGNTATION AND IMPLEMENTATION SCIEDULE: 

Recognizing that P 3 I is on schedule, a number of steps must be accomplished for P 3 I 

to succeed. 

a. OSD must recognize the different nanagement practices of each of the 

c. Services with regard to PIPS. 

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L 

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b. Reemphasfze the reference point of reducing risk and reduaing dollars. 

('=his will be done in Defense Guidance,) 

c. The Services will develop an education plan to create an atmosphere *-ore 

P 3 I is accepted by the user as well aa the developer. 

d. In order to institutionalize P 3 I, each of the Services should continue to 

develop a decentralized structure for implementation, Report results to USDRE by 

1 Mar 82. 

e. a 

OSD will incorporate P I position into Defense Guidance. 

f. OSD should define P 3 I to include specific criteria necessary for a P 3 I 

initiative. 

g. Do no5 release candidate list at this time. Additional guidance on 

criteria for P I initiative is required. 

h. 

DepSecDef' issue strong guidance on ? 3 I to GSD staff'. 

i. The Services must move smartly to make the FY 84 POM, 

implemented through the PPBS, 

since P 3 I must Se 

2-2

ACPUISITION PIPROV9fENT TASK FORCE 

Report on Initiative No. 3. 


Title: Multiyear Procurement (KIP) 

Hr. J. E. Williams h W. J. T. Kammerer 

ACTION REQUIRED BY DEPSECDEF MEHORA"M OF APRIL 30: 

1. 

General Counsel response to H.R. 745. 

2. USDRE and ASD(C) to brief Approprfatiorns and Amed Services C0mmittee.s on 

procedures and concepts. 

3. USBRE to prepare policy mernorandum to MJitary Departments and request 

bdentification of F7% 83 candidates. 

4. USDRE modify DAR 1-322 as required: ASD(C) modify BOBB 7280.4; USDRE aad A,QD(C) 

interface with OM8 to modify budget circular A-ltO 

5. 

SecDef to present FY 83 budget containing multiyear candidates. 


1. Completed 5 June 1981. 

2. Completed April 1987. 

3. Cqmpleted 1 May 7981. 

4. The DAR Council established a subcommittee to revise DAR 1-322 and begatt its 

effort by 27 November 1981. 

5. Multiyear candidates submitted to Congress with savings of about $480 ~~U.lian. 

It appears the Congress will approve 3 of our candidates for FY 82 with S;?V%R~S 

totalling $325 million. (C-2A, F-16, . AWTRC-170 radio). The FY 83 budget 

submission will include at least nine other candidates for multiyear, including the 

Defense MeteoroPogical Satellite Program, the SM-I missiXe, the NATO Seaspzrrow 

Ordalt and the Multiple hunch Rocket System. 

6. FY 82 Autharization Act provides the Statutory base for enhanced use of 

multiyear procurement. 

7. Services have briefed large numbers of Government and industry personnel on new 

DoD MYP policies and procedures. 

8. The current DoD policy has been published, through budget decisions and 

otherwise, as follows: nTrlhile the Secretary of Defense requires. production and 

advance procurement to be fully funded for FY 82, economic order quantity (EOQ) 

purchases are funded to termination liability from a special multiyear contracting 

increment to TOA . 

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BARRIERS TO LY.?LZMENTATION : 

1. The Hilitary Departaents perceive that the additional TOA provided by OSD for 

FY 83 is at the expense of their other valid requiraents and this continues to be 

the most serious problem affecting uide-spread implementation. 

2, The Appropriations Coattees, ONE and the DOD Comptroller community (and the 

DepSecDef, to date,) have a preference for "full funding" (policy stated above) 

which, in the perception of many, ties up TOA when the possibility of caneeUation 

or termination is renuste. 

3. Many in the acquisition communities in OSD, the Services and industry are of 

the opinion that, if we continue with MYP as presently directed, i.e., full 

funding, MY? initiatives beyond FY 83 will not be pursued. 

4* Fluctuations in top-line TOA create much the same problems with multiyear 

procurement as with program stability (see Initiative No. 4 report). 

SPECIFIC ACTIONS TO ENSUm IMPEEMENTATION AND IMPLEMENTATION SCIEDULE: 

1. 

USDRE revise DAR 1-322 as recommended by DAR Subcommittee. 

2. 

3. 

ASD(C) revise DODD 7200-4 in January 9982 after the passage of legislatioo. 

Services should consider other programs for FY 83. 

4. The acquisition comities in the Services and OSD recommend that the SecDef, 

in consultatifla with USDRE, ASDfCJ-, the Semiees zna Congressional Committces , 

revisit exist-ins policies Ad, iii that connection, consider alternative fuiaiinq 

concepts such as unfunded termjmat.ion liability and incremental funding for MP. 

5. 

SecDef guidance for FY 84 POM should include policy on MYP. 

6. Whatever the ultimate-policy on matiyear may be, contiaued information and 

education of Service acquisition staffs-on policy and actions to date in respect to 

multfyear procurement must be ongoing. 

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ACQUISITION WROVEMENT TASK FORCE 

Report on Initiative No. 4, Title: Program Stability 

Jaak Force Principals: BC C. F. Drenz, USA de Mr. T. P. Christie 

ACTION REQUIRED BY DEPSECDEF MpIORANDllM OF APRIL 30: 

SecDef direct that during program and budget reviews by OSD (DRB) the Service 

Secretaries explain and justify differences betueea program baselines established 

at Milestone II and the quantity and funding in the program or budget under review. 

ASD(C) and ASD(PA&E) include above direction in FY 83 POM and Budget Guidance. 


1. Planning and programming guidance to the Services has aphasized pregraa 

stability and termination of low priosity programs. However, the results to date 

in developiag the FY 82 and FY 83 Defense programs are not impressive. 

2, Prior to the DepSecDef memoraiidm of April 30, 1981, the FY 81/82 Budget 

Amendment had restored stability to several programs that had been subjected to 

turbulence under the previous administration, e,g., the M-1 tank, Fighting Vehicle 

System? Patriot missile system, AH-64, HARM missile system, P-3C, AV-8B9 A-6E, 

P-15, F-76, and 8-10. For the most part, the Services continued their .support for 

.this init;iative in. their FY 83 PQMs. The multiyear contracting initiatives 

proposed by the Services should also contribute to the stability of specific 

programs?(e.g,, Ei16 production). More attention, however, needs to be devoted to 

stability of Research, Development, Test and Evaluation programs. 

3. An USDRdrE inenorandun to the Services on the subject of Program Stability, dated 

July 31, 1981, requested the Services identify candidates programs for a DoD stable 

programs list and cancal or truncate other programs to fit the remaining 

requirements within budget constraints. The Services have made a major effort to 

respond to this initiative. For example, the Army has identified a number of 

programs with surficient funding in FY 83-87 for program stability and has 

forwarded a list of 12 candidate programs to OSD for stable funding. Four of these 

are still under consideration: M-1 tank, Fighting Vehicle System, €I-60 Blackhawk 

and C€i-47D modification. The Navy also propided OS13 with a list of programs 

proposed for stable f'unding; however) final action awaits the final FY 83 budget 

decision. The Navy did terminate some 32 projects in attempting to carry out this 

initiative. The Air Force provided OSD with 13 candidates for stable funding 

including the B-1, as well as eight programs that were cancelled or deferred during 

the POM developmeRt program. 

4. As part of the 31 July request, the USDRE placed particular eaphasis on Zew 

system starts, and the OSD staff' pmpared issue papers recommending t3e 

cancellation of several new starts in order to provide resources for the stable 

funding of other programs. Care must be taken not to overstate the linkage Setvesn 

4- 1

new starts and program stability because a host of other factors are involved in 

each issue, and the two have only an indirect relationship to each other. These 

issue papers also served as a mechanism for consideration of new starts as a part 

of the PPBS process - another DepSecDef initiative in the April 30, 1981, 

memorandum. These "new start" issues have been brought, in one fom or another 

before, the DRB several times during the FY 83 program and budget review. The 

outcome on these issues will depend on the final deliberations of the DRB on the FY 

83 budget. 

5. An unforeseen budget reduction during the development of the FY 83 progra had 

a major impact on the progress made up to that point. Just prior to completion of 

the FY 83-87. program review in September 1981, reductions in the FY 82 request as 

weM as planned funding in E'Y 83 through FY 84 resulted in perturbations in several 

procurement and R&D programs. fn many cases the very programs that had been 

restored to previous levels in the Fa 81/82 Budget Amendment were proposed by the 

Services for termination, reduction and/or stretchout. 

6. The programming and budgeting process for calendar year 81 has not been 

completed. The FY 82 Defense Appropriation Bill has just been passed by the 

Congress, a d the Fp 83 budget review by the DRB is still undernay at this time. 

Until t&is latter action is completed, a final assessment of the implementation of 

this initiative m o t be made. 


1, The major barrier to Fmplementation of' t.3is initiative has been conttnusd 

flr?cfuation in the DoD budget. Even as the total DoD budget has gotie up and down 

durjng this past yesr, it has been clear that even the higher levels have not brier% 

sui'ficient to fully fund all the programs deemed deserving of stable funding. 

2. The Services, OSD and Congress -have all been reluctant to cancel major lwer 

ariority programs in order to provide for fully funding others. Part of this 

reluctance-at least on the past of the Services and OSD, if not Congress-can be 

attributed to the lack, of agreement on which programs are of the highest priority 

and should therefore be stabilized. 

. 

3. Cost growth and technical problems continue to plague major acquishiion 

program. When programs are f'unded based on low coat estimates, budgeting fop 

higher actual costs inevitably leads to program stretchout-both development a d 

procuranent-particularly in an environment of budget constraints. Likewise, 

unforeseen technical problems increase cost and schedule uncertainty resulting in 

further-and often unavoidable, yet adviseable-stretch- in programs. 

4. Another factor causing the Services, OSD and even Congress to eabrace the 

concept of program stability kith less than great enthwiasm is the desire to 

maintain 8018 flexfbility in the prcgrammiog and Sudgetinq cycle. This need for 

flexibility is based on a natural desire to be able to deal effectively in 

programming and budgeting with a rapidly changing environment - change in the 

threat, technological opportunities, budget fluctuations, economic perturbations, 

etc. 

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4-2

5. The tendency to postpone programming decisions until vel1 into the budget 

process, or alterratively, to revisit programming issues during the budget 

process, also has an adverse effect on both procurement and RhD program stability. 

STBCIFIC ACTIONS TO ENSURE IMPLEL'.IENTATION AND fMPL,WTAITON 

SCHEDULE: 

1. The Defense budget is always going to be subject to some fluctuation. To 

minimize the impact of those changes, however, it is important that future TOA 

projections be as realistic as possible. Duping the DRB reviews of the draft FY 

84-88 Defense Guidance, now scheduled for 14 and 21 January 82, tho DUSD(P) and 

ASD(C) should insure that both top-line and Service projections of-future rtsdurce 

avaihbillties are realistic. 

2. The most critical action needed is implementation of the fb%t management 

principle reafrirmed in the DepSecDef memorandum of April 30, 81. The importance 

of Defense Guidance for FY 84-88, to be issued early 82, providing a clear and 

explicit statenent of Defense policy regarding strategy and the resawces required 

to accomplish that strategy is well recognized. Within the bounds of this 

strategy, programs of. highest priority must then be stabilized. The lists of 

candidate programs for stabilization previously submitted by ths Services, 

augmented with OSD staff' proposals, could serve as a starting point for the 

development of such guidance. The OSD staff should pay particular attention to 

stabilizing those high priority programs that involve the participation of ti90 or 

more Services. 

3. Better control of cost growth will require the use of more .realioLic est.iwt7.tes 

of cost on the part of managers at all levels, and better estisates- of infS.ai,?on. 

The USDRE, in conjunction with the Servi'ces, should continue to Lapruvz. the detllnds 

used in predicting technical risk. 

4. The desire for maximum flexibility is a mangeaent fact of life. This aspect of 

the stability problem can be minimized only to the extent that frequent and lr,;-ge 

fluctuations in guidance (strategy, forces, resource availability, inf1.aI.ion 

indices, etc.) can Se avoided, as discussed above. 

5. During the program and budget review processes, the DepSecDef must insure Chat 

decisions are neither delayed, nor re-visited. 

6. The steering groups should continue to give the highest level of attenkioa to 

this initiative, including the continued development of the stable programs 

list--both as to its meaning and consequences-with the objective of upgrading 

program stability at dl levels. 

7. Successful fmplementation of this initiative is also dependent on the 

effective Implementation of several other inftiatives, particularly: (3) 

Multiyear Procurement; (61 Budget to Most Likely Costs; (12) Front End Funding for 

Test Hardware; and (18) Eudgeting for Inflation. 

4-3


Report on Initiative No. 5. Title: &courage Capital Investment to Enhance 

Productivity 

Task Force Principals: BG C. F. Drenz, USA h Mr. T. P. Christie 


USDRE should have the prime responsibility to Fmplement the following actions - 

working closely with General Counsel, Legislative Affairs, aapd the Service 

Materiai Commands. (There are eight "following actions". These are listed 

separately in the attached items 5a-5h.) 


Specific results on each subinitiative are shown in items Sa-5h. 

BARRIERS TO WLESNTATION: 

Barriers to implementing subinitiatives are shown in items 5a-5h. 

SPECIFIC ACTIONS TU ENSURE IMPLE31ENTATION AND PiPLEMENTATION SC'dEDUEE: 

Implemestation plans for each subinitiative are shcm in items 5a-5h. 

5-1

2eport on Initiative No. 5a. Title: Cast Accounting Standard 409 

ACTION REQUIRED 3Y DEPSECDEF MEMORANDUM OF APRIL 30: 

General Counsel should support legislative initiatives to permit more sapid 

capital equipment depreciation and to recognize replacement depreciation costs by 

amending or repealing Cost Accounting Standard (CAS) 409, "Depreciation of 

Tangible Assets." 

ACCGMPIJSHMENTS TO DATE: 

le ObfB is currently staffing (internally) its legislative package transferring 

the CAS function to OMB. 

2. OMB has been verbally assured by USDRE(AM) of DoB support for proposed 

legislation to transfer CAS. DoD previously provided OMB with draf't proposed 

legislation to this effect. 

3. Joint Logistics Commanders supported change to CAS 409 in a 9 October 1981 

letter to the Deputy Secretary of Defense and requested DepSecDef assistance in 

implementing this subinitiative. 

BARRIEE3 TO IMPLEMZNTATION: 

1. Industry may oppose the extent of CAS authority being transferred to OMB. 

2. Increase in .costs chargeable to defense contracts (ComptrolLer General 

Bowshe, Congressional testimony). 

3. Iilconaistency of accelerated depreciation methods with generally accepted 

accounting principles (Director, Defense Contract Audit Agency LI memorandum to 

USDRE (AM) 1 . 

4. Revisions to or repeal of CAS 409 will impact other standards. Extent of 

impact unknom kithout input from Government agencies, Industry, and academia. 

SPECIFIC ACTIONS TO ENSURE IMPUMENTATION AND IMPLEMENTATION SCtiEDULE: 

1. If' OMB legislative proposal is not submitted to Congress by the end of Decmber 

1987, USDRECAM) should advise the Director, Office of Federal Procurement Policy 

(in writing) of high level DoD interest in the transfer of the CAS function to OMB. 

USDRE(AM1 should also urge immediate submission of the OMB legislative package on 

CAS for Congressional action. 

2. USDRE(AM) should continue support for OMB proposzl once it is submitted to 

Congmss. This support should include testimony before the Sanking, IIousinq h 

Urban Affairs Committee. Committee expected to take action Sy late Spring 1982. 

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5a- 1

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3. ay February 1982, USDRE(AM), should develop a concept plan establishing DoD 

objectives regarding recognition of costs related to consumption of physical 

assets in sufficient detail so that reasonably accurate estmtes of cost impact to 

DoD can be deterhed. 

4. By April 1982, USDRE(AM1 should complete an assessment of the financial impact 

OR DoD funds of planned revisions or alternate approaches to achieving the 

ob jeetives. 

5. Within 30 days of final Congressional action transfering CAS function to QMB, 

USDRE(ilM) should submit a proposal to OMB incorporating the desired revisions to 

CAS 409. 

C 

6. On a continuing basis, after CAS transferred to Om, Dol) should support OMB in 

any efforts to review CAS 

modification. 

Standards, rules and regulations for appropriate 

(I: 

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Sa-2

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Report on Initiative No. 5b. Title: Return On Investment (ROI) - Productivity 

Investaents 

ACTION REQUI3ED BY DEPSECDEF MEMORANDUM OF APRIL 30: 

Structure contracts to permit companies to strare in cost reductions resulting from 

pmductivity investments. Modify the Defense Acquisition Regulation (DAB) profit 

formuha Ulow for award fees inversely proportional to mintahability costs. 

ACCGMPLISHMENTS M DATE: 

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7. The DAR Pric- Subcommittee explored improvements in contract financing and 

profit policy and issued a report to the DAR Council on 22 September 1981. The 

Subcommittee recommended no DAR changes at this the, but suggested the DAR Council 

commission a comprehensive study (with Industry input) to determine what 

additional contractual incentives would be required to motivate contractors tu 

invest in facilities. The DllR Council has not yet decided to accept the 

Subcommittee's recommendation regarding the need for an indepth study. 

2. The DoD Task Force for Improving Industrial Responsiveness has prepared a draft 

DoD Guide entitled "Improving P;-oductivi ty" . It provides instructions to 

contracting officers on tailoring existing cmtract incentive clauses within the 

authority of existing DAR policies to provide motivation for DoD contractors to 

make productivity enhancing capital hvestments. The Guide has been distributed to 

interested groups for comment. On 9 December 1981, the Task Force briefed the 

Director, Industrial Resources (OUSDRE(AM1) regarding tks Guide. If .approved, the 

Guide should be published by 15 Mqc& 1982. 

BARRI2BS TO IMPLENENTATIGIN : 

1. Reluctance of Contracting Officers to tailor existing clauses to achieve the 

objectives of this sub-initiative. 

2. Subjective nature of measuring productivity increases and auditing resulting 

cost reductions. 

3. Motivational factors (financial and. other) which drive or influence contractor 

capital investment decisions are presently uncertain. 

4. DoD productivity policy must be flexible enough to accommodate the myriad of 

motivational factors driving contractor capital investment decisions. 

5. Insufficient data available to determine effect of other recent DoD policies on 

contractor investment decisions (e.&, flexible progress payments, increased 

standard progress payment rates, inllestone billings, source selection procedures). 

5b-1

SPZCIFIC ACTIONS To ENSURE IMPLEPENTATION AND IMPLEMENTATION SCXEDULE: 

1. 3y January 1982, USDRE(AM) should decide if the Productivity Guide will be 

published. Publication of the Guide, and follow-through to ensure acceptance at 

the contracting officer level, Will overcome Barrier number 1 above. 

2. If a decision is made to publish the Guide, OUSDRE(AM) Staff should assure 

publication by 15 March 1982. 

3. By January 1982, UsBRE(AH) should decide if an Ad Hoc Committee (or pemanent 

BAR Subcommittee) 8hOUl.d be established to perform the study recommended by the DAR 

Proicing Subcommittee. The Ad Hoe Committee would require broad authority to 

contract with outside consultants and, if necessary, .to conduct interviews and 

hveatbgations at the Contracting Offices and Contract Administration level of the 

acquisition process. The Ad Hoc Committee should address Barriers 2-5 above in 

their study efforts; The Coarnittee should also consides ways to improve logistic 

productivity by providing incentives for advanced buys of spares and components. 

4. By Janua.7 1982, USDFfE(AM) should direct the Dk% Council to consider the 

potential for providing contractual incentives to DoD contractor employees ? 

permitting them to share in savings from significant productivity gcreases 

attributable to enhanced workforce pesformnce (as differentiated from 

productivity increases related to iiivestsents in new capital equipment). 

USDRE(AM) should also consider the merits of a SecDef letter to major defense 

centractors and labor groups citing the impostance of contractor uad fabop union 

program to encourage improved employee productivity. 

5b-2

-- 

Report on Initiative No. 5c. Title: Milestone Billings and Exgediting Payment 

ACTICN RZQUIBED BY DEPSECCEF MEMORANDUM OF APRIL 30: 

Increase use and frequency of milestone billings and advanced funding. 

paying cycle. 

Expedite 

ACCOMPLfsHMSNTS TO DATE: 

1. Milestone Billings: Flexible progress payment procedures and increased 

standard Dromess uament rates izsued by USDRE(AM) on 28 August 1981 and published 

by DAR Couc’ll in ‘Defense Acquisition Circular (DAC) 76-31 bated 30 October 1981 e 

These changes fn progress payment policy are intended to limit the need for 

increased use and frequency of milestone billings. This notwithstanding, the BOD 

Contract Finance Committee is reviewing milestone billing coverage for revisions 

in support of subinitiative 5c. 

.- 

2. Expedite Paying Cycle: 

a. The DAB Cauncil has prepared for USDRE(AM) signature a draft mernomdum to 

ASD(C> regarding DoD payment policy and applicable Treasury regulations. This memo 

is for ASD(C) use in responding to an OMB request for efforts to improve the 

Governmentvs bill paying practices. 

be USDRE(AM) has requested that the DoD Contract Finance Committee review DoD 

payment procedures and correct any inpediments to accomplishing the DoD policy of 

expedibed payments. 

BARRIERS TO bMPI,EMENTBTION : 

1. Milestone Billings: lone 

2. Expedite Paying Cycle: The DoD Contract Finance Committee bs not completed 

its review of payment policies and procedures, and, therefore, barriers to 

Implementation have not been identified. 

SPECIFIC ACTIONS TO ENSURE IMPLEMENTATION AND IHPLEMENTATION SCEDULE: 

1. Milestone Billings: 

a. By 15 February 1982, DoD Contract Finance Committee complete review of 

milestone billing procedures and approve revised coverage for DAC publication. 

b. By 30 April 1982, Chi-=man, DAR Council arrange for publication of revised 

milestone billing procedures in DAC. 

2. Expedite PayirG Cycle: 

a. By 24 December 1981, USDRE(AM) transmit approved memo to ASD(C). 

5c- 1

2. Zxpedite ?ayinq Cycle: 

a. By 24 December 1981, USDRE(AM) transmit approved memo to ASD(C). 

b. By 31 July 7982, DeD Contract FinancaCommittee identify any medimerats 

to expeditious payment and advise USDRE(AM) of changes fn regulations or 

procedures necessary to eliminate those impedineats. 

c. By 30 September 1982, IJSDRE(AZ4) issue those chaages necessary to 

expedite the paying cycle. 

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5c-2

3eport on Initiative No. Sd. Title: Profit Levels 

ACTION REQUIilED BY DEPSECDEF MEMORANDUM OF APRIL 30: 

Provide for negotiation of profit levels commensuraLe with risk and contractcr 

investment; ensure that recent profit policy changes are implemented at all levels. 


By memorandum dated 19 June 1981, USDRE(AM1 stated that use of Weighted Profit 

Guidelines will result in reasonable profits if' the proper type contract has been 

selected and directed that contracting activities select the type of contract nost 

appropriate to the risk8 involved. The memorandun requested the Services and DLA to 

forward such guidance to field elements. The Services and DLA have complied with the 

request. Separate action under Initiative Noe 8, Assure Appropriate Contract Type, 

emphasizes the importance of selecting the proper contract type, risk and other 

factors considered, to assure adequate profit motivation for DoD contractors. 


None. 

SPECIFIC ACTIONS TO ENSURE IMPLEMENTATION AND IMPLEMENTATION SCHEDULE: 

None, other than continued monitoring to assure appropriate follow-through. 

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5d- 1

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ileport cn Iaitiative No. 5e. Title: Economic Price Adjustaent 

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ACTION REQUIRD BY DEPSECDEF HEMORANDUM OF BPRIL 30: 

Instruct the Services of the need to grant equitable Economic Price Adjustment 

(EIPA) clauses ia all appropriate procurements. Contract priee adjustments made in 

accordance with EPA provisioas should recognize the lm$act of inflation on profits. 

Ensure that these clauses are atended to subcontractors. 

TO DATE: 

1. The DAB Couacil's EPA Ad Hoc Csmmittee proposed revisions to current EPA 

coverage in a report dated 28 October 7981. 

0 

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2. Proposed DAR coverage: (i) extends use of E211 clauses to fixed-price 

incentive contracts; (ii) provides a less restrictive clause for use in contrzcts 

based on established mafket or catalog prices; (iii) provides revised ETA 

coverage on formally advertised procurements to pedt more equitable bid 

evalwsions; and (iv) provides mre definitive and uniform previsions fer economic 

price adjustment methods. The coverage is designed to provide greater assurance 

that contractors and subcontractors are I not penalized by unpredictable cost 

fluctuations. its present version, the proposed coverage does not contemplate 

adjustment of profit. 

! 

3. The DAR Council. released the Ad Hoc Committee's proposed DAR coverage for 

Industry and Semice/Agency comments on 7 December 1981 under DAR Case No. 81-.144. 

Comments are due by March 1982. 

BARRIERS TO DiTLEMENTATION: 

None. 

SPXCIFIC ACTIONS TO ENSURE IMPLEIENTATION AND WLEMENTATPON SCEMlULB : 

1. DAR Council receive Industry and Service/&ency ccmments by 7 March 1982. 

2. By July 1982, DAR Council review comments a d fssue revised coverage for 

immediate implementation. 

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F 3eport on Izltiative No. 5f. Title: Manufacturiq Technology Program 

ACTION REQUIRED ay DEPSECXF MEMORANDUM OF APRIL 30: 

Increase emphasis on Mufac turing Technology Programs. 


1. The Army has initiated an Industrial Productivity bmprovernent (IPI) Program 

with final Army approval by the Under Secretary of the Army. Programs we underday 

at Rockwell's HELLFIRE plant (Atlanta) and AVCO Lycoming. Potential plants are 

Martin Marietta (Orlando, FL) and Chrysler (Lima, OH). Army's request for funds 

stretches from a low in FY 83 of $86.9 million to a high in FY 87 of $269.9 million. 

2. During the past five years the Navy has invested $77 million in Manufacturing 

Technology (MANTECH) and has budgeted $8 eiPPion for FY 82 and up to $70 nillion 

per year in the out years. The Navy's MANTECH Program for the next five years will 

emphasize four areas of interest, namely, shipbuilding technology, aircraft and 

air combat systems, ship combat systems and electronics. A briefing has been 

scheduled in Janusry 1982 to Dr. DeLaues in response to his memo of early September 

to the Service Secretaries, That briefing will go into detail on the four 2reas in 

the MANTECB Program. 

3. The Air Force has developed a Technology Modernization (TECYMOD) Program with 

the F-16 TECHMOD fsogram as the first demonstration of an effort to reduce 

Government cosis of acquiring the F-16 weapons system. The initial success with 

the F-16 has prompted the Air Force to consider the concept for other system that 

will have long production runs. The objectives' of the Air Force Industrial 

Facilities Program (which includes TEC3MOD) will be accomplished through Pour 

interrelated approaches, i.e., Industrial Treparedness Planning, Facilikies, 

MANTECH, and Industrial Productivity and Responsiveness activities. A new 

initiative of the MANTECH Program is undmway to provide productivity and 

production efficiency improvements for the B-1B industrial base. Initial 

assessments indicate that a payoff of at least 5 to 1 is projected. 

4. Industry and Government participated in a MANTECH Conference in San Diego 

1-3 Dec 81. Industry's critique of the DoD MANZCH program revealed no significant 

problem areas, There was a strong Industry recommendation to more clearly 

discriminate between the MANTECEI program and the TECHMOD or Industrial 

Productivity prog?am. TECXMOD/I?I is an acquisition strategy which must be 

tailored to fit each specific factory and DoD program(s) to include development of 

special manufacturing processes through the MANTECH program. Primary emphasis of 

TECHMOD/IPI should be to strike a "business deal" between Government and Industry 

using appropriate contract types and other means addressed in this Initiative, 

5f-1

5. IncreasLq eraphasis on multiyear procurement (Initiative No. 3) should have a 

significant motivational impact on contractors ' participation in MANTECII programs 

BARRIS3.S TO IMPLZMENTATION: 

1. The complexity of implementing a program to provide incentives for contractor 

investment in severable equipment (machinery such as lathes, millers, grinders, 

etc.1 and to allow auffieient return on investment for Government contracts. 

2. The availability of appsopriated f'unds for MANTECH. 

3. Conflicting priorities (i.e., need to trade-off funding for operational 

weapons systems at the expense of funding for MANTECH). - 

4. Lack of stability in major Dol) weapons systems programs. 

SPECIFIC ACTIONS M ENSURE IMPLEMENTATION AND IMPLEMENTATION SCBEDULE: 

1. On a continuing basis, OUSDRE(AM1 Staff' followup with Services on actions taken 

related to this subinitiative and provide periodic briefings for USDRE regarding 

Services' funding for MANTECH. 

2. USDRE aasure that high level support is provided for companion Initiative No. 3 

(Multiyear Procurement). Such support will assist in alleviating the Barriers 

noted above. 

5f-2

transportability of individual systems and components and units equipped 

with such systems in programed military and Civil Reserve Air Fleet aircraft 

or other transportation modes shall be evaluated. Tradeoffs between 

transportability and combat effectiveness may be appropriate. Both intertheatre 

and intratheatre transportability shall be considered. 

h. Safety and Health. System safety engineering and management 

programs shall be'in accordance with the cr.iteria and procedures in DoD 

Instruction 5000.36 (reference (h)) to ensure that the highest degree of 

safety and occupational health, consistent with mission requirements and 

cost effectiveness, is designed into DoD systems. 

i. Environment. Environmental consequences of system selection, 

development, production, and deployment shall be assessed at each milestone, 

and environmental documentation,prepared in accordance with BOD 

Direcrive 6050.1 (reference (i)). 

j. Quality. A quality program shall be implemented i'n,accordance 

with the criteria and procedures set forth in DoD Directive 4155.1 

(reference (j)) to ensure user satisfaction, mission and operational 

effectiveness, and conformance to specified requirements. 

k. Security. Physical security requirements shall be incorporated 

' 

into the design of any system in which security of the sysf;em or of its 

operating or supporting personnel is essential to the readiness and survivability 

of the system. Deployment of the physical security subsystem shall 

take into accout the requirements of DoD Directive 3224.3 (reference (k)) . 

9. Reliability and Maintainability (R&M) . Goals and thresholds shall 

be proposed in the DCP at Milestone I1 for system RW parameters directly 

related tcr operational readiness, mission success, nuclear and nonnuclear 

survivability and endurance, maintenance manpower cost, and logistic 

support cost. R&M goals and thresholds shall be defined in operational 

terms and shall include both contractor furnished equipment (CFE) and 

government furnfshedtequipment (GEE) elemencs of the system. 

a. R&M goals shall be realistically achievable in service. When 

possible, operational RSLM deficiencies shall be precluded by design of CFE, 

by careful selection of GFE, and by tailoring o f R&M-related operating and 

support concepts, policies, and planning factors. 

b. The R&M thresholds recommended at Milestone I1 shall be the 

minimum operational values acceptable to the DoD Component. Thresholds 

approved in the SDDM at Milestone I1 shall be achieved before Milestone 

111. Thresholds approved in the SDDM at Milestone I11 shall be achieved 

during initial deployment. 

c. R&M growth shall be predicted and graphically displayed in tk 

IPSs prepared for Milestones I1 and 111. The SDDM shall include tfiresiiold

Mar 19, 80 

5000.2 

values, with specified confidence levels, at interim review points. A 

threshold breach shall be reported at these points if these threshold 

values are not achieved. 

d. Resources shall be identified for incorporation and verification 

of R&M design corrections during full-scale development and initial 

,deployment. Assessment of current RSlM values and timely corrective action 

are required until all R&M thresholds approved at Milestone I11 have been 

achieved in service or approved by waiver. 

10. Test and Evaluation. Test and evaluation shall commence as early 

as possible. An estimate of operational effectiveness and operational 

suitability, including logistic supportability, shall be made prior to a 

full-scale production decision. The most realistic test environment will 

be chosen to test an acceptable representation of the operational system. 

Refer to Doll Directive 5000.3 (reference (1)). 

. 

11. Logistics. Integrated logistic support plans and programs, including 

NATO or bilateral allied support, shall be structured to meet 

peacetime readiness and wartime employment system readiness objectives 

tailored to the specific system. BegiMing early in the system development 

process, both Department of Defense and industry shall consider innovative 

manpower and support concepts. Alternative maintenance concepts shall be 

assessed during concept development and at other appropriate points of the 

life cycle. Readiness problems and support cost drivers of current systems 

shall be analyzed to identify potential areas of improvement to be addressed 

during concept formulation. Program goals shall be based on quantitative 

analysis and established by Milestone 11. Detailed support planning shall 

be initiated during full-scale development, and firm requirements shall be 

established before Milestone 111. The supportability of a system's nuclear 

hardness design shall receive explicit consideration. Logistics and manpower 

planning shall be adjusted based on follow-on T&E and other appropriatt 

reviews. Before Milestone 111, the acquisition strategy shall be updated 

to include follow-on support in accordance with DoD Directive 4100.35 

(reference (m)). 

12. Computer Resources. Acquisition of embedded computer resources 

for operational military systems (including comnand and control systems) 

shall be managed within the context of the total system. 

a. Requirements for interfaces between computers and plans to 

achieve that interface must be identified early in the life cycle. Plans 

for software development, documentation testing, and update during deployment 

and operation require special attention. 

b. Computer resource planning shall be accomplished before 

Milestone I1 and continued throughout the system life cycle. 

c. Computer hardware and software shall be specified and treated 

as configuration items. Baseline implementation guidance is contained in 

DoD Instruction 5010.19 (reference (n)). 

17

13. Command and Control Systems 

a. The major characteristics of command and control systems that 

require special management procedures are a rapidly evolving technological 

base, multiple requirements for internal and external interfaces, and 

reliance on automatic data processing hardware and related software. Such 

command and control systems differ from other weapon systems: they are 

acquired in small numbers, in some cases only one of a kind; their operational 

characteristics are largely determined by the users in an evolutionary 

process; and commercial equipment exists that can emulate the 

function. Far command and control systems meeting the above criteria, 

acquisition management procedures should allow early implementation and 

field evaluation of a prototype system using existing commercial or military 

hardware and software. 

b. Upon the recoTendation of the appropriate using command, the 

DoD Component or the ASD(C I), an alternate acquisition procedure shall be 

presented for approval by the Secretary of Defense. Following the documentation 

of a command and control major system requirement in a MENS 

approved by the Secretary of Defense in a SDIIM, the design and testing of 

such systems should, in most cases, be accomplished in an evolutionary 

manner. These command and control systems shall be configured initially as 

prototypes using existing military or commercial equipment to the maximum 

extent possible and with a minimum of additional software. The designated 

users should be tasked to test various configurations in an operational 

environment using prototype and laboratory or test bed equipment and to 

assume the major responsibility for the Demonstration and Validation 

phase. In these cases, it shall be necessary for the DoD Component to 

recommend in the MENS that the Concept Exploration phase be combined with 

the Demonstration and Validation phase. The end result of combining these 

phases shall be a definition of a command and control system, including 

operational software, tailored to meet the commander and user needs and 

the documentation necessary for operational employment. When these 

objectives are achieved, the Don Component shall normally recommend that 

the system be procured in sufficient ambers for initial fielding. In 

other cases, the DoD Component may decide to use the results of the test 

bed to initiate a competitive Full-scale Development phase. 

c. The procedures described in this paragraph are equally 

applicable to those non-major command and control systems that meet the 

criteria described above. Developers of such systems should be encouraged 

to pursue these alternative procedures when appropriate. 

14. International Programs: NATO Rationalization, Standardization 

and Interoperability (RSI). DoD Components shall take 

action on the following areas and report progress at all milestone 

reviews. 

a. Consider NATO country participation throughout the acquisition 

process. This includes standardization and interoperability with other 

NATO weapons systems. 

18

Mar 19, 80 

5000.2 

b. Consider NATO doctrine and NATO member threat assessments. In 

development of MENS, mission needs of NATO members shall be considered. 

In general, data that cannot be disseminated to foreign nations shall 

not be included in MENS. 

c. Solicit NATO member contractors for,bids and proposals on U.S. 

systems and components when such an opportunity is not precluded by statute 

or by the National Disclosure Policy. 

d. During the evaluation of alternative system concepts, the DoD 

Component shall: 

(I) Consider all existing and developmental NATO member 

systems that might address the mission need. Identify any performance, 

cost, schedule, or support constraints that preclude adoption of a NATO 

sys tem. 

(2) Determine testing requirements for NATO member candidate 

systems recommended for further development or acquisition. 

(3) Determine whether a waiver of "Buy American" restrictions 

is appropriate, when a Secretary of Defense determination has not been 

made. 

(4) Develop plans for further international cooperation in 

subsequent phases of the acquisition cycle for items such as cooperative 

development, coproduction, subcontracting, and cooperative testing or 

exchange of test results. 

(5) Recommend U.S. position on third-country sales, recoupment 

of research and development costs or sharing research and development 

costs, and release of technology. 

shall : 

e. In subsequent phases of the acquisition cycle, Dol) Components 

(1) Continue to expand and refine plans for international 

cooperation. 

(2) Develop plans for host nation initial or joint logistics 

support, if applicable. 

F. ORDER OF PRECEDENCE 

The provisions of DoD Directive 5000.1 (reference (b)) and this 

Instruction are first and second in order of precedence for major system 

acquisition except where statutory requirements override. Any Department 

of Defense issuance in conflict with DoD Directive 5000.1 (reference (b)) 

or this Instruction shall be changed or canceled. Conflicts remaining 

after 90 days from issuance of this Instruction shall be brought to the 

attention of the originating office and the DAE. 

19 

7

G. EFFECTIVE DATE ANI) IMPLEMENTATION 

This Instruction is effective immediately. Forward one copy of 

implementing documents to the Under Secretary of Defense for Research 

and Engineering within 120 days. 

1 

W. Graham Claytor, Jr. 

Beoutp Secretary of Defense 

Enclosures - 5 

1, References 

2, Mission Element Need Statement (MENS) - Format 

3. Decision Coordinating Paper (DCP) - Format 

4. Integrated Program Sunmtary (IPS) - Format 

5. DoD Policy Issuances Related to Acquisition of Major Systems 

i 

20

Mar 19, 80 

5000.2 (Encl 1) 

REFERENCES, Continued 

DoD Instruction 7000.3, "Selected Acquisition Reports (SARs)," 

April 4, 1979 

DoD Directive 4120.3, "Defense Standardization and Specification 

Program," February 10, 1979 

DoD Instruction 4120.19, "Department of Defense Parts Control System," 

December 16, 1976 

DoD Directive 5160.65, "Single Manage'r Assignment for Conventional 

Ammunition," November 26, 1975 

DoD Instruction 5000.36, "System Safety Engineering and Management," 

November 6, 1978 

DoD Directive 6050.1, "Environmental Effects in the United States of 

DoD Actions" July 30, 1979 

DoD Directive 4155.1, "Quality Program," August 10, 1978 

DoD Directive 3224.3, "Physical Security Equipment: -Assignment of 

Responsibility for Research, Engineering, Procurement, Installation, and 

Maintenance," December 1, 1976 

DoD Directive 5000.3, "Test and Evaluation," December 26, 1979 

DoD Directive 4100.35, "Development of Integrated Logistic Support 

for Systems/Equipments," October 1, 1970 

DoD Instruction 5010.19, "Configuration Management," May 1, 1979 

DoD Directive'5000.34, "Defense Production Management," 

October 31, 1977 

DoD Directive 5000.19, "Policies for the Management and Control of 

Information Requiremen$s," March 12, 1976 

DoD Directive 4120.21, "Specifications and Standards 

Application," April 9, 1977 

Military Standard 881A, "Work Breakdown Structures for Defense 

Materiel Items," April 25, 1975 

DoD Directive 5000.28, "Design to Cost," May 23, 1975 

DoD Instruction '7000.2, \'Performance Measurement for Selected 

Acquisitions," June 10, 1977 

DoD Instruction 5000.33, "Uniform Budget/Cost Terms and Definition," 

August 15, 1977

Mar 19, 80 

5000.2 (Encl 2) 

MISSION ELEMENT NEED STATEMENT (MENS) 

FORMAT 

Prepare MENS in the format shown below. Do not exceed 5 pages, 

including annexes. Reference supporting documentation. 

A. MISSION 

1. Mission Areas. Identify the mission areas addressed in this MENS. 

A need can be common to more than one mission area. When this is the case, 

identify the multiple mission areas. 

2. Mission Element Need. Briefly describe the nature of the need in 

terms of mission capabilities required and not the characteristics of a 

hardware or software system. 

B. THREAT OR BASIS FOR NEED 

Summarize the basis for the need in terms of an anticipated change in 

the projected threat, in terms of an exploitable technology or in terms of 

nonthreat related factors (e.g., continuing requirements for new pilots). 

When the need is based on a threat change, assess the projected threat 

over the p-eriod of time for which a capability is required. Highlight 

projected enemy force level and composition trends, system capabilities or 

technological developments that define the quantity or quality of the 

forecast threat. Include comments by the DIA and provide specific 

references from which the threat description is derived. Quantify the 

threat in numbers and capability. If nuclear survivability and endurance 

are required mission capabilities, include an explicit statement of this 

fact. When the need is based on exploitation of developing technology, 

describe the benefits to mission performance. 

C. EXISTING AND PLANNED CAPABILITIES TO ACCOMPLISH THIS MISSION 

Briefly summarize the existing and planned DoD or allied capabilities 

to accomplish the mission. This must not be a narrow, one-Service view 

when looking across a multi-Service or an overlapping mission area, such 

as air defense. Reference existing documentation, such as force structure 

documents. 

D. ASSESSMENT OF NEED 

The most important part of the MENS is the evaluation of the ability 

of current and planned capabilities to cope with the projected threat. 

Base the evaluation on one or more of the following factors: 

1. Deficiency in the existing capability, such as excessive manpower, 

logistic support requirements, ownership costs, inadequate system readiness 

or mission performance. 

2. Exploitable technological opportunity.

3. 

Force size or physical obsolescence of equipment. 

4. Vulnerability of existing systems. 

E. 

CONSTRAINTS 

Identify key boundary conditions for satisfying the need, such as: 

1. Timing of need. 

2. 

Relative priority within the mission area. 

3. The order of magnitude of resources the DoD Component is willing 

to commit to satisfy the need identified. This resource estimate is for 

initial reconciliation of resources and needs. It is not to be considered 

as a program cost goal or threshold. 

4. Logistics, safety, health, energy, environment, and manpower 

considerations. 

5. Standardization or interoperability with NATO, and among the DoD 

Components. 

6. Potentially critical interdependencies or interfaces with other 

systems, and technology or development programs. 

F. RESOURCE AND SCHEDULE TO MEET MILESTONE I 

Identify an approximate schedule and an estimate of resources to be e 

programed along with the approach proposed for developing alternative 

concepts for presentation to the Secretary of Defense at Milestone I. 

2

Mar 19, 80 

5000.2 (Encl 3) 

DECISION COORDINATING PAPER (DCP) 

FORMAT 

Prepare DCP in the format shown below. Do not exceed 10 pages, 

including annexes. Reference supporting documentation., 

Part I: State the direction needed from the Secretary of Defense, 

including deviations from the acquisition process contained in DoD Directive 

5000.1 (reference (b)) and this Instruction. 

Part 11: Describe the overall program. The Description and Mission 

statement contained in the "Congressional Data' Sheets" may satisfy this 

requirement. 

Part 111: 

Revalidate the need for the program. 

-Y 

-c 

Part IV; Summarize system and program alternatives considered and the 

reasons why the preferred alternative was selected. 

Part V: Summarize the program schedule and acquisition strategy with 

emphasis on the next phase. The degree of competition should be addressed. 

Part VI: Identify and assess issues affecting the Secretary of 

Defense's milestone decision. 

ANNEXES 

A. Goals and Thresholds 

B. Resources - Preferred Alternative 

C. Life-Cycle Cost

DCP ANNEX A 

GOALS AND THRESHOLDS 

Mar 19, 80 

5000.2 (Annex A to End3 ) 

,."C.r 3 4 

.ast Approved by SECDEF 1 

Goa 1 

(a) 

Threshold . 

(b) 

Current 

Estimate 

?ecmend 

4t This M 

Goa 1 

(d) 

to SEC$EF 

estone 

Threshold 

(e) 

Flyaway 

SCHEDULE 

Next Milestone 

I oe 

' 

PERFORMANCE 

0 erational 

Evailability 

Mission 

Survivability 

and Reliabilitv 9 10 

Weight 

Range 

Speed 

Sortie Rate 

SUPPORTABILITY 

- AND MANPOWER ' 

Manning 

Maintenancerelated 

R&M l3 

Petroleum, Oil , 

Lubricant 

Consump~pn 

Spares 

Provide goals and thresholds from 

1st SUDM. 

Explain any changes from columns (a) and (b) in a footnote. 

3 Provide values for total RDTEE and procurement appropriations and for flyawayhol laway/ 

sailawa cost Additional ost e ents ma e pp o riate f r 'ndividual systems. 

All cosz goali and threshol8s wilil 6e in cohskant, gage year ioljars. 

4 Add additional stubs as appropriate. The stubs indicated are mandatory. 

5 Provide both a total RDTEE program goal and threshold. Fiscal year thresholds shall be 

displayed in a footnote to this Annex and shall total to the overall ROT&E threshold. 

6 Provide projected date for next milestone and for Initial Operational Capability (IQC). 

Define IOC by footnote. Additional schedule elements may be added, as appropriate. 

7 Select appropriate parameters that drive system effectiveness and costs. The stubs 

indicated are only examples. 

8 Use readiness-related R&M parameters that constitute operational availability if more 

appropriate. 

9 Provide goals and thresholds to be achieved by the next milestone. Predfcted 

survivabxlity growth and R&M growth shall be displayed in a footnote to this annex as a 

series of fntennediate thresholds capable of being measured during development, 

production, and deployment,. 

10 Include mission maintainability if maintenance will be performed during the mission. 

11 Include combat utilization rate if different from peacetime utilization rate. 

12 Include both operators and maintenance personfie1 . 

13 Include separate parameters for depot maintenance. 

14 Use logistic-related R&M parameters, if appropriate. 

2

i 

I / 

., 

! 

DCP ANNEX B 

RESOURCES - PREFERRED ALTERNATIVE 

(Current Dollars in Millions) 

Mar 19, 80 

5000.2 (Annex B to Encl 3) 

.cquisition Quantities 

Development 

Production 

Deliveries 

M ToTAt 

COMPLETION PROGRAM 

I 

iEVELOPMENT 

Validation Phase 

Full-Scale Development 

Total Development Cost 1 

RDTSE Funding (Approved FYDPI 

RODUCTION 

system cost 2 

(Long Lead Requirements) 

Initial Spares 

Total Procurement Cost 1 

Procurement Funding (Approved FYDP) 

- 

ILCON 

During Development 

During Production 

Total MILCON 

MILCON Funding (Approved FYDP) 

otal Program Acquisition Cost 1 

RDT&E, Procurement and MILCON 

Funding (Approved FYDP) 

(Dl F ference) 

stimated Other Resources Requirements 3 

During Development 

During Production 

PERATING AND SUPPORT 

ObM 

MILPERS 

Procurement 4 

Total Operating and Support Cost 

otal Life Cycle Requirements 

-____ 

Equal to Weapon System Cost as defined in DoD Instruction 5000.33 (reference (u)); for Shipbuilding, Outfitting and Post Dellvery Costs will be included. 

Other Life Cycle related costs (i.e., Installation, ProJect Manager Office, Civilian Salaries, ecc.) funded by other appropriations; e.&. , 06M 6 MILPERS 

during Development and/or Production phase. Also, Production Base Support (Industrial Facilities). shore-based training facilities. and 

other system peculiar costs identified as a separate line item, or as a portion of a separate line item, in another part of the ProcurC!liLlit 

Budget. Identify the content of this entry. 

Procurement costs associated with operating and owning a weapon system such as modifications, replenishment spares, ground equdpinent, etc. 

3

Mar 19, 80 

5000.2 (Annex C to Encl 3) 

DCP ANNEX C 

LIFE CYCLE COST 

ALTERNATIVE 

A I 

A 2 

A3 

0 

Q 

0 

CONSTANT DOLLARS (IN MILLIONS) 

DEVELOPMENT PRODUCTION 

OPERATING 

AND 

SUPPORT 

TOTAL - 

ALTERNATIVE 

cUR" DOUARS (IN MILLIONS) 

OPERATING 

AND 

DEVELOPMENT PRODUCTION SUPPORT TOTAL 

A I 

A 2 

A 3 

0 

0 

0 " 

4 

I 

,

Mar 19, 80 

5000.2 (Encl 4) 

INTEGRATED PROGRAM SUMMARY (IPS) 

FORMAT 

The IPS summarizes the implementation plan of the DoD Component for 

the complete acquisition cycle with emphasis on the phase the program is 

entering. Limit the IPS to 60 pages (inclusive of all annexes except 

Annex B) with no more than two pages required per topic. When further 

detail is available in a published study or plan, reference these 

documents in the IPS and provide them for inclusion in the Milestone 

Reference File (MRF)., Do not classify the IPS higher than SECRET. When 

possible, display data in numerical or tabular format. The following 

annexes are mandatory: 

A. Resources Cost Track Summary 

B. Resources Funding Profile 

C. Resources - Summary of System Acquisition Costs 

D. Manpower 

E. Logistics 

Include the topics indicated below in the IPS. If a specific item 

cannot be discussed due to the nature or timing of the acquisition process, 

provide a statement and explanation to that effect. 

1. Program History. Summa.rize previous milestone decisions and 

guidance, PPBS decisions, and significant Congressional actions affecting . 

the program. 

2. Program Alternatives. In addition to the program proposed by the 

DoD Component in the DCP, briefly describe each DCP alternative program, 

including its advantages and disadvantages. Do not duplicate data in the 

IPS annexes. 

3. Cost Effectiveness Analysis. Summarize the assumptions, methodology, 

statu, and results of any cost-effectiveness analyses prepared in support 

of the milestone decision. This section shall contain specific discussions 

of those aspects of the analyses that relate to the issues identified 

at the Milestone Planning Meeting. If the analysis supporting the 

recommended milestone decision is not complete at the time the IPS is 

submitted, describe the analytical and coordination tasks remaining and 

provide a schedule for completion of the analysis before the scheduled 

DSARC meeting. 

4. Threat Assessment. Pra:ih an up-to-date summary of the threat, 

including discussion of CIPs. At Milestones I, 11, and 111, a reaffirmation 

of program need shall be included. 

5. System Vulnerability. Describe vulnerability to detection, interference, 

and attack and program actions to minimize these vulnerabilities. 

Nuclear and nonnuclear survivability and endurance information shall be 

summarized. 

57

6. Organizational and Operational Concept. Describe the organizational 

structure associated with the system and the general system 

operational concept. Describe a typical mission profile or profiles and 

activity rates (wartime and peacetime). 

7. Overview of Acquisition Strategy. Describe the overall strategy 

to acquire and deploy a system to satisfy the mission need, referring to 

but not repeating other sections of the IPS. Discuss the rationale for 

any deviations from acquisition process prescribed in DoD Directive 5000.1 

(reference (b)) and this Instruction. Emphasis should be on the-next 

phase of the acquisition process. 

. . 

8. Technology Assessment. Summarize the degree to which technology 

planned for use in this program has been demonstrated. Identify technology 

risks and activities plgnned to reduce these risks. Discuss 

nuclear hardening technology and associated risks, as appropriate. 

9. Contractinq. Provide a summary 0.f information in the contracting 

plan. At a minimum, include: (a) the overall program contracting plan 

(introduction and maintenance of competition throughout the system lifecycle 

and plans for competitive breakout of components by both the 

government and the contractors); (b) contractor performance under 

contracts in the current program phase; and (c) major contracts to be 

awarded in the next program phase (summary of workscope, contract types, 

sources solicited and selected, scheduled award dates, special terms or 

conditions, data rights, warranties, estimated cost or price including 

incentive structures). 

IPS or documents in the MRF for additional detail. 

contractor sensitive data in this paragraph. 

When appropriate, reference other portions of the 

Do not include 

10. Manuf acturinp; and Production. Swmnarize the system' s production 

plan concentrating on those areas appropriate to the next phase. Refer to 

DoD Directive 5000.34 (reference (0)). Additionally: 

a. At Milestone I. Identify new manufacturing technology needed 

for each concept considered for demonstration and validation. Also identify 

deficiencies in the U.S. industrial base and availability of critical 

materials. 

b. At Milestone 11. Describe areas of production risk and provisions 

for attaining a producible design during the Full-scale Development 

phase and identify requirements for parts control, long lead procurement, 

and limited production. 

c. At Milestone 111. Summarize the results of the production 

readiness review and address the existence of a manufacturing design. 

Include nuclear hardening design in the summary, if appropriate. If 

the review is not complete at the time the IPS is submitted, describe the 

tasks remaining and provide a schedule for completion prior to the scheduled 

DSARC meeting. 

2

Mar 19, 80 

5000.2 (Encl 4) 

11. Data Management. Discuss how general engineering and data 

requirements imposed on contractors shall be selected and tailored to fit 

the particular needs of the program and the program manager and the degree 

of configuration management that shall be applied to the program. 

a. Application. Identify exceptions to use of approved specification, 

standards, their related technical and engineering data, special 

reports, terminology, data elements and codes to be used for program 

management. Refer to DoD Directive 5000.19 (reference (p)) and to DoD 

Directive 4120.21 (reference (9)). 

b. Work Breakdown Structure (WBS). Identify and explain any 

deviations from MILSTD 881A (reference (r)). 

c. Contractor Data Base. Discuss how the contractor’s internal 

data base shall be validated and used to provide essential information. 

Discuss also,whether or not contractor data products can be used as substitutes 

for DoD required reports. 

d. Levels of Details. Discuss how reporting burdens shall be 

minimized by using the highest level of the WBS that can serve management 

needs. 

12. Configuration Management. Identify interfacing systems and 

discuss the degree of configuration management planned for each phase. 

Also, explain any intended deviations from DoD Directive 5010.19 (reference 

(n> 1. 

13. Test and Evaluation. Describe test results to date and future 

test objectives. Based on the Test and Evaluation Master Plan, include a 

narrative description of the overall test strategy for both Development 

Test and Evaluation and Operational Test and Evaluation. Refer to 

DoD Directive 5000.3 (reference (1)) . 

14. - Cost. Address the elements Iisted below. Make the discussion 

consistent with Annexes A, B, and C and address such displays in expanded 

detail, if appropriate. 

a. Life-Cycle Cost. Discuss the underlying assumptions pertaining 

to the life-cycle cost estimates, including the impact of Foreign 

Military Sales, cooperative development or production, planned production 

rates, and learning curves for each of the alternatives in the DCP. 

b. Cost Control. Discuss cost control plans to include the following 

items: 

(1) Assumptions on which the proposed program cost thresholds 

were determined. 

(2) Proposed Design-to-Cost goals and how they shall be 

implemented at the contract level. Refer to DoD Directive 5000.34 

(reference’(0)) and to DoD Directive 5000.28 (reference (s)!. 

3

(3) Exceptions to implementation of Cost/Schedule Control 

Systems Criteria and alternative cost control procedures to be used. Refer 

to DoD Instruction 7000.2 (reference (t)). 

c. Production 

(1) Milestone I. Discuss the economics for establishing a 

second production source for the preferred alternative. Estimate the 

increased costs or savings from competitive production sources. Production 

quantities and prodiiction rates for this estimate shall be determined 

at the Milestone Planning Meeting. 

(2) Milestones 11-and 111. Provide an analysis of variation 

in unit cost with production rate which identifies efficient production 

rates. 

d. Programing and Budgeting. Discuss the sources and applica- ~ 

tions of funds, as necessary, to explain IPS Resource Annex C. 

15. Logistics. Summarize information contained in the Integrated 

Logistics Support Plan and present related management issues and risk 

areas. Display backup data in Annex E. Refer to BOD Directive 4100.35 

(reference (m)). Additionally: 

a. At Milestone I 

(1) Identify mission requirements (including any NATO member 

requirements) that significantly impact upon system design features and 

support concepts. 

(2) Identify subsystems and logistic elements that drive 

support cost and readiness of similar current systems and identify areas 

for improvement in new system design efforts. 

(3) Identify subsystems and major items of equipment that are 

common to other programs and systems and describe standardization approach. 

(4) Define the support concept alternatives to be considered, 

including the levels of maintenance for each alternative. 

(5) Identify major support equipment requiring new development. 

(6) Identify new technology items that require advances in 

repair technology. 

(7) Identify all estimated RDTW funding to be allocated to 

support planning and analysis by program phase. 

4

- 

Mar 19, 80 

5000.2 (Encl 4) 

b. At Milestones I1 and 111. Update the information provided at 

the previous milestone. Additionally: 

(1) Identify R&M test results to date and the quantitative 

effect on support resource requirements, such as manpower, spares, depot 

maintenance, to meet readiness objectives. 

(2) Estimate the capability of current and planned support 

systems to meet logistic objectives, such as resupply time, maintenance 

turn-around-time, and automatic test equipment production rate and capacity. 

(3) Identify contract provisions for logistics support, such 

as parts control and interim contractor support. Do not repeat information 

contained in the Contracting section of the IPS. 

(4) Identify any subsystems considered for long-term contractor 

support and the analysis leading to contractor support decisions. 

(5) Provide a reference to the document that includes the 

leadtimes and activation dates for each level of organic support capability. 

16. Reliability and Maintainability. Define each R&M parameter that 

applies to the system proposed in the DCP and summarize RSCM achievements 

of- the preceding- phase- Describe R&M requirements for the next phase. 

Additionally: 

a. At Milestone I. Establish a tentative design goal (or a range 

of values) at the system level for each applicable R&M,patameter. These 

goals shall be responsive to projected needs of the mission area and 

realistic in comparison to measured R&M values of similar systems. 

b. At Milestone I1 

(1) Show that operational R&M problems, typical of similar 

systems, have been addressed in design, by careful selection of GFE, and by 

tailoring operating and support concepts. 

(2) Identify major GFE elements of the new system and provide 

some indication of how reliable and maintainable they are in similar 

applications. State the source of this information. 

(3) Establish a specific goal and threshold for each applicable 

RSlM parameter to be attained prior to Milestone 111. 

(4) Display predicted R&M growth as a series of intermediate 

points associated with thresholds for full-scale development. 

c. At Milestone 111. Display predicted R&M growth as a series of 

intermediate points associated with thresholds for production and deployment. 

5

17. Quality. Summarize the independent quality assessments required 

by DoD Directive 4155.1 (reference (j)) and provide the status of action 

taken or in process as a result of the recomendations contained in the 

independent quality assessments. 

18. Manpower. Specify the system activity level used to estimate and 

compute the system manpower requirements presented in the annex. Indicate 

whether this activity represents a combat surge, sustained combat, precombat 

readiness , or other posture (specify). Also specify the available 

hours per person, per month used to compute numbers of people from workload 

estimates (not required at Milestone I). List any other critica1 

assumptions that have a significant bearing on manpower requirements. 

Discussion of manpower requirements shall be consistent with Annex D and 

provide supporting detail as appropriate. Additionally: 

a. At Milestone I 

(1) Summarize manpower sensitivity to alternative employment 

concepts being considered. 

(2) Identify parameters and innovative concepts to be 

analyzed during the next phase such as: new maintenance concepts and 

organization; new concepts or technologies to improve personnel 

proficiency and performance. 

b. At Milestone I1 

(I) Summarize the significant manpower implications of tradeoffs 

conducted among hardware design, support characteristics, and support 

concepts e 

(2) Explain briefly significant manpower differences in 

comparison with a reference system, considering design, support concept, 

and employment objective. The reference system should be one that is 

being replaced by the new system, performs a similar function, or has 

similar technological characteristics. 

(3) Quantify the sensitivity of manpower requirements to the 

proposed maintenance related reliability and maintainability goals and to 

system activity rates. 

(4) Describe the sources of manpower for the new system. 

Summarize projected requirements versus projected DoD Component assets in 

critical career fields. Identify new occupations that may be required. 

(5) Include schedules for: 

(a) Further trade-off analyses among design and support 

elements impacting manpower, 

(b) Job task identification, 

6

Mar 19, 80 

5000.2 (Encl 4) 

development, and 

(c) The manpower analyses planned during full-scale 

(d) Planned T&E to verify the manpower estimates and 

underlying assumptions. 

c. At Milestone I11 

(1) Explain changes from manpower estimates presented at the 

previous milestone. Quantify manpower sensitivity to the maintenance 

related reliability and maintainability levels demonstrated, to those 

proposed, and to system activity levels (including wartime surge). 

(2) Identify shortfalls in meeting requirements by occupation. 

Assess the impact on system readiness of failure to obtain required 

personnel. Identify new occupations not yet approved and programed into 

DoD Component personnel and training systems. 

(3) Summarize plans for evaluating manpower requirements 

during follow-on test and evaluation. 

19. Training 

a. At Milestone I. Identify-any significant differences in the 

training implications of the alternative system considered. 

b. At Milestone I1 and I11 

(1) Summarize plans for attaining and maintaining the required 

proficiency of operating and support personnel, quantifying the 

scope and duration of formal training, time in on-the-job and unit 

training, use of simulators and other major training devices in formal and 

unit training and use of other job performance and training aids. 

Identify anticipated savings from use of simulators or other training 

devices. 

(2) Provide a summary by fiscal year and occupation of all 

formal training requirements for the proposed system, identifying numbers 

of personnel trained and training costs (including facility modifications). 

Separately identify the net impact on special emphasis training programs 

such as undergraduate flight training. 

c. At Milestone 111 Also 

(1) Summarize plans and additional resources required to 

train the initial component of operating and support personnel for unit 

conversion to fielded systems. 

(2) Summarize plans for training reserve component personnel 

whose mission requires operation or support of the system. 

7 

G3

(3) Reference plans for validation of proficiency criteria 

and personnel performance. 

20. Facilities. Describe any new government or industry facilities 

required for production or support of the system. Summarize how these 

facilities are to be made available. Identify cost and schedule 

constraints, such as training, testing or maintenance, imposed by 

facilities limitations. 

21. Energy, Environment, Health and Safety. Summarize the environmental 

and energy impacts of developing, producing, and operating the DCP 

systems alternatives. 

a. Specifically, for energy considerations: 

(1) At Milestone I. Establish tentative design goals, or 

range of values, for energy efficiency and Substitution at the system 

level that are responsive to projected needs of the mission area. These 

goals should be shown in comparison to energy efficiency and substitution 

capability of similar systems. 

(2) At Milestone 11. Establish firm energy related goals 

when appropriate and state trade-offs made between the.design, operating 

concepts, simulators, and any substitution objectives. 

(3) At Milestone 111. Review energy consumption projections 

and efficiencies and their sensitivities to system populations. 

b. Additionally, prior to the Milestone I1 and I11 decisions, 

summarize the results of system health and safety analyses and assessments 

and specify actions pending on any unresolved significant system health or 

safety hazards. Cite management decisions, if any, to accept the risks 

associated with significant identified hazards. 

c. List environmental documentation prepared in accordance with 

DoD Directive 6050.1 (reference (i)). 

22. Computer Resources. Address the following factors: 

(a) 

Interface requirements. 

(b) Computer programs and documentation required to support the 

development, acquisition, and maintenance of computer equipment and other 

computer programs. 

(c) Plans for maintenance and update of software after initial 

system operating capability has been achieved. 

23. International Programs. Summarize action taken with regard to 

NATO RSI considerations listed in paragraph E.14. of the basic Instruction 

and identify approved, pending, and potential Foreign Military Sales. 

8

.- 

IPS A"!3X 

RESOURCES - COST TRACK SUMMARY 1 

(Millions of Dollars) 

A 

5000.2 

%r 19, 80 

(Annex A to Encl 4) 

WELOPMENT PHASE. 

RDT&E 

Validation Phase 

Full Scale Development 

Contractors 

(Provide one level of WBS indenture 

based on program requirements) 

In-House 



Continqency IService) 

TOTAL RDTSE APPROPRIATION 

MILCON 

om 5 

MILPERS 5 

TOTK DEVEIOPXENT PHASE 

XODUCTION PHASE 

P- 

system cost 7 

Flyaway 



Other System Costs 

Initial Spares 

Other Line Item procurement^ 8 

TOTK PRCCUREMZ?4T APPRDPRIATION 

MILCON 

om 5 

MILPERS 

TCTAL. PRODUCTION PHASE 

XAL OPERATING C SUPPORT PHASE 

Ey Constant 

1 

(Base Ye; 

Planning/ 

I 

Development 

Estimate ?:e) 

I 

I S 

Current 

Estimate Ii 

I 

Current 

I 

?TAL LIFE CYCLE RepOI-S 

JEPAGE ANNUAL SYSTM (36s COSTS 

No. of Systems: 

No. of Years: 

]. Apply footnotes as required to explain the chart. Ad~ustments to format are authorized to accornmcdate grogram; 

stub entries vi11 be decided on at the initial Milestone Planning Meeting. Definitions should be in accordance 

with Don Instruction 5000.33 (reference (u)). 

2 Identify basis for estimate and date of SDDM. 

3 Add columns as necessary for each SDDM rwision. 

4 The preferred alternative or the latest approved baseline cost estimate contained in the SDDM will be show an both 

constant and current (escalated) estiaate columns. 

5 Other Life Cycle related costs (1.e.. Installation, Project Manager Office, Civilian Salaries. etc.) funded by 

O M and MILPERS during Developmnt and/or Production phase. 

6 Enter Quantity. 

7 Rual to Weapon System Cost as defined in DOD Inst=fqa 5000Q3 (refFreqce (u)). 

8 Production Base support (Industrial Facilities), shore-based traini~g&cilifies, aad other system peculiar costs 

Identified as a separate line item, or as a portion of a separate line item, in another part af the Procurement 

Budget. Identify the content of this-entry. 

s: Reasons €or significant variations in estmate should be explained by footnote (e.9.. schedule 

slippage, Congressional €unding. etc. . 

9

IPS ANNEX c 

RESOURCES - SUMMARY OF SYSTEM ACQUISITION COSTS 

Mar 19, 80 

5000.2 (Annex C to Encl 4 ) 

1 

SOURCES OF FUNDING 

CURRENT DOLLARS 

(MILLIONS ) 

Department of the Amy 

Program Element xxlwl 

Program Element 

Department of the Navy 

Program Element XXZMX 

Department of the Air Force 

Program Element XBXX 

Defense Agencies 

Program Element XZX 

Other U.S. Government 

xMw[ 

Other Foreign XXMM - 

TOTAL FUNDING 

APPLICATIONS 

CURRENT DOLLARS 

(MILLIONS) 

Major System Equipment 

System Project Manager 

System Test and Evaluation 

Peculiar Support Equipment 

Training 

Data 

XXXMI: 

Xxxxx 

XMMX 

XMMX 

Xxxxx 

Operakional Site Acquisition 

Industrial Facilities 

Common Support Equipment 

Initial Spares and Repair Parts 

xxxxx 

Xxxxx 

TOTAL FUNDING 

1 Refer to DoD Instruction 5000.33 (reference (u)). 

11

IPS ANIFEX D 

MANPOWER 

Mar 19, 80 

5000.2 (Annex D to Encl 4) 

The IPS will have a one page Manpower annex including the following: 

1 

A. Current manpower estimate for military force structure: 

UNIT MANNING 

PROGRAM TOTALS 

* PROGRAM REFERENCE NO. OF4 ACTIVE RESERVE 

UNIT TYPE ALTERNATIVE SYSTEM UNITS MILITARY COMPONENT OTHER 

B. Contractor6support and depot workload (Annual manhours per end item 

deployed) : 

DSARC System 

Reference System 

Contractor Support (below depot) 

Depot Level Workload 

C. Net Change in Total Force Manpower associated with the proposed 

system deployment: 

Number of Authorizations 

Active Forces Reserves DoD Civilians 

1 Not required at Milestone 1. 

2 List each unit type that will operate the system/primary system 

elements, including unit types that provide imtermediate maintenance 

of system components. Examples of unit types are "Tank Battalion," 

"Munitions Maintenance Squadron," "Avionics Intermediate Maintenance 

Department. '' 

3 For each unit type, show the manning required to satisfy the most 

demanding mission (normally combat employment, but may be precombat 

readiness for certain naval vessels and systems on alert). 

Show total unit manning for operating units, organizational level 

direct support units, and dedicated intermediate support units. 

For units that provide intermediate level support to many primary 

systems, such as naval shore based intermediate maintenance 

departments, show manning equivalent of the man years of work attributable 

to program the alternative. Denote manning equivalents with an asterisk. 

12

4 

5 

6 

Number of units of each type in the phIned force structure for the 

program alternative. 

Multiply number of units by unit manning, and equivalent manning 

by quantity of systems deployed, to obtain total manning required 

for units operating and/or supporting the program alternative system. 

Show how these requirements are expected to be satisfied as: active 

military authorizations, reverse component authorizations, and/or 

other to be identified in footnote. Unprogramed requirements must 

be shown as "other." 

Annual man years of below-depot contractor support divided by the 

planned quantity of the system in the force structure, and the annual 

man years for depot level maintenance of the system and its components 

divided by the planned quantity of the system in the force structure. 

Not required at Milestone I. 

13

Mar 19, 80 

5000.2 (Annex E to Encl 4 ) 

IPS ANNEX E 

LOGISTICS 

The IPS will have a one-page Logistics Annex. The following provides 

general format guidance, but should be tailored to meet the needs of 

each new system. 

1. System Readiness Objectives 

Peacetime Readiness 3 

Wartime Employment 4 

2. Design Parameters 

Reliability 5 

Maintainability 6 

Built-in-test Effectiveness 7 

3. Logistics Parameters 

Resupply Time 

Spares Requirement 8 

1 

New System 

2 

Ale. 1 Alt. 2 Alt. 3 Current System 

1 

2 

3 

4 

5 

6 

7 

8 

Include one column for each program alternative. For each parameter 

provide an estimate at system maturity based on analyses and tests to date. 

Identify a comparable system in current operation. 

Appropriate peacetime measures such as Operational Readiness at peacetime 

utilization rate, supply and maintenance downtime rates. 

Appropriate wartime measure for the system such as sortie generation 

rate,.operational availability at combat utilization rate, station 

coverage rate. 

Appropriate logistic-related reliability parameters such as mean time 

between maintenance actions or removals. 

Appropriate maintainability measures for the system such as mean time to 

repair, maintenance manhours per maintenance action. 

If applicable to the system, include fault detection, fault isolation, 

and false alarm rates. 

Estimate of spares investment required to meet system readiness 

objectives at stated logistic-related reliability levels. May be stated 

as requirement per site or operating unit, or for entire fleet, as 

appropriate 

14

_- 

Mar 19, 80 

5000.2 (Encl 5) 

DOD POLICY ISSUANCES RELATED 

TO ACQUISITION OF MAJOR SYSTEMS 

A. DEFENSE ACQUISITION REGULATION 

(FORMERLY ARMED SERVICES PROCUREMENT REGULATION) 

B. ADMINISTRATION - GENERAL 

4105.55 (D) Selection and Acquisition of Automatic Data 

Processing Resources 

4275.5 (D) Acquisition and Management of Industrial Resources 

5000.4 (D) OSD Cost Analysis Improvement Group 

5000.16 (D) Joint Logistics and Personnel Policy and 

Guidance (JCS Publication No. 3) 

5000.23 (D) System Acquisition Management Careers 

5000.29 (D) Management of Computer Resources in Major - 

Defense Systems 

5100.40 (D) Responsibility for the Administration of the 

DoD Automatic Data Processing Program 

5220.22 (D) Department of Defense Industrial Security 

Program 

5500.15 Review of Legality of Weapons Under International 

Law 

7920.1 (D) Life Cycle Management of Automated Information 

Systems (AIS) 

7920.2 (D) Major Automated Information System 

Approval Process 

c. ADMINISTRATION - STANDARDIZATION OF TERMINOLOGY 

5000.8 Glossary of Terms Used in the Areas of 

Financial, Supply and Installation Management 

5000.9 (D) Standardization of Military Terminology 

5000.11 (D) Data Elements and Data Codes Standardization 

Program 

5000.33 Uniform Budget/Cost Terms and Definition 

73

D. COI"ICATION/INFORMATION MANAGEMENT 

5000.19 

5000. 20 

5000.22 

5000.32 

5230.3 

C-5230.3 

5230.4 

5230.9 

5400.4 

5400.7 

Policies for the Management and Control of 

Information Requirements 

Management and Dissemination of Statistical 

Information 

Guide to Estimating Cost of Information 

Requirements 

DoD.Acquisition Management Systems and 

Data Requirements Control Program 

Information Releases by Manufacturers 

Public Statements on Foreign and Military 

Pol'icy and on Certain Weapons (U) 

Release of Information on Atomic Energy, 

Guided Missiles and New Weapons 

Clearance of Department of Defense Public 

Information 

Provision of Information to Congress 

Availability to the Public of Department of 

Defense Information 

E. CONTRACT MANAGEMENT 

1100.11 (D) 

4000.19 (D) 

4105.60 

4105.62 (D) 

4140.41 

4160.22 (D) 

Equal Emplo'pment Opportunity, Government 

Contracts 

Basic Policies and Principles for Interservice, 

Interdepartmental and Interagency 

Support 

Department of Defense High Dollar Spare Parts 

Breakout Program 

Selection of Contractual Sources for Major 

Defense Systems 

Government-Owned Materiel Assets Utilized 

as Government-Furnhhed Materiel for Major 

Acquisition Programs 

Recovery and Utilization of ?retious Metals 

2

Mar 19, 80 

5000.2 (Encl 5) 

5010.8 (D) DoD Value Engineering Program 

7800.1 (D) Defense Contract Financing Policy 

F. INTEGRATED LOGISTICS 

4100.35 (D) Development of Integrated Logistic Support 

for Systems/Equipments 

4130.2 (D) The Federal Catalog System 

4140.19 Phased Provisioning of Selected Items for 

Initial Support of Weapons Systems, Support 

Systems, and End Items of Equipment 

4140.40 (D) Basic Ojectives and Policies on Provisioning 

of End Items of Materiel 

4140.42 

Determination of Initial Requirements for 

Secondary Item Spare and Repair Parts 

/ -', 

4151.7 Uniform Technical Documentation for Use in 

Provisioning of End Items of Materiel 

4151.15 Depot Maintenance Programtning Policies 

5100.63 Provisioning Relationships Between the Military 

Departments/Defense Agencies and Commodity 

Integrated Materiel Managers 

G. INTERNATIONAL COOPERATION 

2000.3 

2000.9 

2010.6 

2010.7 

2015.4 

2035.1 

(0 1 International Interchange of Patent Rights 

and Technical Information 

(D 1 International Co-Production Projects and 

Agreements Between the U.S. and other 

Countries or International Organizations 

(D 1 Standardization and Interoperability of 

Weapon Systems and Equipment within the 

North Atlantic Treaty Organization (NATO) 

01 Policy on Rationalization of NATO/NATO Member 

Telecommunication Facilities 

Mutual Weapon Development Data Exchange 

Program (MWDDEP) and Defense Development 

Exchange Program (DDEP) 

(D 1 Defense Economic Cooperation with Canada 

3

2045.2 

2100.3 (D) 

Agreements with Australia and Canada for 

Qualification of Products of Non-Resident 

Manufacturers 

United States Policy Relative to Commitments 

to Foreign Governments Under Foreign Assistance 

Programs 

2140.1 Pricing of Sales of Defense Articles and 

Defense Services to Foreign Countries and 

International Organizations 

2140.2 (D) Recoupment of Nonrecurring Costs on Sales 

of USG Products and Technology 

3100.3 (B) Cooperation with Allies in Research and 

Pevelopment of Defense Equipment 

3100.4 (D) Harmonization of Qualitative Requirements 

for Defense Equipment of the United States 

and Its Allies 

3100.8 The Technical Cooperation Program (TTCP) 

4155.19 NATO Quality Assurance 

5100.27 (D) Delineation of International Logistics 

Responsibilities 

5230.11 (D) Disclosure of Classified Military Information 

.to Foreign Governments and International 

Organizations 

5230.17 (I)) Procedures and Standards for Disclosure of 

Military 1nfo.rmation to Foreign Activities 

5530.3 (D) International Agreements 

8. PLANS - CONSERVATION OF RESOURCES 

4170.9 Defense Contractor Energy Shortages and 

Conservation 

6050.1 (D) Environmental Effects on the United States 

of DoD Actions 

4 

J

Mar 19, 80 

5000.2 (Encl 5) 

r. PLANS - MATERIAL AVAILABILITY, WAR RESERVE AND MOBILIZATION 

3005.5 (D) 

Criteria for Selection of Items for War 

Reserve 

i 

'- 

4005.1 (D) 

4005.3 

4005.16 (D) 

4100.15 (D) 

4151.16 (D) 

4210.1 

4210.7 

4210.8 

4410.3 

4410.4 (D) 

5160.54 (D) 

5220.5 (D) 

DoD Industrial Preparedness Production 

Planning 

Industrial Preparedness Production Planning 

Procedures 

Diminishing Manufacturing Sources and 

Material Shortages (DMSMS) 

Commercial or Industrial-Type Activities 

DoD Equipment Maintenance Program 

Department of Defense Coded List of Materials 

Controlled Materials Requirements 

Department of Defense Bills of Materials 

Policies and Procedures for the DoD Master 

Urgency List (MUL) 

Military Production Urgencies System 

Industrial Facilities Protectiorr Program - 

DoD Key Facilities List 

Industrial Dispersal 

J. PRODUCTION, QUALITY ASSURANCE, TEST AND EVALUATION 

4155.1 (D) Quality Program 

4200.15 Manufacturing Technology Program 

5000.3 (D) Test and Evaluation 

5000.34 (D) Defense Production Management 

5000.38 (D) Production Readiness Reviews 

5010.20 (D) Work Breakdown Structures for Defense 

Materiel Items 

.__ ' 

5 77

5160.65 (D) 

Single Manager Assignment for Conventional 

Ammunition 

K. RESOURCE MANAGEMENT 

7000.1 (D) 

7000.2 

7000.3 

7000.10 

7000.1I 

7041.3 

7045.7 

7200.4 (D) 

Resource Management Systems of the 

Department of Defense 

Performance Measurement for Selected 

Acquisitions 

Selected Acquisition Reports (SAR) 

Contract Cost Performance, Funds Status 

and Cost/Sshedule Status Reports 

Contractor Cost Data Reporting (CCDR) 

Economic Analysis and Program Evaluation 

for Resource Management 

The Planning., Programming and Budgeting 

System 

Full Funding for DoD Procurement Programs 

L. TECHNICAL MANAGEMENT - GENERAL 

1130.2 

4630.5 

5010.12 

5010.19 

5100.30 

5100.36 

5100.38 

5100.45 

5200.20 

5200.21 

Management and .Control of Engineering SI 

Technical Services 

Compatibility and Commonality of Equipment 

for Technical Command and Control, and 

Communications 

Management of Technical Data 

Configuration Management 

Worldwide Military Command and Control 

Systems (WCCS) 

Department of Defense Technical Information 

Defense Documentation Center for Scientific 

and Technical Information (DDC) 

Centers for Analysis of Scientific and 

Technical Information 

Distribution Statements on Technical Documents 

Dissemination of DoD Technical Information 

6

Mar 19, 80 

5000.2 (Encl 5) 

7720.13 

7720.16 

.Research and Technology Work Unit 

Information System 

Research and Development Planning Summary 

(DD Form 1634) for Research and Development 

Program Planning Review 

M. 

TECHNICAL MANAGEMENT - DESIGN PARAMETERS 

3224.1 (D) 

Engineering for Transportability 

* . 

4100.14 

4120.3 (D) 

4120.11 (D) 

4120.18 (D) 

4120.19 

4120.20 

4120.21 (D) 

4140.43 (D) 

4151.1 (D) 

4151.9 

4151.11 

4151.12 

4500.37 

Packaging of Materiel 

Defense Standardization and Specification 

Program 

Standardization of Mobile Electric Power 

Generating Sources 

Metric System of Measurement 

Department of Defense Parts Control System 

Development and 'Use of Non-Government 

SpecifiCations and Standards 

Specifications and Standards Application 

Department of Defense Liquid Hydrocarbon 

Fuel Policy for Equipment Design, Operation, 

and Logistics Support 

Use of Contractor and Government Resources 

for Maintenance of Materiel 

Technical Manual (TM) Management 

Policy Governing Contracting for Equipment 

Maintenance Support 

Policies Governing Maintenqnce Engineering 

within the Department of Defense 

Ownership and Use of Containers for Surface 

Transportation and Configuration of Shelters/ 

Special-Purpose Vans$ 

7

4500.41 

C-4600.3 

4630 e 5 

5000.28 

5000.36 

5000.37 

Transportation Container Adaptation and 

Systems Development Management 

(D 1 Electric, Counter-Counter Measures (ECCH) 

Policy (U) 

(D) 

(Dl 

Compatability and Commonality of 

Equipment for Tactical Command and 

Control and Connnunications 

Design-to-Cost 

System Safety Engineering and Management 

Acquisition and Distribution of Commercial 

Products 

5100.50 

5148.7 

6055.2 

(D 1 

(Dl 

Protection and Enhancement of Environmental 

Quality 

The Joint Tactical Communications 

(TRI-TAC) Program 

Personal Protective Equipment 

8 

/ 

/

.. . 

',i 

su#ct 

The Plapaiag, Programnring, and Budgeting System' 

/ 

'L 

Refs: (a) DoD Mrective Tooo.1, "Resource Managanent Systems of the 

Department of Defehe," August 22,-1* 

Sec De% Wtiaddressed MemOrsnQmn, "Interim Operating 

Procedure (POP) Number 1," June 21, 1969 (hereby cancewed) 

DoD Instruction mO.1, "Guidance for the Prmatioa of 

Budget Estimates, Budget Execution Programs. and Apportionment 

Requests aha Relatd Support Materials," 

August 23, 1968, alndMaaual (7llO.1-M) 

D~D Instructioa 7060.2, "~nternetiond mace of Payments 

Program-Accounting, Reporting, Eetimatbg end Establishing 

Targets," January 16, Is9 

DoD Instruction 7041.3, "Econamic Analysis of Proposed DOD 

Investments," February 26, 1969 

DoD Instruction 7045.7, "Revlew and Approval of Changes to 

the Five Year Defense Program," December 22, 1967 (hereby 

cancelled) 

DoD Instruction 7045.8, "Updating the Five Y-az Defense 

Program (mp)," May 23, 1968 

DoD Instruction 7045.5, "Functional Reviews," August 31, 

1965 (shereby cancelled) 

DoD Instruction 7040.5, "Definition of E&penseB and Investment 

costs," Sqtember 1, Lg66 

mD Directive 32OO.-, "Developnent Concept Papers (DCP) 

System" (to be published) 

I)oD Instruction 7250.10, "Imglementation of Reprogramming of 

Appropriated Funds March 5, 1963 

I. 

11. 

PURFOSE 

This Instruction establishes proce- guidance for: (a) processing 

changes to the approved resources of the RLve Year Defense 

Program (FYDP), (b) suhissiou, analysis, review, and approval of 

new and revised Department of Defense programs and budgets, and (c) 

maintenance and upbting of the FYIIP structure. It authorizes the 

publication, maintenance, and review of the FYDP Codes and Definitions 

Handbook (7045.7-H) in ~lrpport of reference (a). 

APPLICABILITY AND SCOPE 

A. The &visions of this Instruction apply to all of the Department 

of Defense. 

83

B. The scope of the Five Ye= Defense Program Kill include force, 

manper and cost data and inf'onnation covering the prior, 

current and succeeding fiscal years. The force structure will 

include data and infomation for the prior fiscal years, current 

fiscal year, budget year, and seven succeeding fiscal years. 

Cost and msspower data will be included for the prior fiscal 

years, went fiscal year, budget year, and the four succeeding 

fiscal years. 

111. DEE?CI'?I!CIONS 

A.. 

b. 

Approved Program - Resources (Forces, Manpower, Obligational 

Authority and Materiel) for iDdiVfdual'prdgMM elements reflected 

in the FYYP, as modified by Sebretary of Defense decisions. 

B. 

C. 

D. 

E. 

F. 

G. 

Budget Costs - Coating used iu budget'mbmissions as distinguished 

from costing used PrograPaning domueqts,, hereimer referred 

to as programming costs. Budget costs represent the specific TOA 

requirements for funds in a particulas fiscal period arrd generdy 

represent a refinement of programing costs. 

Budget Year - That flscal ye8r arrived at by add5ag one to the 

current fiscal yew. In fl8c8& year 1970, the budget year is 

fiacal yeaz l9"I. 

Program/Budg et Re&r 'Schedule - An annudl Secretarg of Defense e 

memorandzrm issued to anounce the schedule of significant events 

impacting oh the DoD decision-making cycle. 

Cost Category - One'of three types of costa into which the total 

cost of a program element is divided: (1) research and develop- 

meat, (2) investaent, and' (3) operations. (See DoDI 7040.5, 

reference (i) . ) 

Development Concept Paper ( ECPl - A document prepared by the 

Director of Defense Research and Engineering - (DDMZ) . and coordinated 

with key DoD officials providing a summary &agexnent 

document for the Secretary of Defense. DCPs reflect the Secretary 

of Defense decisions on important develapment and engineering 

modification programs. The document serves 88 a source of p?bnary 

information and rationale and for updating the Pyap. (See 

reference ( j ),..) 

Fiscal Guidance - Annual guidance issued by the Sec&sry of 

Defense which provide8 the Flscd constraints that must be observed 

by ?;he JCS, the Military Departments, and Defense Agencies, .in the 

formulation of force structures and Five Year Defense Programs, 

end by the Secretary Of 'D&fkse stsff in revidng proposed 

programs 

2

H. Five Yeax Defense Program (FYDP) - The official program which 

summarizes the secretary of Defense approved plans and programs 

for the Department of Defense. The FYDP is published at least 

,once anuuaUy. The FiDp is also represented by a computer data 

base which is updated regularly to reflect decisions. 

I. 

J. 

K. 

L. 

M. 

N. 

0. 

P. 

Joint Force Memorandum (JEM) - A document prepared annually by 

the JCS and submitted to the Secretary of Defense which provides 

recommendations on the joint force program within the fiscal 

guidance issued by the Secret= of Defense. 

Joint Research and Development Objective Document (JIUXID) - A 

document prepared annually which provides the advice of the JCS 

to the Secretary of Defense concerning R&D objectives necessary 

to carry out the strategy and force recommendations in the JSOP. 

. . 

Joint Strategic Objectives Plan (JSOP) - A document prepared 

annu- which provides the advice of the Joint Chiefs of Staff 

to the President snd the Secretary of Defense on the military 

strategy and force objectives for attaining the national 

security objective of the United States. In addition to recommendations 

on major forces, it includes the rationale supporting 

the forces and assessment of risks associated *herewith, costs 

and manpower estimates, and other swrting data. The JSOP is 

published in three volumes: I 

Force Tabulations, and 111 - 

- Strategy, I1 - Analysis and 

me World Forces. 

Program - A combination of program eleznenjzs designed to express 

the accamplishment of a definite objective or plan which is 

specified as to the time-phasing of what is to be done and the 

means proposed for its accomplishment. Programs are aggregations 

of program elemente, and, in turn, aggregate to the total FYDP. 

Program Chawe Decision (PCD) - A Secretary of Defense decision, 

in prescribed format, authorizing changes to the Five Year Defense 

Program. (gee Enclosure 3.) (Also aee Progran/Eudget 

Decision (PED) .) 

Program Chawe Request (PCR) - Proposal in prescribed format for 

out-of-cycle changes to the approved data in the ,Five Year 

Defense Program. (See Enclosure 2.) 

Program Decision Memorandum (PIX). - A document which provides 

decisions of the Secretary of Dcfenae on m s and the JZM. 

Program Element - A description of a missiun by the identification 

of the organizational entities and resources needed to 

perfom the assigned mission. Resources consist of forces, rnr:-- 

per, material quglIltities, and costs, as applicable. The pmsrm. 

element is the basic building block of the FYDP. 

. 

3 

8 s-

9. Pl~ninR/Progra~/~~etinq System (PPBS) - An integrated 

system for the establishment, maintenance, and revision of the 

FYDP ma the DOD budget. 

R. Proe;ram/Budget Decision (PBDL - A Secretary of Defense decision 

in prescribed formst authorizing changes to a submitted budget 

estimatesand the FYDP. (See Errclosure 3.) 

S. Programming Cost - Cost data fbr making program decisions. 

Frograming costs are based on sets of factors which w ill 

provide consistent cost data under the same or similar circumstances, 

and which are directly related to the explicit elements 

, of the program decision. 

T. Program Objective Memorandum (POMi - A memor8ndum in prescribed 

format submitted to the Secretary of Defense by the Secretary of 

a Military Department or the Director of a Defease Agency which 

reconmends the total resource reqpireuents within the parameters 

of tbe published Secretary of Defense fiscal guidance. (See 

Enclosure 1.) 

IV. 

U. Program Year - A fiscal year in the five Year Defense Program 

that ends not earlier than the second year beyond the current 

calendar year. Thus, during calendar year 1969, the first 

program year is Fy 1971. 

V. 

Total Obligational Authority (my - The total financial requirements 

of the RLve Year Defense Program or any cwnent thereof 

required to support the amroved program OP a given Fiscal year. 

CANCELUTIONS 

.I * 

References (b), (fj3 and (h), are hereby cancelled. 

V. PRCGRAM/BUEGEL'RevIEwScBErfJIrE 

!The Secretary of Defense will piblish an annual memorandum mhding 

a schedule of significant events for the current year. This memorandum 

Will be issued prior to the SUbaDission of JSOP, Volume I, and 

will be revised aa necessary. Itwlll identify: 

A. The base program from which all prapoeed changes will be made by 

publication of "aa of" date. 

B. The sch-e fer the 8Iibmiasion of the Joint Strategic Objectives 

Plan (JSOP) the Joint Research and Developnent Ubdectivee Document 

(JRDODS , and the Joint Force Memorandum (JIM), by the Joint 

Chiefs of Staff. 

C. Specific dates for the submission of tim Program Objectives 

Memranda, 

I 

) 

I 

4

7345.7 

Oct 29, 59 

D. 

E. 

F. 

G. 

H. 

I. 

Schedubes for the issuance of Secretary of Defense Strategic 

Guidance, Hacd Guidance, Loglatic Guidance, and Program 

Decision Meaoranda. 

Dates for the subnia8ion of the DoDbudget estimates. 

Identification o f special reviews and studies to be conducted 

during the calendar cycle and identification of the primary 

action office. 

A date for the inclusion of an additional yeax to the FWP. 

Date for the MBjor Budget Issue meetings between ,the Secretary 

of Defense, the Chairman of the Joint Chiefs of Staff, and the 

Militcrty Ikpartment Secretaries. Date ior similar meeting to 

discuss Mqjor Force Issue8 will be announced by the Secretary 

of Defense aa necesaay by separate memorendum. 

Other items having en impact ou the decision-inaking cycle. 

VI- 

STRATEGIC OaTECTIVEs 

L -’ 

A. The Joint chiefs of Stsff will prepare Volume.1 - Strategy, cf 

the JSOP to be e t t e d to the Secretary of Defense. Volume I 

KLU provfde the statement by tfie JCS of the national security 

objectives, based ou deciaioas of the President, and the military 

objectives.derivsd tbrefzun. It will indude atary strategic 

concept8 and objectives ou a world-wide and regional basis. 

B. The Secretary of Defense w i review ~ volume I, J~OP, ‘and will 

then issue appropriate guidance on strategic concepts for comment 

by the JCS. This guidance memorandum may update and/or enlarge 

qon the strategy in Volume I based on changes Tu national security 

objsctives or cannnitments as provided by the President. When a 

change in netional security objectives, commitments, or in stratecy 

is indicated, the variation in risks, if any, w i U also be 

addressed. After review and consideratioti of the JCS comnents, 

the Secretary of %feme wi3l reissue the guidance memorandun 

which, along with Voltrme I, will serve as a planning docunent in 

the fonnutat-ion of VoI.lrmes SI and 111, JSOP, the JM, and t.he 

Program abjectitre Menom&. 

VII. E?sCALGuIW~ 1 

A. Annually, the SecreG of, Defeme will issue tentative Five Psar 

Fiscal Guidrtocs.to -ne the tam financial coastrsints wit’nin 

which the DoD force Btppicture be develaped sad reviewed. ;?le 

fiscal guidance vill be by majar mission and sllpport category r 

each Mi-lltary lkpdment snd Wense Agency. The first fiscal 

guidance will be fssued for cumaent by the JCS, Military, 

5 

87

B. 

c. 

Departments and Defense Agencies, following the issuance of the 

final Strategic Guidance Memorandum. The Secretary of Defense 

w i l l specify in the Fiscal Guidance the nature of the fiscal 

planning constraints, and the aseUaqjiona used in its prepration. 

After revlew of JSOP, Volume XI, JRM>D, and camments on 

the general. fiscal guidance, the Se-targ of Defense will issue 

revised fiscal guidance. The Secretariee of the Military Departments 

will participate in the devel-ent of the revised fiscab 

guidance. In developing the revised fiscal guidance, consideration 

w5ll also be given to the current budget, the FYDP, program 

deferrals, inflationary trends, gross nakionsl product estimates, 

and other economic considerations. 

For planning purposes, the totala of the fiscal guidance for each 

program year and each Military Department/Defense Agency w i l l be 

considered firm. To insure increased flexibility in developing 

balanced programs, reallocationa of funds are permitted between 

major mission and support categories unless speciflcdly stated 

otherwise in the Secretary of Defense Fiscal Guidance Memorandum. 

Fiscal guidance will be used by the JCS in the formulation of the 

JFM and by each Militazy Department and Defense Agency in the 

formlation of their POMs. I , 

Fiscal guidance will normally identify specific major mission and 

support categories. On a selected basis additional program 

aggregations may be identified for separa*e visibility. These 

will be gpecificalljr identified in the Fiscal Guidance Memorandum. 

Representatsve examples of the major mission and slrpport categories 

are: (1) Strategic Offensive and Defensive Forces, (2) 

Land Forces, (3) Tactical Air Forces, (4) R&D, and (5) Training. 

VII. PROGRAM OBJECTIVES 

A. 

B. 

Volume I1 - Analyses and Force Tabulations of the JSOP - will be 

published annually by the JCS with analysis, rationale, force 

tabulations, and program costs and associated manpower reqirements 

as provided by the Services. Volume I1 will present the 

requirements and the recommendations for major forces for the 

mid-range period considered necessary to achieve the military 

objectives in support of the national security objective. It 

will be based an Volume I - Strategy - JSOP, and as may be modi- 

fied by the guidance memorandum on strategic concepts issued by 

the Secretary of Defense. Also, Volume I1 will highlight major 

force issues wnich require decisions during the current year. 

Volume 111 - Free World Forces of the &OP - will be published 

annually by the JCS in the same time-frame as Volume 11. Volume 

I11 will provide advice on military objectives and guidelines 

for Free World Forces required, militarily, for the attainment 

of U.S. national security and military objectives. The analyses 

and reconinendations presented in Volume TI1 will be based on the 

0 

6 

,

7945 7 

Oct 29, 59 

, 

strategic apprai8d.s and're&oa&. concepts in Volume I and the 

Strategic Guirkprce Menrorandhmn, and 8 ~ deeigned e to provide the 

basis for a U. S. position oli m3Jatzu-y assistance. 

C. In addition to Volume 11, the Joint Chiefs of Staff will develop 

and submit anmdly to the Secretary of Defense the Joint Force 

Memorantturn. The JEM vill present the recumended force levels 

and support prograne, sfmilar in format to Volume 11, all 

developed within the parametera of the fiscal guidance issued 

by the Secretary of Defense. The JEM w i l l include program costs 

and associated mqCTpd3er rewrements as pro&ded by the MUtary 

Services. The JEbl should be analyzed in accordance with reference 

. (e) prior to sutmiaiou., A summary win be included of analyses 

and assessment of rZsks gisaociated with the forces aa measured . 

against the strategy and military objectives in Volume I and the 

Strategic Guidance Menorandun. Also, the JPM Kill highlight major 

force issues which reqyire decisions during the current year. It 

will compare costa of the recommended forces and the support 

programs with the approved MDP program baseline as stated in 

the annual Progran/'plAaet Review Schedule. The JEM should be 

considered by the Military Departments and Defense Mencies to 

assiat in the preparation of their PW. 

B. 

E. 

The Joint Chiefs of Staff wlll develop and Wmlt annuBLLy the 

Joint Research and Develqmeut Objectives I)ocument (JRDOD) to 

the Secretary of Defense. The JRDOD will provide R&D objectives 

responsive to the strategy and force recamendations in the JSOP 

8s well as long-range and technological. objectives for. capabilities 

expected to be needed in the 10-20 year period. Indicators 

of relative military importance and appropriate rationale will be 

included to assist in developing the DoD R&D program and in the 

preparation of Developnent Concept Papers (Dcps ) . 

Annually, each Military Department and Defense Ager-cy Will prepare 

and submit to the Secretary of Defense a Program Objective Memorandum 

(POM). WMS will be based on the Strategic Guidance as 

stated in the JSOP, Volume I, ag*modified by Secretary of Defense 

Strategic Guidance Memorandum. POMS will express total program 

requirements and shoula be analyzed and evaluated where applicable 

in accordance with IbDI 7041.3 (reference (e)). POMs must 

provide force, manparer cost and ,materiel recommendations, and 

rationale for propqsed changes from the approved FYDP base and 

the JIM, and the risk amessment and military advantages to be 

gained. .Costs will be programming costs within the scope of 

fiscal guidance issued by the Secretary of Defense. Supporting 

infoxmation for PCB@ will be in program element terns except 

7

that procurement for other than major weapons systems may be 

provided in form of procurement listings. 

F. PclMs may be revised after submimion when the originator believes 

that such a revision w i l l result in a better balanced program. 

Recommended FCM changes should be made only when the change rimy 

be completely processed to pexmit analysis. with the originally 

submitted PaM, that is, in sdvance of a Secretary of Defense 

decision on a POM. POM revlsiona will include 821 identification 

of equal cost trade-offs within annual Military Department/ 

Defense Agency totals to preclude increases to the fiscal constraints. 

pcplrl revisions will identify equal or greater effectiveness 

in addition to cost trade-offs. 

G. Wherr changes cannot be processed in time to be included in a 

Secretary of Defense Program Decision Menoraedum for a specific 

program, mch change8 wlll be proceased to, the Secretary of Defense 

using a PCR provided the change will increase m ilitaw 

readiness significantly and iS considered of such 811 urgent 

nature to require Secretary of Defense review out of cycle, or 

involve inter-Service functional transfers' which create manpower 

authorization increases to end-year strengths. (See paragraph 

XII.B.2. ) 

H. The Secretary of Defense wiU. direct au SMUal staff review of 

Volumes I1 and III, JSOP, JRDOD, the JIM, and ms. 

Based on 

the review,. the Secretary will issue appropriate Program Decision 

Memoranda. 

IX. 

I. The specific PIN issue dates will be announced by the Secretary of 

Defense in the revised annual. Brogmm/Budget Review Schedule memorandum. 

Each PPI and IXP will be sucpported by a "resource annex'' 

which will provide a translation of resources to program elements 

in&e FYDP. Decisions w i U be transmitted to the JCS, Military 

Departments and Defense Agencies as appropriate for analysis, the 

submission of comments, and upda,ting of the FYDP. 

COMPONENT COMMENTS 

A. Within two weeks after receipt of each Program Decision Memorandum, 

the JCS, Military Departments and Defense Agencies, as appropriate, 

will submit comenta to the Secretary of Defense. Comments should 

be basically narrative and Kill address each issue to insure that 

the views of the Jcs', Senrlce Secretaries, and Defense Agency 

Directors, are represented. 

B. 

Comments may be prepared in a manner prescribed by the submitting 

activity, but will present the extent of program impact that may 

be expected as a result of the decision. If a dissenting View is 

expressed, any additional or dairying infonnation or justification 

not stated in the POM should accompany the statement to dl0 

a re-evaluation of the issue. 

a

-- 

C. Caanents mhitted by the JCS will address the total DoD program 

balance 8s weighed againat the Joint Force Memorandum. JCS would 

be expected to advise the Secretaxy of Defense with an assessment 

of the rim involved, snd inherent in the tentatively approved 

program aadprovlde 811 evaluation of any strategic implications 

resulting f’roa the program if adopted. 

X. 

De 

The Secretary of Defense will direct a staff d e w of e U comments. 

Fmgraxn Decision Memrands will be modified by reissue 

of page changes to the original. mM to lacorprate any new 

decision. 

A. Secretary of Defense decision documents will provide the basis 

for the updating of the Fyolp data flle by the Military Depa.rhents 

and Defense Agencies. Military martmeats and Defense Agencies 

Will apply the approved forces, marrpOwer and cost data to the 

FDP data file, 88 stated by the decisioa, by program element. 

Decisions w i U be applied to -e FyDip data base as outlined by 

paragraph VI .B of DoD Instruction 7045.8 (reference (g) ) even 

tbDugfa their comment to the Secretary of Defense may express a 

dissenting position. 

B. ’ On an “as required“ basis, the ASD(C) will issue a PCD which will 

direct FYDP mtes to be submitted. PCD will include any specid 

update and grogram structure dmges necessary for the specific 

update. Military Deparhnents and Defense Agencies will maintain 

their FYDP data files BS prescr2bed by DoDI 7045.8 (reference (g j 1 

to insure a rapid response to a specific update request. 

XI. 

BucGfi ESTIMATES 

A. Annually, each Military Department and Defense Agency Will submit 

its budget estimate +o the Secretary of Defense in accordance 

with reference (c), DODI 7110.1 and 7110.1-M. These budget 

’ 

estimates will include the budget year and the two prior fiscal 

years in accordance with currently established procedures. 

Budget estimates will be submitted based on the approved program 

resulting from incorporating the effects of al3. decision documents 

received through a predetezinined date to be announced bjr 

the annual Pmgram/Budget Review Schedule memorandum. Specific 

detailed instructions for the sbission of budget estimates will 

be separately prescribed for each year. 

L 

B. The Secretaxy of Defense w3.U direct a staff review of the budget 

estimates received from the Military Departments and Defense 

Agencies. Based on the review and analysis of budgets, t’no 

Secretary of Defense w i publish ~ a series of ProgrAm/Buaet 

Decisions. Budget decisions wiU atidress specific budgetary 

9 

-

issues and be related to the appmpriations and budget activity 

structure of the Department of Defense. PBDs will include the 

budget year and prior years as appropriate. The decision record 

of the PBD w i l l also include an estimate of the impact of the 

PED on the next program year. 

C:. PBDs, including the decision record, will be transmitted to the 

Military Depsrtments and Defense Agencies for insertion of the 

PBD and decision record into the FYRP. Reclam statements may 

be submitted to the Secretary of Defense but should be submitted 

only if the impact is masidered to be Mciently serious to 

warrant the personal reconsideration by the Secretary of Defense. 

Budgetary reclama statements must be concise, ccanplete, .and based 

.on new facts or justification not previously submitted in order 

to pro.xi.de a basis for a re-evaluation of the decision. The 

Secretary of Defense will direct a stsff review of 8ll budgetary 

reclama statements and will issue a specific decision for each 

reclama. 

D. In addition to the submission of reclam8 statements, Selvlce 

Secretuies will identify major budget issues to the Secretary of 

Defense mer carpletion of their review of the PBDs. Issues 

must be of sufPicient priority in the opinion of a Service Secretary 

to warrant a personal Secretary of Defense and Service 

Secretary discussion. A Major Budget Issue meeting w i l l be 

scheduled and announced in the Secretary of Defense Program/ 

Budget Revi,ew Schedule menorandum.. Deci8ions of the Secretary 

of Defense resulting from this meeting will be addressed in 

revisions to prevfously issued PBDs. 

XIT. 

AP?ROVED PROGRAM CHANGES 

A. The receipt of a PIN, DCP, PCD, FBD, DD Form 1415, or Secretary 

af Defense memorandum reflecting the decision of the Secret= of 

GE?ense will constitute a new approved program base den entered 

into the FYDP by the Military Departments and Defense Agencies. 

Chenges to the approved base for the budget and program years 

will be made only by subsequent PIMs, POs, DCFs, or PBDs, or by 

Military Departments or Defense Agencies within the established 

thresholds of this Instruction. Dcps w i l l be entered into the 

FYDP and data reviewed and approved by DDW. Data @awes will 

be announced by DDM using PCDs or addressed in the R&D PIM. 

B. Subsequent to the receipt of a PIM and prior to the nkt Military 

Dczpartment or Defense Agency POM mbmtssiou date, Secretaries of 

t'ne Military Departments arid Mrectors of Defense Agencies w i l l 

be permitted to make changes to the FY7.F without prior approval 

by the Secretary of Defense when such changes a m confined within 

the following thresholds, and as M e r qualified by subparagraph 

C , below: 

10

1. 

Forces 

Current Year - Only thoae changes witfiin the approved TQA 

subject to the limitations Imposed by DoDI 7250.10 (reference 

(k) 1 

Budget and Progr am Years - Any force change within or among 

elements within available inventory not requiring additional 

TOA or manpower. Forces w ill be identified as chose forces 

approved by the current Secretary of Defense Program Decision 

Memorandum. 

2. 

Manpower 

3. 

Current Year - Only those changes within the total manpower 

end-year strengths. Xncludes the tranefer of both military 

and civilian authorizations and drill pay anzone: elements. 

Budget and Program Years - Qnlythose changes where the net 

effect will not increase the total military or civilian endyear 

strength. w e s which are the result of inter- 

Service agreements for functional -es and authorizing 

manpower in excess of 100 militsry or IO0 citjifians for a 

gaining Mllitary Department, or 25 military or 25 civilians 

for a gaining Defense Agency, GSD or JCS, will not be 

8cccrmpUshed until a confirmation PCR has been submitted by 

the gaining activity, and the transfer is approved. 

- Costs 

Current Year - Any change within the approved TOA subject to 

the limitations Fnrposed by DoDI 7250.10 reprogramming actions. 

Budget Year - Buring the period July through December changes 

may be made within the approved TOA by cost category unless 

such authority has been negated in the annual budget estimate 

submission instructions or by separate memarandurn. During 

the period January through June, no changes Ku1 be made 

since the President's Budget I&U. lave been established and 

submitted. 

Program Year - Except as outlinedby specific R&D decision 

documents or negated by other OSD authority, changes may be 

made within the approved TOA by appropriation. 

.I , 

C. FYDP changes for the budget and program years which are accomplished 

by the Secretaries of the Military Departments a1.d MrectGrs of 

Defense Agencies are pezrmitted without eqdanatian only when suet 

changes for a program element remains below a cumulative tot?il for 

a single fiscal year of ten mwion dollars or, in the case' sf

manpower, below 300 military or civilfan authorizations. Milit- 

Departments and Defense Agencies are required to suhmit a memorandum 

to OASD(C) to a.cccmpaW the FYDP update in which the change 

is recorded explaining the chsrrges which have exceeded the cumulative 

TOA or mallpwer change threehalds since #e last explanatory 

memorandum. 

b A p P d of programs wiU not constitute authority to either c d t 

:o* obli~@te fllpds. 

14 

XTV, 

F"€&IlDBWK 

6, 

t .2 

The E2DP ha[ldbook authorized by this Instruction will be revised 

quarterly and revisians distributed by ASII(C). The handbook is the 

official lipresentatfon of the DoD Program Structure and wfll contain ' '\* 

approved codes and titles uaed in qdating the FYI@ data file. 

m &FFEmvE DATe 

.' -+ 

L 

', m. m ~ m m 

This Instmcctim fs effective 3mw 1, 1970. Three capies of each 

alitary lleyar+%etz%'s aud Defense Agency's implementing documents will 

be forwarded t0 MD(C) within ninety WE after the esective date. 

I . 

EncZoSures - 3 . 

{ 

? . j, ,I. ?reparation and' Processing of Program 

\ v*,- Objective Memorandum {Pa) 

.'. 

* 

;-;2. 

, .!:, ?regaration and Processing of Program 

.!.. /! .' ,' 

Change Request (PCR) 

8 .,. 

!.::3. Preparation and Use of Program ,Change 

Decision (PCD) and Progrq/Budget 

Decision (PBI)) 

* r:. 

AS&3tant Secret= of Defense 

(CcmptmUer) 

9Y 

. '.

2. POMS w i l l be subeitted in tight copier to the Mrsctor for 

program end Fl~acial Control, OfYlct of the Asdatant Secretary 

of Deienae (~~mlba). 

7045.7 (Encl 1) 

Oct 29, ss 

B. Processing 

process. Militaq Depxrtmnte and Defense Agencies should 

initiate the needed dlscipliDe in implenwrting procedures to 

insure on-time processing. 

1. ' WMs will be forvarded to the' Assistant Secretaxy of befense 

(Comptroller) for the furtiher processing within bsD for staff 

review and the establishment of contml recorda. Prhsry Action 

Offices (PAOS) and Collated Action Offices (Me) will be 

determined by the Office of the Assistant Secretary of Defense 

(Comptroller) to include Defence Agencies when a. direct intertet 

is applrent, 1.e. Intelligence, Commicatiorre. 

2. Once a POM has been forwarded to thc Secretary of Defense for 

decision, the program is considered "locked," that is, no 

changes should be nrpde pendlng the outcome ofthe decision by 

the Becretary of Defenae, If, however, a Secretary of a Milltary 

Department or Mrector of a Defense Agency has reaaon to chsnge 

the POM, it is permitted under the following conditions: 

a. Change muat be scc~shed 

by the submission of. gage 

9 changes to the original WM or added inserts 8s appropriate. 

b, Change nut identw an equal monetary and effectiveness 

tredeoPf to be reappved fxprn the origfnsb POM, in order to 

stay within *he fiscal coostrsints on which the 0-W 

FOM wB8 besed. 

c. Change must be initiated timely enough to allow a decision 

to be =de in concert wit& the total ~rog~an. C b w is 

not acceptable if a Secretary of Defense decision is 

imminent or has been issued. 

3. hcisions on the FOMB and the JI3f w i l l be processed in the form 

of mlMs consistent with the titles of the. nrrjor mission and 

sapport categories and speciss sggreegtions iden'cifisd uithin 

the Secretary of Defenae Fiscal Guidance bemor8ndum. For 

example, all Military Tkpartmnts my respond to the Strategic 

Forces aggregation, huuever, oaly a single Secretary of Defense 

PIM will be issued for the total Stzategic aggregBtibn. 

C. Specific Infomation 

1. POMs should consider the differences between %be Joint Forces 

&morsndun Issued by the JCS arid the 'pmgfam being submitted. 

\ 

2. 

' 

! 

PO& will include a total s-ry of the econondc an~~lyairi and 

assessment of the costs which -Vide an m83yBis and 

results, including an assessmbnt ofthe rlab associated with 

the proposed mjor mission and"suppoe ~mgrarns and the military 

advsnthges to be gained as megsuredveQinst the jpM. 

2 

4L

3. POMs must be prepared within the parameters ofthe stated 

Secretary of Defense Fiscal Guidance. 

4. FoMs will normally be prepared within the bundries prescribed 

by the planning data prodded by both the JSOP - Volume II and 

the JFM. 

5. Individual summaries should be provided by MsJsr Mission and 

Support Categories and specisl aggregations aa measured against 

the currently approved progrsrn. 

6. POW will include both direct and indirect costs in the najcr 

mission and support category to which the costs are Elatable. 

Related support costs reflected in a major mission category 

bill not again be included in a support category. 

7. Cost models are encouraged where they w i l l assist in meeting 

POM schedules. 

8. Total summary (See Item Two above) should ala0 include an 

identification of major isauea which in the opinion of the 

submitting activity are Equired to be resolved during the 

year of SUbdSSiOn. A comperiaon between the identified major 

issues and the mjor issues in the Joint Forces.Memrandum 

should be discussed when differences are involved. 

9. Supporting'detail for POMs will be prepared in program element 

term except that prccurement programs, other than major 

weapon systems, may be expressed by use of procurement listings, 

which will be submitted by mJor mission and support category. 

10. POM backup information should be provided by we of existing 

documentation to preclude excessive administrative workload. 

I 

'- 

3

A. Gpnersl 

3 

1' H3Ra are to be submitted in accordance with the criteria 

established by paragraph VIIZ.0. of this Instruction. 

2, 'Sections or specific block8 of the form that do not apply should 

be indicated as ''not applicable . It 

3. PCRs may be originated by and submitted to the Secretary of 

Defense over the sigrnsture of the Secretary of a l&lltary Departpnt, 

Chairman of the Joint Chiefs of Staff', Director of the 

Defense Research and Engineering, Assistant Secretaries of 

Defense, Assistants to the Secretary of Defense and the Directors 

of Defense Agencies. 

4. Secretaries of the Military Departments or the mctor of 8 

Defense Agency my delegate authority to sign pmposals, not 

considered mJor iseues, to his Aeeistant Secretary for Financial 

Management or,Defenee Agency ComptroUer, or 810 official at a 

comparable'level of authority within a Defense Agency. 

5. FCRs will be tlrrnsmitted in thirty copies to the Director for 

Program ard Financial Control, Office of the Aesistant Secretary 

of Defense (ComptroUer) . 

6. An economic analpia which includea all information relevant 

to the evaluation of the pmpoaal and documentation of the 

decision including International, Balance of Payments impct 

(See Refenmce (a)) w i l l be included on the forms submitted. 

When such infomtion a8 procurement obJectives and procurentent 

acceptance or "cost to complete" is considered necessary to 

the evaluation of the proposal, continuation sheets should be 

Lised to expand any section, as needed. 

7. ECRs will be prepered to confirm Secretary of Defense decisions 

expressed by other than recognized.decisio.1 documents when the 

decision is in insoificient detail to allow FlDP update action. 

For the purpose of this Instruction recognized decision documents 

are: Program Decision Memoranda expressbg a Secretary 

of Defense decision in program elelnent tern bj Iceans of a 

1s resource annex, It Development Concept Papers (E?s), accompanied 

by a "resource annex: Program change Decisions RDS), Progrsm 

Budget Decisions (PBDs), ReprogrSnming Actiane t DD Forms 1415), 

and Secretary of Defense Merpsrsnda expressing a decision in 

gufficient detail to allow Pypp update actiaa,

6. 

9. 

u. 

PCRs will be prepared using pmgxw&ng 

resomes identuied to both direct and 

the purpose of thle Imtmctiou. direct 

costs aud will include 

indim elementa, For 

elements m those which 

cont&-resources directly af'f&ted byA'the progosal belag made 

whereas indirect elements are thase which change becauae of a 

change made to a direct elenrent, e.g. be8e operations, tlsining, 

comnd, housing and ehmntd in Pragmam 7, 8 and 9 when the 

direct element is a force elemsat. 

The RR summazy sheeta WU summrize the tatal lmpUc8t%on af 

the change. When more than one pr0gm.m elemnt is Inm3.d in 

a proposal, supporting formete for forces, nanpcm?ef and costa 

as applicable, are to be appeaded for each element included in 

the proposal. 

PeRs must include all factors or iderrtifp stapdafd factors used 

in the --ion of the R3R. Thoee submitted withoat adequate 

explanation of data and facfore used for justification my be 

returned for resubmission, 

3. Proceesinq : 

1. ERs w i l l be forwarded to tke Assl8t~nt Secretary of Defenee 

. (Con der) for the aesigamerrt of a Prinary Actlbu 0- 

(PA0 p" , the CoUteral Action Ofitlce(s) (CAO) and the eaUsbmsnt 

of control records. 

2. 

PCRa meeting the criteria of thla Instnrction nay be submitted 

to the Sec~tary of Defeme for decl6ion at any time subeeptrent 

to the receipt of a PIM and prior to the date of the aubrdtting . 

activfties' POM. If the eubmitting activity is not required to 

submit a POM, the PCR ehould be processed timely enough to be 

decided in ai-8 of the annual submis8;toa of the DoD b-t 

estimates. 

3. Specific dates will be assigned to both .PAOs and CAOs by which 

action on a PC'R must be eampleted. It is the reepnsibility of 

the CAO to insure t- Input of comments to the assigned PA0 

and the responsibility of the PA0 to insure that the required 

dste for the preparation and submission of the =I) Is met. 

4. 

The 13D Fonns l5m aeries will be used to orgmize a PCR for 

eubmisslon to 08D unless computer products 81.e available and 

data meets or exceeds that requid.by the DD Forms lm. 

C. Specific Infomation 

1. sumnrsry Form - ID Form 1p 

a. PCR Number - Enter appropr&te number. Chaage numbers are 

assigned by the submitting Military Department or Defense' 

Agency in consecdive sequence starting wL*h one each 

2 

1

, '2rogra~ Elemnt Etle - Enter the specific progrsm e3.ema.f; 

title 5s preacribd In Chapter I1 of DcD 7045.7-a. Wcea en 

aggEgatioi icv0.1.ving -re then one progmm element is 

invoLved, UE~ the mat descriptive aggregatioc. of the grognm 

structtme that w i l l ideutif'y the pmposal being submitted 

(e .E.. Offensive F9rcea - Mis;ile Units). 

c. As Of &to - Enter the Gate af the apecific mi?update used 

a8 the c mnt 6pdr9ved progrsrm on which gropoaal is based, 

f. Sumaaq - PrOeds brle2 rstiade f9r the cbange, assessmcnt 

zm risk and expleln ttre benefits to'b deri7-d and 

militalp adantages to be g;Fsit&d in the went cf propcsal 

spproual. Stata the elllergency of the proposal which requires 

it8 solution during the camen% cycle or explsia the absence 

of the Propocal flcoiii the XM, as Spp~Wprkte. Xlaborate 

on the alternatfvea bia COIXS~~~X&. Obtain sipat.ir? as 

Indiceted by A.3. above. ApFf- date. 

3. 

Surrwry (Page 22 - Insert as may 8.xlO+ sheets 6s needed to 

iaaw e coxplete &scription of the pmpsal a d it5 

just.if!.catiot. Wrk tach sdditfoaal sbeet with the s9me 

RR nmber applied to p~gs 1 of the surnrary fom. inserts 

need not be used when ~1 1 Q? the e~~~mmry form contains 

aufficseat ieosskion a* iaclcdes: (I) the impct the 

propal will have on tte International &lance of Payzents 

(IBP) and (2) tke imgac+, on the foreign nationel empby- . 

mnt or 9. 6.. ndJ.itar). and cioillsn atrengtlx In foreign 

courrtr5e3. Wten aa IBP i-cspoct ic reportee, it should ' 

indicate the est.ieated amon+, by fl~cal year In accordgncs 

J '

7045.7 (Fkcl 2) 

Ost 29, 59 

with D3D Iriatrr;ctias 706G.2 (Peference (a)) sad shoul3 

differentjste etvecn force changes and msrrpcjer &ages. 

Khec mapower ntrerigchs, mJor pmcurements 02 military cocstructicn 

in fo?etg~ count.ries are involved, the changes 

ehculd be identrs'ied to bsth countries involved and fiscal 

year. 

a. 

b. 

C. 

PCR Number - Enter sane number as applied to pge 1, sumarrry 

fom ~JD Fom 1570. i n 

-. 

Forcea - Sgecific fmce detail should be identified by pmgram 

e,emnt citbez- on page 1 of the sumrpery cr as an 

sttrzch~~nt to pge 1 sumrery form DD Form 1vO. Tiie foxts 

apaied to page 3 am the net change diffe-rkncee mly and 

are not xqt?ir?d to be program element oriented. 

- 

MA - Enter ody the net ch6age the proposal wilb c8we from 

the curreatly appnved program. Indicate e2propriate appn;- 

priatlons Seing changed. Do nat include the iiqac% on 

Retired Pay/Homeawnero Assl~tance/Militazy FaxLly Eouslag/ 

MAP/ or SpecM Poreigr Clemency urrless the PGR specif1zall.y 

acidpesses a chaw tc ihees apprcprietloqs. 

1 

Research an4 Ikvelopmxt Costs - Entei- nst changes 

efromthe curreat EzppmPed pmpm for bo-bh the 

and Military ConstrccfAon agpropzd6tions. Show t*J . 

Research and Develomnt cost change. 

Investment Coats - Enter net chaw8 to Millt&ry Construction 

as cLwntly -rp.ovi&d by the Militeq Swvicea 

?reject Listine or eqAvalent for Defense Agencies. 

Specific program element detail %Ill be provieed as 

backu2 to the Si. Ertter net changes ta Procureaent 

appmpriations . Ypec.Lflc "Gins Item" detail such as 

presently provit5eJ by the pmc;lre.2ent listing, i.e, 

c%t, quantity, and &@Is of iaeue infomatian, w i l l 

be provided as support to the FOR. When indirect 

pmctrement costs ere :nclu&d (not manpder-detsmimi) 

DD Fam l'j7C-2 ah0-aI.d te use3 ad labeled "ir;dfR&i. 'I 

Apprcpriate ratio%&% should be pmvibd to hdicste 

derivation of coetr regorted. Siow t.3hl Investment cad 

cbnge. 

dlitary gay fa&r which w'ill & pzrldicaUy qciated 

and publiaaed by OED. Include O W aet clanges v3icii 

will ba a crxt&Ination c? Mh the diEct and indirect., 

wnether manpow42 .bterained or uiihemise. DD Form 1m-4 

will be wed to Identify OW costs ?:ha^, ace tctally 

4

- Eater totah. 

d. Warner - Enter onlythe net c-e difference froa che 

approved prom. Iadicate by mil2tary ofF-cers and eriltst-. 

ed authorhation6 and shm civilians by IJ. S. DLmc% Hire, 

Foreign Dimct IS%= and Foreign fiuiiArect Hire. Sam Total 

Mflltary an2 T e a Ci-d.J.iait changes. 

3. Cost Detal1 - DD Forn 1570-2 

8. 

b.. 

ER Tuber - Enter earn nl;;nkr as applied to paee 3. SUIIMSIY 

fmm RE Form 1570. 

As Of ate - Enter %he date of the spxific TYCP u*te used 

83 the current 8ppro.red program cn %h:Lch the propcsel ie 

-sed. 

. C. 

tions kndbauk." DD ??ow 1570-2 is'4esiged to provide bta 

for two element codas. Kien an elensnt codt has not be%n 

assigned indicate "new" In this block. 

d. 

e. 

f. 

g= 

h. 

&proved Costs - Enter the Totel Obligational Authority 

reflected in thc Flve Year De2ense 3ogrsm identsxied by 

the annual ~rogran/3ui3gs~; Review Sciietiule as mdificd by 

scbsequent Secre-cam of Defense decisions. See 3.5. above. 

Change Costs - Enter the net change iiffemnce to costs 

between the aspxvetl progran and t'Je anom% being yrogoee8. 

Total Change - En-kr ths total far all years. 

Proc;lremer?t C& - When indirect prc;curemn% cast5 are 

being reported, that are not t o w mn-r-determined, 

this form should be used and law3.ed "indirect" accompanied 

with appropriate ;=*icjnale to indi,cate dcrivation 9f cost 

data. 

-- 

Operations and Me-iate-mace Cost€ - DE Fomi 1570-2 does not 

=quire the inclusion nf the Milltaly. Fay mpFiBti3n. 

Use tha DD Borm 1570-2 foz both the direct atid Indirect progrem 

elements resp2t?.vely. For iiiOiEct coats that are uot 

totaLy msnpower-determined, this form r ; U he IsSeied 

"indirect'I 

aad accom&mniad with appropria-be mtiiomle to 

iiidicate derivation of cost &ta. 

5

GLOSSARY r 

. . 

"Glossary of Acqui*sitictn Mcnagement Acronyms and Terms" , the Defense 

Systems Management' Col I %e, lfulp t 980. >. - 

2, U.S. General Accounting 9pevaiions Maniral. ii70.2 (Ah: ,' 

'Infomation Recruests arrd #a Enforcement of Access to -- 

I. "Government Chtract Frincipl-ts" Office of the-enera1 ~ounsal 

GAO, November 1980, 

, . 

2. Armed Services Procurrvnznt Regulations #l-406 "Contm3 

Admini stration Functions". 

MASAD S W R Y REPORTS: . 

1. ''Digests of Major Weapcn System Reports Issued January and February 

1979" PSAD-79-64, Apri 1 25, 7979. 

2. 'issues Identified in 21 &ently Published Major Ueapor, ?Systan 

Reports" PSAD-80-43, June 12 1980. 

* - 

-3. "Acquiring We

. mnpuier Detail - CD Form 1510-3 

- 

a. FCE lumhe:.- - Xnter same number 88 assigned to 

form UD Form lm. 

1 s u~ry 

b. As Of kte - Enter the at.?of the specific FYDP iipdete used 

a8 the current agpred pgrarn OQ which the propoacl is 

based. 

c. Proppxu Element Code - Assign appropriate pr-m Omnt 

code as prescribed by IkD Instruction 7045.74, 'tdes en4 

lkflnitions Xandbook." I1D Form 1570-3 is designed t.0 piavide 

data for two elemtat codee. When 811 eieme& code 'has rut 

been assised indicate "neu" la this 'slack. 

d. Approved M8npcwer - Enter the end year etren$h for *.he 

element code be- reported 88 eted in the Five Pear Defense 

Program identified the 8nna mdBuQ=t %viw %iefiule 

as aadifled by oubseauent 8ec.retaz-y oZ Ikfense decisions. 

See paragraph 4.b. ekove. 

e. Ctanged Manpower - EEter the net cbslnge diffel.ence to end 

year streagths "&ween the curreutly approved program aad 

the proposal, 

i. i&nyear Data - ??hie form does ncrt reqqre manyeis infollcltibn, 

however, If mszyears are used in the cost c&lml&tii:n, t hq 

. should be appro-priately ldentiiled. 

5. Cost 13etai.l (Inairect) - DD Form 1570-4 

a. H;R Nuber - Enter s~me au&er as assigned to =e 

fora M) Form 1570. 

1 surm;ary 

b. As Of Date - Enter the date of t'ae specific ITDP update used 

a8 the CurreRt 8?proved prom an which the pxpossl is heed. 

c. Elmeni; Codes - Enter the spproprlz3e pmgzam elemect cdes 

aa pmscribed ky DoD Instruction 7045.7-3, 'bdec md Defl.&.- 

tIOta BnQcl.book." ID FOm 1570-4 IS &Elad. tJ provide 

hdirect cost data for fI&?n program &,?menta. '&en 6-11 

elelaent code h8t1 not been assip&, ep.ter the word "new" in 

this b&ck.

. . 

. 

! 

FORM 

s D- 

~ 

I OCT 1570 

PAGP OF PAGES 

-- 

. ;A-

I 

I I I 

.

I n-a--- 

i 

W l 

i 

J 

. c.

. . 

7315.7, Oct 29: 

(Att j to E.ncl .1)

1. 

m r n CWe Decisions (Em) w i n be used to announce certain 

progrern decisions of the saCm&ary of Defense. ProgreM/Budget 

lkcisiona (PBDs) rill b wed to announce all budget decisions 

incident to the annuel review of the fornal bud@& submission to 

the Secretary of Defonae. 

2. 

3. 

4. 

The fcDs are fom&ted in a nmmr to make them conptable with 

the =Re thereby ellorlag the re5pmaes to be in the same terms 

as the submiseiona. 

FCDS will be used to announce Secretary of kfense decisions in 

addition to responding to Pea, barever, they will not be used 

to confirm decieions mnde by Fro Decision Memoranda (PcMs), 

bevelopment Concept -per8 (EPs&"" 

or reprogrmmlng action? 

which are decisions in their owa form. 

Zn order to provide a clear understanding ot each decision 

announced by a EDF It ie neceasarjr that the forilst contaiu, ai; 

a minimum, the following. infonnatbm in precioe and explicit terms. 

B. Specific Entries 

1. Supnmary Form (Page 1) - SD Form 428 

a. 

b. 

C. 

d. 

PCR Number - Enter the same number assigned by the iniciating 

actiVi7;y of the PCR. When the FeD is being originated 'cy 

OSD without benefit of PCR input, tbe letter Z proceeding 

the year w i l l be assigned (e.a. 2-9-4301). 

Impleuu?nting Component - Enter the name of the Military Spr' - 

ment or Defense Agency designated to implement the decision. 

When imgLementation involves mre than an Agency or Dep-rtmen' 

indicate by inserting the word "All" or "See Below7" and 

specify in the body of the decision those Militaq DE~w-t.ments 

or Defense Agencies that w i l l be required to impLenrent tne 

decision. 

Program Element Code - Enter the specific program element 

code as assigned by Dol) Instruction 7045.7-H, "Codes and Defiiiitions 

Handbook." When more than one element is involved, 

insert the word "various" and identify each program element 

in the body of the decision. 

Guidance - Enter the originatiar of the PCD by inserting zht, 

office origin of the proposed decision (e.g. Assistant*

Secretary of Ikfec3e (Systcms Amlysis), Assistant 3ecretgz-y 

02 Defense (Ccmpzrouer), Assis

, 

7945.7 (Encl 3) 

oct 29, 59 

(2) Minor adjustments to the structure within the limitations 

of the criteria established by this Instruction, or 

(3) Changes to the operating budgets of industrial funds, or 

(4) Corrections of errprs,. O$,"fact of life" changes, or 

(5) Adjuetents involving production acceptance schedules 

as approved by Assistant Secretary of Defense (hstallatlons 

and Logistlca), andl'minor procuremnt changes or 

attrition changes. 

C. Program/Budget Decision (PBD) - SI) Porn 428-1 and 428-1~ 

1.. General - The data applied to the PED, SD Form 428-1 and the 

continu&ion sheet 428-1c is varfeble, and will not norlnally be 

confined to a specific pattern. As frequently as possible, the 

decision will be expressed by we of a single page docwnt 

SD F o 428-1. ~ 

2. Specific Entries - Enter data in accordance with detailed instructions 

prescribed by DoD Instruction 7110.1 (Reference (c)). 

3. 

Attachments - When an out-year impsct, (first year beyond the 

budget year) Is apparent, the "decision record" which accompanies 

the PBD will expreq fhe impact of the WD in program element 

terms. 

Attacl.naents - 6 

SD Forms 428, kB-1, &8-1~, 

k8-3, k8-4, k8-5, aad 

k0-6 

3

~ ~- 

7-- -i 

I 

I 

I 

- 

RECZAPC)r b DEV 

i 

RD? b E 

11‘ L I l’ A R I 

I I I 

E

:.y?-.&a 

.-1. 

I 

I 

. m -7 

. c.- .*.:.:.>:.; .... ... y-.,.: 

... 

t . f, -i 

IPY 

i?V VY Ir: I 

. . . . . . . . . . . . . 

=A w E m OU~*YOI -- 

ROT b 

* }MOL COW 

t PROC 

I I I I I ! 

I 1 I 1 I 

I . 

W 

0 

3 

i

. .. 

..

I 

I 

i

E- kquisidon Iqrovenxnt Frogtan (Carlucci Idtiatives 1 

2, 1981, the new .=d~ninistratioa launched its efforts t:, 

impxme tikm acquisition process. On that date ??r& C. Carlucci, 

of Defense, issued a memorandum fo&g 

a St2ering 

Gmqp @eo @de a sweeping review of the acquisition process. The 

&. iua3Eci issued his 31 initiatives (the 32nd r.rgzrcting coxpatition 

GW, 

se~~ral occasio~~~., has testified that we feel the Carltrcci 

I%tdsWZxes zm~ 

and timely efforts to improve the zcquisition

UNDER SECXETARIES OF 3Er"Z:NSE 

ASSISTANT SECFZYARIES OF DEFENSE 

GENErWL COUUSEL 

ASSISTAZTS TO THE SECEETAXY OF DEFESSE 

SUBJECT: 

Imprcviag the Acquisition Process 

e 

On 2 March 1981, I directed a 30-day assessment of 

the Defense acquisiticn system with the ;?ziority objsctiaes 

of reducing cast, making the acquisition process =or2 .&ficent, 

increar,ir,g the stability of programs, and decreasing 

rh.2 acquisition the or' :nilitam; harciware. The rsprt, 

dciivered to me 02 31 Xarch 1981, prcvided mr.y saecific 

recommenlztions s-d posed a number of xafor issues fgr 

&cis ion. 

1 hme Slse~esc=! the ragcrt with the Steerha Grocp, 

the Jdint Chi?fs of Staff, tne Service Secretaries, and 

the UnZer Secretaries and selezted assistant Secretzries of 

Defznsa. Sssed an the report and those neetiaas, the 

s - 

Secretary and I have decided to make major chilw e Wqn&. .Lh ic 

the acsuisition chllosorhv and the acquisitioc process 

k-tself. We are ccnvixec +hat we kt-p now a hlscoric - end 

-e oiwortnnity - to sigaiii=ar.tly improve ths Der'ense 

acquisition system. Xe ask for your - cooperacion - and assistante 

in carrying cut these decisions. 

The acquisition dacisions are 

attachects to this memorandum. I 

here the major decisions and their 

&&e followirq paragraphs. 

reccrded in detail in the 

would like to highlight 

iqlizaticns fcr SOD in 

. 

DoD Acqu.isition l.lrnagement Thilgsophy 

The DoD manageyen2 philosophy that I ZescriSed in 

my 27 March i981 PCBS decision memorandm also ap?lies ta 

the acqnisiticn policy and process. '2hrocr;h cotltrolled. 

decsntralitation, subordinate line execufivcrs will Se k12 

accountable r'or the axecution or' policy decisions and ?rogra,r,s 

as approved. The review of the accuisition process is e ?cod 

example G Z participative management where the Ser-rlces ai!? 

other DGD staffs, working toqether, have jointl; aigr5e.d. or: 

7

f &firm tbe 

acquisition management principles: 

1. We amst improve long-rmge ?hriiing to rnhzncc 

acquisition program stability. 

2- Bath SI2 and the Services nust delegate more 

respponsi=sility, authority and accxntabiliky far programs; 

in particular, the Senice program manager should have the 

respnsihility, autbrity and resources adeqdate to execute 

efficiently tbe program for which he is respcnsible. 

3. We nust exdne evolu+ionary.alrernatives which 

use a lower risk approach to technolog than solutions at 

the frontier of tec-hology. 

4. We mzst achieve more ecanomic rates of production.. 

5. We must realistically cast, bcdgat, and fully J 

fuzz4 in the EYE2 snd Extended Flanning Annex; prccurexent, 

logistics and manpower for major acquisition 2rograms. 

B 

I 

6..Readiness and sustainability o€*deployed weapons 

are prim;l,y objectives and must be considered fzom '--fe start 

of weapon .syste~ pncpanii. 

7. A strorrg industrial base is necessary for s strcx 

defPnse, The prqer arms-lenqth relationships with industr.: 

shauld not be inteareted by Do3 cr industry as adversaria:. 

/ 

DcD-0-FIB 

and Corgress 

$ 1 i... 

Mzny of the decisions announced ir. this memrzn&m 

can be implerriented within DoD's legislative authority. scz 

decisions need to be coordinzted with Om- A number of 

recnmnecdations will need Cmgressional action before finaL 

implementstiorz can take place. In those Latter casss, we. 

will work closely with approsriate Congressional comnittess 

and their staffs to explain a d justify our recomeadations 

for chasges to legislative requiremen%. 

* 

DoD- Industry . Relz t ions hi p 

Whila 3oD should be toucjh in contract negotiatiozs 

as part of the buyer-seller relationship, this does not 

mean tha': relationships between rnanagssaent and ii:dcskry Y 

should necesszrily be advezsarial. Industry ant! goverrntiz: 

- 

have a shared rospsnsibility and must assme a new spiri: - 

/ 

2

a- 

- 

0ikr'jectiv-t in stremlining the Don ?xqiiisition; 

pracess ks ducbg casts. - All DoD staff's am2 

~ezsvi- mms- shamld keep this uppermost in their minds, 

We zI.1 in- be WE aggxessive and imaginative in looking 

for wap ta save m y 

tion process- I Laak to each of you tc use your enhanced 

aut3czity to bzhq *ut major savings and i.xproved m2thcds 

af c3QeratLm- 

throughout all phases of the acquisi- 

Eecisions to Inp rcmz Acquisition Policy and ~rocess 

me Seszretiszy and I are determined to reduce substantially 

cast ~wzrrans8 deploy adeqcate quantities of reedad 

spstezrs that ue: aperationally effective and read.], snd do 

this krs e shamest possible time. We are convince6 thzt 

the actiarrs fir=ted ix =\e attachment will significantly 

contribute ach5eviT-g *hess objectives. The rriajor decisions 

for 5zzp;rav-t cw- be summarized in faur citsgories: 

Ma- AcqpE ' -sLtion Cost 

Inczease program stability by fully fundirg R&D / 

and procurez%est at levels sufficient ta ensure afficient 

cost, swpzrtability a d sckedule perfornance, aaa miximizing 

changes ta the zpproved program. 

. . i ... 

a BpLenent multi-year procurement to irqrove productian / 

processesc increase ecocomy-of-scale h t buyiag, decrease 

financial barnwing casts and reduce a&ninistrativ,2 burden 

in cf2ntrz.Cking- 

0 Rd~ace adniriistrztivc ccrsts by simplifying prosedues, 

seeking relief from costly lesislative requirements 

and reducing tiie rimer of DoD regulations and directives. 

0 Enmurage capital investment to increese productivity 

in the defense industry by improved ccntracting, aore rzasazable 

risk shsriag, and-increased incentivas, - 

0 Prmtote Services use of ecor-omic grodiictian rates 

to re6uce unit costs and clecreaae' acquisition time. 

0 Require Services ta budget to nost likely cost to 

reduce cost overruns and provide stability. 

2' 

3

Shorten Acquisition Time 

0 Implement Preplanned ?roduct Improvement to reduce 

-it costs and decrease acquisition time. 

0 Provide adequate "front end" funding for test hardware. / 

Improve Weapons Support and Readiness 

0 Stress acquisition strategies that provide incentives 

to contractors to attain reliability and maintainability goals. 

0 Establish readiness objectives early in development 

programs . 

Improve the DSARC Process 

0 Move toward controlied decentralization of the acquisi- / 

tion process to the Services. 

0 Reduce the data and briefings required by the Services / 

and other DoD staffs. 

0 Tie the acquisition process more closely to the PPBS. d 

Imp1eme-n-tationf the Dccisims 

Implementation of the decisions announced in this 

memorandum is as important as the decisions the&elves. Many 

decisions, even those within DoD's authority, will take time 

to implc-ent fully. A large number of DoD managers will have 

to take part on a worldwide basis. 

I assign overall responsibility to the Under Secretary 

of Defense for Research, Engineering and Acquisition for monitoring 

and follow-up of all decisions- in this report. I expect 

him to establish an appropriats implementing and reporting 

system. The first report will be submitted to me by the end 

of May and every month thereafter until further notice. 

Both the Secretary and I appreciate the work you and your 

staffs have provided during this assessment. 

!// 

Attachments 

4 

I. 30

Recorntendation 1 

t'ANAGEiYENT PRI:'!CiPLES 

The Sterinq Group recommends that L5e Deputy Secretary Df 

~e;Fense: rezffim t!e following major asquisiticn management 

prisciples : 

I, ~n -roved staternext of long-range Defense policy, 

strategy acd resources w ill 5e provided to the Services in order 

to establish a framewcrk for military objectives , goals, 3x16 

missism 2larzl.lirq t3 enhance program stabili ti-. 

2, Respmsibility, authority and. accountability fer programs 

shcdd bs at the lcwsst levels of the organization at which a 

tot& view of the program rests. 

3, ServLce Froqram Manager.; should hsve the res?onslbility, 

authcrB?q, resources, an6 guidelines (goals and thresholds) 

adequate to efficiently execute &&e program. This shuld 

include +he s ysta specific acquisition strateq fcr attainment 

of the zguired cqerstional znd readiness capability, arid cpproprLa* 

flexibility to tailor the acquisiticn strategy to estisatcs . 

of the btvelopent pricrities and risks. 

dl-. Evol%tioxary zlternatives whrch cse e lower risk approach 

t2 f =byy =-at ba examine3 when ilew program are proposed. 

Solntians at the frontiers of technology. Rust provide an aLternati& 

which Q fers rn evolutionary a2proacS. Pre-planned Prodact I,~prove-: 

ment e2 f I) shacl2 become an integral 23rt of the Acqu.isition Strate=. 

5. Achievement of economic rates of. prochcticn is a fundicrrental 

goal uf tke acquisition pocess. 

6. The Senices should plan to realistically Sud,-ee and fully 

fund in the ZYDP and Extended'Planning 3-nfiex (E??.! the R&D, p_pozuro_- 

ment, logistics a d maqower costs at the ltvels necessary to protsct 14' 

the acquisition schedule established at progrzm approval points, and 

to achieve acceptable readiness levels. 

b 

7. Improved readiness is a primary objective 05 the acquisici,m 

prcc~s of comparable importance to ra2iicea unit cozt or rduced 

acqtzisition ti-.. Resmrces to achieve rea6irsss will receive the 

sdme emphasis as tbose required. to achieye sehed:ile or performaxe 

objactives. Include from the start of weapo.1 system programs 

designed-in reliability, maintzinability an6 support. 

8. The 2rqer "arms-length" buyer-seiier relationship skauE 

not be interpreteC by governnient cr industry as adversarizl. %e 

DoD should Se tou5h in contract negotiations. gut wes?ons acq.r:isition 

shoull be rnzinags6 on a prticipating basis usir.g irdustry 

as A full cons+dxctive team xenber. A strortg industrial base LS 

necessary for a strong defense. 

I 

*/' 

I Need More Informatign: 

Disapproved: 

b

Recommendation 2 

A rmltstion~x system development ap?r>aci? which uses new 

ana .urrtx%d technology to meet a military thr5at can offer 

dzzmazk -pot~~tial 

paycffs, but frequently ends up with large 

cask 5ncn3sa and schedule siippages, 

Amesnhticnary a>proac,i offers an altsmative whict minimizes 

-aL 

risk, and consciously hserts advanced tachnalogy 

tbmgh @,ambed upgrades of +hose deployed subsystems which offer 

#€?'n 

' benefits, In tlhis manner the lead time to field. 

t=~lq%zaL advances can be shortened while ar, aggressive 

s m I- 5 05 fielded perfornance imgrcvextents can be expected 

dn- j5= ==-zice'lifa of the systems. This'corxept is called 

e- m- . 'prrcduc-t: Inprovemeat (P31), end is corrmoniy us& in 

-& i3xzTlstry, 

-tian - Most new and existing system should be 

m . Ear perfornance growth thrcugh the applicatiou of 

s e w ".s;;t ugxggades to key subsystems in order ts reduce &velc?nent 

rum an2 tzkz best evantage of tec.hnological advance. 

-- 

i 

-s - Can reduce acquisiticn time, raduce developraCrnii 

e ami cos",, an6 enhance fielded performance through th2 

depbynesk 05 upgrace=. A revalutionary apgroach can always 5s 

a v s k ~ denanbs of the threat. or other compelling . 

*U%aq d rewire such an approach. . 

Dis&nzztaqes - %e 2erforriiazce needed to met a critiezl 

r q dLctatfs fbe ase of distant techxaiogy, but tke factors 

involLmed -h -5 a decision ase seldorr, incisive. Therefore, tke 

c5o.k~ be&- alternatives is not likely to be &solatel;: clea=. 

Actbm Squired: 

- ZSERE, working with the Services, develop within 33 

days a plzn 5er impLementing Preplanxed Product Improverne;it inc1cdir.g 

def-th m.& criteria for application. 

- OS3IiE request the Services to evaluate. ongoing proqrans 

to detemckte atsntial for payoff from the application of preglacned 

prom kipr&ement, znd. to present results at ths r\,ext DSARC. 

- USDRE assure Services have fixed. the responsibility for 

rev&.< of qpsrtmitias for product improve-.nent after any systcn 

reahs t3e €%?12, and to develop a product ixprovement 2lan. 

SFproved : 

Tdea Y.eeC1s :.!ora Do~.*elogmcnt: 

I: XeeC Mor2 Infcrmation: 

lisay groved : 

2

Reco,mendatAoA: Encoiira-;e extensive use oE rnultiyesr 

procurcaent base2 upon u case-by-case benefit,'rlsk analysis. 

Advanteges : Multiyeas procur ment could result in iversge 

dollar savin5-s of-o.25 ir. unit procuremelit cost through 

im?roved eccnornies and effid-encies in production pc'ocesses, 

economy-of-scilc 1st buying, decreased financial borrowing 

costs, better utilization of industrial facilities, and a red-xtion 

in the sdqiniszative burden in the placemznt srtd acIministra+ion 

of contracts ' In addition, the stimulated ir-vestxient in 2zodilction 

equipment will. result in lower-defect, higher quality prcducts. 

The Earket stability will also e?mnce the cortinuity of subcontractor 

supply lines and thereby decrease acquisition trma. SL-ge 

capability sill also be improved, 

Disadvan Laces-: This funcli -?cj techniq-ie mr'ences ii; rnoney and 

cornnits future Congresses. If used to excess, it would Tignificrtntly 

reduce the flexibility of the Secretary of Defense C,=, respor.2 to 

unforeseen chanses in the external threat. If a multiyear procuzement 

was used t!; lock in a bcrder lipe pro.- c3st.s Gocld-be 

increased if tha, gr3qr3m - was ccnce'led. In or5er to avoid these 

poteztial disac?rantaqo-s, &be fol1min-j criteriz are recorz-.o,nd?d 

as general g.Jidelines to screen pzential mltiyear csnrlihres : 

(1) significant Se-fit. +n tfi e Government; (2) stabl!.i'-,.l. of 

req-+c, t - * v 7- --J . . 2n 6 pun6ing; a n- 

i e o f 

c-_Cid4npp 

i? cost sstimates and ar :ontractor capahilines. 

Action Required: 

____II__ 

i 

a. G- ? usel zus-

I 

c Recsmmendation 4 

Pro7rarn iastabili5y is inherently cost117 in both tine a:id 

noney. The 47 mjj3,r procjrams ccvered by the 3eccrnber 31, 1930, 

Select=& AcqalsFtion Eeprts (SA%) reflect& total ccst grcvt.3 

of 129 percent over tbs Milestone II estimates. F:easons for 

growth 2re ecor-.&c 02 inflation (27 percent) , quantity changEs 

(26 oercwt), estbzaking ckenges (18 percent) , schedule chanqes 

(15 percent), suppart changes (7 percent), engineerills cham% 

(5 percsnt) , and of?.?.er changes (2 percent). Fcrty O m (41) 

percent of ail cost qrowth is due to quantity aiid schedale changes. 

Of the 47 praqrams, 14 have had quantity increases, 20 

quantity decreasesl a d 3 zre unchanged. Sch9dube c.k.ar!l.qes have 

resulted in redilced costs e2 4 programs arLd iricrrascd ccsts 0:: 

41. The most corizmn ca~se for these changes is finzncisl. The 

budget levels and rel.a%ive priorities of. conpetinr; gcosrarns fcrce 

touch decisicns to -,late proqrams, reduce the number 3F wsapons, 

strztch the c?meILqient progrztm, delay pianned production or 

stretck the plam&- bq. 

- 

gram is Saselined, mwt pvtTy Mi1astnna If. Liait strekch-outs 

due to ftlndizg cmstraints (exce7,t when3andate2 5y the Secretap 

Disadvsntaces: . Budget flexi5iliky will be redeced. 

Action 9eauirE.d : SecDef directs thzt &Jrinq prograz arid 

budset reviews 5v OSD C'DRB) the Service Secrotzries must ex?lain 

and- justify 2ifferences between proqram Saselizes established at 

Milesto?.e I1 an2 thi quatit? and funding in ths 7rogran or hac',get 

under review,

T9-P 

,,.LOUFAGE 

Rccommendatio?. 5 

--- 

CAPITAL IXV'CSTMZYT TC ENHANCE F ?.3GCCTI7ITY 

Productivity in che defense sector of the 13.5. economy nas 

been lagging, ir. large part because of lcw isvels of capiLsI 

icvestnent corr.?ared to U. S . manuf actaring Lr. general. ~zsh f lsvr 

probl=ms, tax palicy, high interesr rates, ar,d how returri OIL 

irivestment (RGI) tend tc lir-it available investment capital. Tge 

industruiews 

-.-.-- - low prof its and proqrm i ~ . ~ ~ ~ ~ ~ ~ 

~ivestxnent in cz-1 equipment; T3is sitcation h2.s two majozunplications: 

a tendency to shift from deferrse to commercial 

. kusiness, and z decrease in funds available fcr facilitizatron. 

Recommendation: 

Encaurage caFital investment. 

Advantages : Will increase long-tern investnents whicn shonI.2 

lead to lower -unit costs of weapons systems. Increass productivity. 

Disadvantages : Earlier Government dishrsacnts . Sone 

reduction in tax revenues. 

Action 3equired: VSDRE should have the prime res3onsiSility 

to iqlement the following actions uorking cioseiy ,dith Gen2ral 

Comsel, Legislztive A.ffairs , aad the Service Xaterizl Comar,ds. 

a. Geceral Counsel should suFport IZqislative initiatives' 

k. Stzucture .contracts to ;;ernit com-,ariics to .skzg-e-i3 czst 

-&ions 

?- re&tj c ' ns from productivitv irivestnents. 3odify +he 

Defense Acqgisition Reguiztion (DAR) profit iwiila. Allow 

- 

4or 

awd 5ees inversely progortional to msintainabilit:. costs. 

-- 

--. I---__. 

c. Increase use an? frequency of rnLLe-s-sg-e-Si.l-lings axl . 

avanced. funding. Exgledite 3al:ing cycle. 

-- - 

2. Provide for niiociiticn of profit levels comenzurate 

wj J 

th risk and contractor investiient; --- 

ensure that -gecer.t grof it 

solicy changes are iaplemente2 at all levels. 

e. Instruct the Se,?rices oE the need tc grant equitable 

Economic Price Adjustxent (EPA) clauses in all t?propriate 

procurements. Contract price adjustments mcie in accordance 

with EPA Rrovisions should recognize the impxt of inflation on 

profits. Ensure that these clauses are axtended to subcontractors. 

f. 

- 

Increase en.phasls on Manuzacturicg- 

Q. Provide a consistent policy Ghich wtll ?srmo:e innovation 

by giving contractors ali the Econonic and cmmercial incentives 

-- 

of the gatent systen. Provide policies to protect proprietary 

rights 3ne Aata. --- - 

h. General Counsel should work to rere5.l thz 'V'j.nsc:- 

Trzmmell ?,c>. - 

?in?rove C: : .$= 

Idea Seecis >!ore Eeveiopment : -- 

I Yee? !-?ore Infornation: 

Disapprove?: 

- 

ogy Program. 

-1 

a 

5 

. . .- 

A - J

_I. 

RecomzienCatFon 6 

Intentionally low I-litial cost estimates are a prine contributim 

to appwst cost qrowth. Prosram costs are scsstimes nu"- 

pcselv undesst3ted either because DUo.for:cintJ a ?- rg gxc - ,&At, 

av.ail.a.~l.~f_uncl:lfLs~ ratheuhan the fundins it takes to dc the i&-- 

or ....be-Taus_ft_the mnt-ractors are mrposelv lotfirA%LtxL-Qzt estiaa:es 

..-I_-- in order - t.o gin a co~t~act-~i.t~~~~-eofr.~c-~~-€~~costa 

cn . 

follow-on contrazts. Either practice is referred to ES "Luying in." 

When the actual casts hecome apgazent, DoD is severely criticized 

for cost ov?rms and Lbre are insufficient funds availajle to . 

prccure at ecornorcic prc6uction rates. Also. the negotiats?d contract 

cost 2oes riot iziclu6e futare engiseering changes or Fos.2-contrect 

award cegotiations which can drive costs higher. 

iXeccmandation: Require the Services'to budget to rnost likely 

or expected cosfc, in-.; zz.?c+c?.ab - Le cost iricrezses lue to risk. 

Pravise incentiyes E m acquislticn officers =-to n:ake 

art6 us= realistic cost estimates. 

Advantages: Less cost gzowtfi. More realiskic loa$-zerm dec 

~anse acquisition kuCqet. Increased progrzi s:sbili+-.-7. 

Disadvantaqes: difficulty in determining i2 a cantractor is 

prwidin? rtalistic estinafes. Political difzicxlty 13 rejecfiilg 

'Sics that project ?-ices lower than costs. r3if5icul.t tc. SuSget 

ftlnciinc; qreater i2-i GSlicZy-knovin contractual r'ac5;ing. 

Actior? 5ezuire2: ASD(C), regpire the Services to k*;dTet to rncst 

likcsly or ex?ecte< costs inckdinq'grsCicta5le c2st incrP-=ses due to 

risk, iiisceaz cf the contractually agreed-upon cost. TSURS zn5 the 

Services Frovide incentives :or acquisitioc of2icers anci cantractors 

to accxate:? sroject costs, inclilding financial ir.centi\es a22 performance 

eval-Lztion zcnsiderations to DOE personnel, ani! Frofit incentivas 

to industry to reduce costs. 

FipDroved Idea Needs : Nore Development: -E- 

I Need Nore Info-qatim: -- 

Disapproved: -

5ecoaurendation - 

ECCPSOMIC PRODlJ~ON RAT= 

The cost and tine needed to put a xeapon system int3 the 

field can be rsduced by estzblisiiing a2d sustaininc ecc3omic 

rates of production (i.e., the rate at which wit cost doesn't 

decraase significantly with furth3r raze increases). Tiqht 

budgets and strong competiticn bzeween programs have force4 

many p'rograms to accept funding levels in the budqet which will 

not sustain an scosso~ic rate of pzoduction. 

A ccmitmer,t co econamic pmduction rates cancot -rule out 

sound argurnsnts for lower (or higher) rates. Far exmpls, the 

Services nay wish to stretch a proqran ovpr a number of years 

in order tc, prcserve a warm prodliction base to pernit rapid 

mohblization to ineat a crisis or war. ffotitver, this ;quires 

stockpiling of nacerials, parts and subsystems to he effective. 

Recormendation : Services mist use economic productioc 

rates in their prcgram and tudgee reqursts, or explain zne be 

prs.gared. to dzftnd the reascc why a differect rate vas selected, 

Advantacies: 

systens. 

Save tine ar--6 reEuce cost or' acqi.zirinq ~ e w 

- 0 . 

Disadvantaces: Will buy oat the total system faster 

(shorter production run for .z given quantity) wiih F Z Z ~ filn%ica 

coc2eting with other systems, gossible work:oed f2uc~c:etci ncs in 

certair, ixdusrries with accasioral dead time asd possiklt cros~css 

of the Industrisl 3zse. Can mcrease cost of correctinc support 

pro'oltns. . . . 

Actio? 2egg:reE: Sacretary cf Defense cstab:.ish 90i.x.cy 

reqzirinq Se-=vices to fund proqrams at econclnic rates oc justif;- 

any differences duziog budget reviews by CSD and the C23. USDRE 

and XSE(C) include this requirement in the FY $3 proqram an3 

budget Guidance. 

Approved : 

ICea Meeds More Ijeveloprnent 

I Need More Imf ornation : 

Disapproved: 

7

Recmmendation 8 ' 

ASSUiiE AP?SGPRIF.TE 

C3NTRACT TYFE 

Industry has repeatedly, over a long period, expressed se,,-7 ous 

concerns about the recurring USE of the wrong type cf eontrazt. In 

particuler, fixed price contracts are frequently mployed for 

RDT5rE and early pro8uction, which have leqitimate cost cncestainties. 

This leads to a high risk situation for tke contrsctars ard 

to cost overruns for DoD. Current 9oD policies a??d reg-alatims 

give guidsnce as to the use of apprc2riaze corntract types: kowver, 

this guidance is not being followed Ln the fi9ld. 

Recommendation: Give the Program Manage'rs the resFonsihillty 

to tailor contract types to balsnce program needs snd ccst savincs 

with realistic assessment cjf an acceptable baiance of contractor 

and government risk, Reconzenda tion l/Managenent Principle 3 

states that the Program Kacayers be give2 the authority to determine 

the sbecific acquisition straten. 

uvantaces: 

Precludes a corr.pany Erm beinc; forced t~ ZS~UFC 

cost risk S.ayor,5 their finazclz1 zbility. 

May increase competition if contzac-tor risks 

are recognized. 

Gives the Proqran Msnacers rLiore flexibility to 

accom.o

Rzcoimzridation 9 

As a result of recurring problems with T ..ieap~~~ systen SLIFFO,-~, 

the recent rsvision of acquisition policies inclxcles a za:cr enphasis 

on support issues, including reliability, rTaaintecznce, 

spares, test squipnent, and maintenance rnazpower e These reccnr, 

policies arc generaily sound, zre not rlirectly inflkznced by the 

major accpisition prxess options presnfitly un2er consideraticn 

and can be unde-rtaken under any opticn. 

To be effective the solicies require Secretary of Defense 

commitner,t- Tine need for this soecir'ic commitFent results from 

the compe+Ation among the conflicting 3bjectives of high perfomance, 

lover cost, shorter schedules, better reliatility and 

mainter,anzc, and s u~)po=t. 

Recornendstion: Establish rasdiness objectives for cach 

development progrm to include estixacss of the rea2.ires.5 level 

to be achieved at ealy fieldinc en2 at maturity. Implement 

acquisitim policy establishing "designed-in" reli3bilitv znd 

rsadiness czpabilities- The inplementstion must emphasize the 

objectives cf shortenirg the overtll tice Celiver t-c.n-e7t to 

the trccns which rneet mission 2 ~ reteiness 5 r?ee&; the zEe5 for 

imgrove5 estkites or' the R&D md suppxt resourcea required; ant! 

additionally, ask that some farce, elements(3) 3e carqetcci for a 

major i.mprcvsnier,t in &signed-in scpport capability to be less 

dependent cm a support taiL 

Advantaaes: Clarifies khat izprcveriext in rea2'i;iess is a 

rnajor objective of tke AdTinistratim, and that rxplszentatix 

must take place. . 

i .. 

Disac3vantaces : Will require additiona-1 tkchnical effcrt and 

resources early in acquisition prograns. 

Acticrn R+aired: L%XA&L draft SecPef policy letcer t3 

issued withi? thirty days, reaffirming ;Irsapons su3~0r"L pol 

objectives, and tasking the Services to 2evelop Lxplimer,ti 

guidelines, inclufiing procedures for addressing SQpport ea 

acquisitica p-ograms. 

A. 

Approved : 

Idea Needs %are Developrncnt: - 

I Need More Information: 

Disapproved : - 

9

Recoinmendation 10 

REDUCE THE ADMINISTPATIYE COST AND TIYE TO PROCURE ITEMS 

In 1974, less st-ringect rqdirements were established fox 

DOD Contract procedures asaaciatsd with 2urchases under $10,000. 

The purpose was to reduce both ?he time and paperwork costs to 

a level commensurate w ith the value of the iten! 5eing purchased. 

Over the years the tendency of a bureaucracy to take precautions 

has expanded the paperwork associated with a procuremest, and 

inflation has reduced the purchasing power of tke dollar until 

the $10,000 item of 1974 would cost almost twice that much to 

purchase today. 

A similar inequity exists in the adainistrative procedzrEs 

governing contract funGing execution. Deoartment of Defensc and 

Service procedures place zumerous administrative requirexn?s on 

the obligation of funds. Tkey provide upnecessarily caiezsorne 

safeguards for the public interest., to a cer5ain extent thereby, 

thwarting that interesk. There is also a general tzndency to 

apply the most burdensme procedures, even if administrative 

shortcuts are allowed. The Doi) is notivsting its csntract sr.5 

fund achinistrators to avoid the least possibility or‘ criticisn 

rather than to use ecoacnic procedures. 

a. Recornlendation: Kaise the $LOR linit far purchese crder 

contract use to $25K to aczunungdate inflation end reducz unneczs-. 

sary Fagem-oric and review. Letter is enro-ite frqm Joint Loqistics 

Commanders to DEPSECDEF recommending change. Pxposal is czrrently 

in staffinq at 0:%3 foz inclusion in the Unizom Ir3curement 

Systen (U?S) and as a legislative initiative. 

. ._. , 

Action Required: DEPSZCDEF reccmend thqt Ot!B (CFPP) I 

initiate change to 10 E-4. 

b. Recommendation: Raise threshold for co2trzcto.r costing’ 

data input from $100K to $500K to accommodate infiation and 

reflect- current auditing 2rocedures. (Paprwork locd is such 

that only data for contracts over $500X is -u&.ly auZ1tz-d 

today. f 

Action Required : DEPSECDEF recornmen6 that OME (OFPP 1 

initiate legislative change to 1sC2.3n6. 

c. Recommendation: 3zise threshold for SarviTe Secretery 

review of Contract Deterniration and Findings (3&?) foz dT&S 

from Sl.~-O~,OOO to $1 mil&ior?. Current level WBS set in rid- 

1960s. IiiqheF~-~e~.6u2il still cover 90 + ’8 of expenditures 

(dollars). Higher limit supprted by JLC. 

- 

10 

:- .

PU3LIC L-4W 97452-SEpT. 8. 1982 

, 

DEPARTMENT OF DEFENSE 

AUTHORIZATION ACT, 1983 

i 

89-139 0 - 82 (278)

PUBLIC L.4W 9’7-52-SEFT. 8, 1952 % STAT. 139 

(11 by striking out “and” after “198P” and inserting in heu 

thereof a comma: - __ and 

121 by inserting I‘. and mag not exceed S900,fioo.OOO in fiscal 

pear 1981” after ”1963“. 

ISCREASE IS D O U R THRESHOLD FOR REPORTS TO CONCaEss 

REGARDING TRANSFER OF DEFENSE ARTICLES 

SEC. 1101. Section E13 of the Deparnnent of Defense A pmpriation 

Authorization Act. 1976 (Public Law 94-10s; 10 V1.C. 133 

note). is amended by striking out “525.000,OOO” and hating in lieu 

thereof “SW,~O,OOO’’. 

KEPORTS ON FUNDING OF TECHN0UX;Y TRUU’SFEB CONTROL WUCY 

SEC. 1105. Section 138 of title IO, United States code, is amended 

by adding at the end thereof the following new subsechon: 

‘Yh) The Secretary of Defense shall submit to Congres a written 

report, not later than February 15 of each f d yearg recoramending 

the amount of funds.to be appropriated to the Department of 

Defense for the next fwal year for functions relating to the formulation 

and carrying out of Department of Defense policies on the 

control of technology transfer and activities related to the control of 

technology transfer. The Secretary shail include in that report the 

proposed allocation of the funds requested for such purpose and the funds. 

number of personnel proposed to be assigned to carry out such 

activities during such fiscal year.”. 

LIMITATION ON DEFENSE WNDS FOR SPACE SAUTRg 

SEC. ‘1106. Notwithstanding any other provision of law, during 

fwal year 1983 the Secretary of Defense shall not Wer funds to 

the Administrator of the National Aeronautics and Space Adminik 

tration to pay any part of the cost of lacing Department of Defense 

payioads into orbit by means of the i pace Shuttle except in accordance 

with laws in effect on July 1,1982, and interagency agreements 

made pursuant to such laws. 

IMPROVED OVERSIGHT OF CO!j“ GXOOWTH IN MAJOB D m S E 

ACQUISITION PROGRAMS 

SEC. 1107. (ax11 Chapter 4 of title 10, United States Code, is 

amended by inserting after section 139 the following new sections: 

tion on of 

“§ 139% Oversight ot cost growth in major programs: Selected 10 USC439a 

Acquisition Reports 

“(a) In this section: 

De6initOnS. 

’’(1)’Major defense acquisition program’ means a Department 

of Defense acquisition program that is not a highly sensitive 

classified program (as determined by the Secretary of Defensef 

and- 

“(A) that is designated by the Secretary of Defense as a 

major defense acquisition program; or 

“(B) that is estimated by the Secretary of Defense to 

require an eventual total expenditure for resear& develop 

ment, test, and evaluation of more than $200,000.000 (based 

on fiscal year 1980 constant dollars) or an eventual btal 

d

96 STAT. 730 PUBLIC LAW 97-252-SEP”. 8,1982 

% I d 

Aqulsicion 

Reports. 

10 usc 139. 

expenditure for procurement of more than %1,OOO,~,~ 

\bad on fiscal year 1910 consst dollars). 

“(2) ‘Program acquisition unit cost’, with respect to a major 

defense acquisition program. means the amount equal to (A) the 

total cost for devdopment and procurement of, and systemspecific 

rniIiit3ry construction for, the acquisition program, 

divided by (B) the number of fuliy-configured end items to be 

produced for the acquisition program. 

‘‘(3,‘Procurement unit cost’, with respect to a major defense 

acquisition program, means the amount qual to (A) the total of 

all procurement funds appropriated for the prograrn for a fkal 

year, reduced by the amount of funds appropriated for such 

fmd year for advanced procurement for such program in any 

subsequent year and increased by any amount appropriated m 

years before such fiscal year for acfvanced procurement for such 

program in such f& year, divided by (B! the number of fuilyconfigured 

end items to be procured with such funds during 

such fil 

year. 

“(4) ‘Major contract’, with respect to a major defense acquisition 

program, means (A) each prime contract’ under the 

program, and (B) each associate or Government-furnished 

equipment contract under the program that is one of the six 

largest contracts under the program in dollar amount. 

“(bX1) The Secretary of Defense shdI submit to Congress at the 

end of each f-I-pear quarter a report on current major defense 

acquisition programs. Except as provided in paragraphs 121 and (3). 

each such report shaIl include a status report on each defense 

acquisition program that at the end of such quarter is a major 

defense acquisition program. Reports under this section shall be 

known as Selected Acquisition Reports 

“(2) A status report on a major defense acquisition program need 

not be included in the Selected Acquisition Repor$ for the second, 

. 

third, or fourth quarter of a fiscal year if such a report was included 

in a pretlous Selected Acquisition Repcrt for that f& year and 

there has been AO change in program cost, performance, or schedule 

since the most recent such report. 

“(3) A status report on a particular major defense acquisition 

program need not be included in any Selected Acquisition Report 

with the approval of the Commit- on Armed Services of the 

Senate and House of Representatives. 

“(c) Each Selected Acquisition Report for the first quarter of a 

fmal year shall include (1) the Same information, in detailed and 

summarized form, as is provided in reports submitted under section 

139 of this title, (2) the current program acquisition unit cast for 

each major defense acquisition program included in the report and 

the history of that cast from the date the program was h t inchided 

in a Selected Acquisition Report to the end of the quarter for which 

the current report is submitted, and (3) such other information as 

the Secretary of Defense considers appropriate. Selected Acquisition 

Reports for the first quarter of a fkal year shall be known as 

comprehensive annual Selected Acquisition Reports. 

“idX1) Each Selected Acquisition Report for the second, third, and 

fourth quarters of a fiscaI year shall inchde- 

“(A) with respect to each major defense acquisition program 

that was induded in the most recent comprehensive annual 

Selected Acquisition Report, the information described in sub 

section (e); and

PUBLIC LAW 93-232-SEFI’. 8, ?98:! 96 STAT. 741 

“(B) with respect to each major defense acquisition program 

that was not included in the mast rece-at comprehensive sand 

Selected Acquisition Report, the information described in sub 

section (c). 

“(2) Selected Acquisition €&ports for the second. third, and fourth 

quarters of a fiscal year shall be known as Quarterly Selected 

Acquisition Reports. 

“(el Information to be indudeti under this subsectioa in a Quarterly 

Selected Acquisition Repxt with respect t~ a majop defense 

acquisitiom program is as follows 

“(1) The quantity of item to be purchased under the pmgram. 

“(2) The program acquisition cost. 

“(3) The program acquisition unit cast. 

“(4) The current procurement cost for the program. 

“(5) The current procurement unit cost for the program 

‘‘(6) The reasons for any change in pmgram aquisitaon cost, 

program acquisition unit cast, pmcurement at,or p- 

ment unit cost or ira program schedule from the previous 

SeIected Acquisition Report. 

“(7) The major contracts under the program and the reasons 

for any cost or schedule variances under those contracts since 

the last Seleded Acquisition Report. 

“(8) The completion status of the pmgrsm (A) expressed as the 

percentage that the number of years for which funds have been 

appropriated for the program is of the number of y m for 

which it is planned that funds wiU be appropriated for the 

program, and G3) expressed as the percentage that the amount 

of funds that have been appropriated for the program is of the 

total amount of funds which it is planned wiU be appropriated 

for the program. 

‘79) Program higuhts since the last Saected Acquisition 

hpart. 

“(D Each comprehensive annual Selected Acquisition Report shall 

be submitted within 30 days aRer the date on which the h i - 

dent transmits the Budget to Congress for the following fkai year, 

and each Quarterly Selected Acquisition Report shall be submitted 

within 30 days after the end of the fiscal-year quarter. If a 

preliminary report is submitted for the comprehensive annual 

Selected Acquisition Report in any year, the f d repxt shall be 

submitted within 15 days after the submission of the prereport. 

“O139b. Oversight of cost growth of major programs: unit cost 10 USC 139b. 

reports 

“(a) In this section: 

Definitions 

“(1)‘Najor defense acquisition program’, ‘program acquisition 

unit cost‘, ‘procurement unit cost, and ‘major wntmct’ have the 

Same meanings 88 provided in d o n 139da) of this title. An&, p. 739. 

“(2)‘Baseline Selected Aquiaition Report’, with respect to a 

unit cost report that is submitted under this eection to the 

Secretary concerned on a major defense acqui@tion pgram, 

means the Selected Acquisition Report in which loformatlon on 

the program is fust included or the comprehensive annual 

Selected Acquisition Report for the fiscal year immediately 

before the fiscal year containing the quarter with respect to 

which the unit cost report is submitted, whichever is later. 

3

POD SfAhgARD i?&M TERMS - 

Jul 8, 80 

300O.lC (Ex: 2) 

1. Ch8rgei;ble. Vitbin the respczsibility of B given organizat.iona1 sntrty', 

uhetaer government or ~omercibl. 

2. Failure. Tne event in which any past of an item does ncr, perform as 

xsquired by its pcrfonnarice specificatim. 

- 

3.- Snher2r.t R&H Value. Any mcssure of reliability or mtiintainability thaz 

includes only the effects of item desigr, uld instaliation, acd bsszrnas 

en ideel operating. and support tnvironmenr. 

. 

4. Life Enits. A measure of use hration anplicable to the item (such ES, 

operating Coats, cytlcs, disfmce, rounds fired, atto-n?ts to operrte). 

5. Nainteinability. The ability of an i%em to 3e retainzc ;.n 0;: restored tt 

specified ctnditioa whes neictcnance is performed by persomel hming 

specif'ed skill levels, uiing prescribed prscedures and resources, 6t esch 

presczibed level of maintenance an5 repair. 

6. Owrationel RhY Value. Any measure of rtliability or maixainzbility th3t 

dncludes the conbined sffzcts of item design, quality, kisrallation, 

environment, operation, maintenance, ac7d tspair. 

- 

c. Relevant. That vhich can occur oz x c x dtring tSe operatioml life CS an 

&tern inventsrp. 

_' \ 

8. Relizbilitr. The duration or Frobability of failure-free perfomante 

under stated conditions. 

3. Reliability, Mission. The ability of an item to pesfmn its tequirzd 

factions for the duration of a specified mission prafilc. 

10. R6H Acceuntinq. ?kt set of mathematical tasks which esreblish end allccare 

quantitative R&2 requira-ment%, 8nd predict ea2 neasure qamtitative 

R2i adiievemsnts . 

11. R63 Engineering. That set cf design, deve3opmsnt, and 3anufactxrirg tasks 

by which RW are achievot. 

12. Spsterr! R&?f Paramctsr. A mza=ure 3f relibbility or maictshability ir; whiA 

the -its of measuremen: are directly relbted to GparEtSonal readisess, 

rnissicn success, mEirtsnance mznpower cost, or logistic support cast. 

.- 

r

~ 

t 

. 

e HISSIGN SJCCZSS OR SEPEhQiiBXJlT 

OVhTXSEI? COST EDUCTION 

0 LOGISTIC SUPFORT COST 

-- LGGISTICS-REL4TED RELIABILITY PARA?lEER: 

MEAX TIE BE?kF;EN REflOVALS (mR) 

-9 LOGZSTICS~REUED HAIhTAINABILITY FARAHETE3: 

TOTAL PARTS COST PER P-fXOVAL, AT ALL LEVELS Or' REPAIR 

- 

' Basic technical measures of reliabilisy (HT3Fj ar,d meintsinsbil-ty (MIT?) 

must be c~oa51e of describinn - __- 

rhe mhintenance-rslated - - - -_. 

- - - .- - - - - svszem 

-e- - 263 

- - - 

uaramcerr. 

w 

' 

The other systerr R&X aarameters (excspi parts cost) use various subsess of 

tctal item li2e units, failures, and saintanance/repaiz time. 

.- 

2 

Action Recuired: DepSecDef recommzzdation to OMB (OF??? for 

a?pr&al; suks&uer,t chanqe to fief ense >.cquisition Requlations (D4P.I . 

d. Recommendatio?: Zncourzge greater us? of clsss (3iPs; which 

allows one 3&F co cover inV.?iti;>lG contracts. 3educcs tctsl -i2lm.e 

of contracts which must bz re-i~ewed, thus speedizg up processkg 

t iIne a 

Ae2ion Required: USDFjlE prepare policy statement encwra7ing 

greater use of class DWs. 

e. Recormendation: regroqrammin_q thresholes frm $2E 

---- 

Greatly redLces Service f l sxibimy to answer progrtn - 

- 

- Action Cecuired: 3ianew SecDef/DepSec!2eE eff3rts to obtain h 

- 0 

,-* {- 

Coxgressional Corrxnittse approvd (HASC, SASC, 2AC, SAC! . 

J 

3dvantages (all aboye recommendations) : Provides immediate relief 

from unnecessary ?aperwc:rk burZen. Reduces administrative 

lead. tine, which vFLl result In redactions in in-hcuse as5 insustry 

overhead csst. Supports 2 far inore efficierit Gover;?rre;it czs?. flow 

aaxgement. 

Disadvantages : Less opportunities fcr Lagal: rc-zie;;.s. 

f. RecomTendatim: Elimixu fhp for mn-Sccretzrial --- - bwel .. - 

. 

DGPs fm compstitive negotiated contrqct awards. 

.Adva.r;tages: 3educed paperwork and administrative 1 ~ tines. ~ 6 

In conjunction with recomnendation C above, co ificrsase 3&7 tkresholes, 

thc D&? requirement weald Se cansiderakly r%duced. 

Diss.=Zyrantages: Xany smaller procurement actions wauld nct ke 

reviewed Ebmc prograx office level. 

Action Reqnired: 

revie-7 p&lic law. 

SecEef submit recommended legislation to 

g. Overall Action: USDR&E prEpare implsnentation plan and reqrrired 

Secilel letters tiithin 60 days. Tie cost rhresholds to inflation. 

Approve5 : 2 

Idea Needs Fore Cevebpment : 

I Need More Inforaatlcn: 

- 

Disapproved : 

P 

11 

e 

,.. , 

I S

Rwomnerda tion 11 

.- ilateriai develoment and Earl:i prsrjductior, programs are silbject 

tc uncertaipties. Pr->gram. manzgers who explicitly request i'un2.a to 

address these uncertainties usLally find these fmds 3eleted 

either in the DoD PPBS process, by OPls, or by Conqress. Thsn when 

s~ch nncertzinties occur, undesirable funding adjtxtments arc r3- 

quired or the proSram must be delayed until the formal fundirig Srocess 

can respond with additional dollars. 

The Any has initiated, md Conqress has acceF+d , a Total Risk 

Assessing Cost Estimate (TIUCE) to expiizitly adlress prcgrax 23- 

certainties in the develc2ment of IIDT&Z budgat estiin3tes. T~O, .-my 

is studying the aFplFcation of this concept to early pro2uction cost 

estimtes, The other Services lack a smilar concept to justify 

reserve funds Lor dealing with deveiopaental uncertainties. 

Advantages: cost estiinatas xill Sa mre raalistic aver zinc. 

ProgrGs wiii be nore fuliy fcnded and ovsrall prograns wili 3e 

more stable. 

Disadvantages: Can eIiccurag.3 a mare costly treat!!e-?t af 

aroblams chat niqkt be sc;l-ed in other ;iaT;s (self-fulflllinq =roohecyl - 

bq.idget fw2s for ru:. rn particular, each service skoud rsvisw 

t s THXE concept ani? zither adopt it or ?repose ari altarnative 

for iheir cse? to WSDRE within 60 2ays. 

Approved : 2-- 

Idea Needs Yore Develqnent : I Need %ore Information: - 

Disapproved : -- 

.

. . 

7 

1

- 

3econ-nendet ion 13 

Over the past decade, the acquisrtion process has becone 

oveaburdene3 with governnental legisktion and requirement=. 

Indivi&uably, these regulaticns h we wzthwhile obfsrtives; 

csllectively, they impose a costly an8 burdensome requirement or: 

industry and the acquisition prccesr;. 

ReCC.?aneRdatiOn: Seek DoD relie2 from the mcre berdensone 

requiremtnts of govemmeatai regulations. 

A2vantages: Less cost to contractors in doing business 

with the Governmsnt. Esduce program costs. .Simpler contrsctinc 

procedures. Faster contrict awards. 

Disadvmtages: Reduced banefies which are considered in9ortant 

national qaals. Request fcr relief will certainly Spark 

' debates with the various inter.sstcd groups. 

Action 2equired: USDRSE =Istabfish -$:-* flcn 7-2 Service 

tean tc weiah the iiqact of t.k various governmentai requiGm'cnts 

and rtyclotiocs OI? the e.fflc.i~r?cy asd effectiveness af the 

tots1 DCS acq-dsitica anri coatrzctiiq process. IndustzjS-cB 

participate to' +he m2yiml-a erfenf nn nsibls. A report 

DI- prepared for tAe DepSecIjel within 745 days. 

_II) 

ApprmeC! : 

Idea Nged.; More Developient: 

I Need More Informtion: - 

Disapproved: 

. - 

14

Recommends t ion 14 

REDUCE THE NUF”3ZF OF DOD PIRZCTI‘JES 

f, 

The current acquisition directive refers to,= (u? from 

15 in 1971 and 26 in 1977) related directives and instructions. 

?he Services emulate these directives in im?lementation with their 

own implementing instructions; There is rarely a challenqe to 

these well-intentioned directions, nor is there a cost-benefit 

check performed. 2roqram rnanager and industry initiatives are 

often stilted by overregulation. With each new directive additional 

paserwork, manhours and other direct costs are exFended 

in compliance. -&onal, 

ca0. industry, GSD, and OFPP 

7147 =lTTel indicated tha+ rnnt .-=,pfrl> 

I 

1 :r i nposee iss.uance 

of sugerfiuous directives. Will reduce ?rogrm costs to the 

extent that directives require reports, data, docx?eEtction. 

a Disasvantaces: Ad6-s an additional Layer to tke srocess of 

issuingG-q a c7irectivs. Places the PLY ir. cor,trof of 

directives for areas of acquisition for wfiich’ he x y have little 

expertise. 

. . 

$2 Seri.rice, In- 

Action Required: U J w ? n l m + -J--. 

dustrv team to ?,ravi*P rp commendations wi thin(9%d+ys to substantially 

reduce the number of dir=ctives, an

Secomnendat icn -'. 5 

Program continuity requires that we budget for crocErEnen? 

funds mgre than a year in advance of the actual transitioi late 

of major acquisi ticn p?agrams frcrn SGr) t 3 procurement. Sizce 

most deveiopment yrcgram schedules are sxccss cricnted, so~etines 

the grocurement ttansitior! date arrives and the systea 

is not ready to buy. .Because mocurem3s-have 

b?en. 

budgeted, thcre is conciderableressvre to roce%d&:L:h. .?ro - 

dztion rath-er tlian accept Frosram --d 

de 

the Secretary 

major Military D2Fartments J haa YReTuthority to transfer 

these procurement funds to REP to correct deficienciez \cithout 

the prior approval'of OY3 and Congress, it cnuld signifizaFtly 

decrease the time in7:olved in resolvinp nrograrr! problms. 

Section 734 of P.L. 96-527 (9?all .!.~;,ropriatioi~*4ct) i'rcuides :? 

general authority for Transfers, not to excccd $TSQ million 

between DoD appropr'iarions. Its usc require,.; a de7cTiinatiw? 

by SecDef that such action is in th? !.atlonal Interest and 

must have prior approval by OW3. Our currenc reprogranmin: 

znangements wizh tile Congressioqal Ot etsight Com:ni ttee prcrids 

thst any such transfer is of "c~eci:.l interest: zf :he 

Cozzress" 2nd reqxires thsir nrior ~~nrc.c.;~? , i!i crc!;rws, 

'. \. 

Re c cm9 en 3 zt i or. : 05 t a in 1 e E i s I a t i 

- 

v e aut h o r i t v t n 

indivibua! wamn systen Procurement funds tc RDTF;E. 

~~ 

Ad-k-antases: Prcvides DcD with nore flexibility to ~es~>!.ve 

r:.enpon system funding deficiencies. 

.-\-cc:ids program delays associated tiitti (7?13/ 

Congressional review and apnroval of funzing 

ndjustficnts. 

'kiintains Droprsn stability by enzbllni: ;r3- 

Sr:m manager to resclvc nrqblcm.; riithiil rczal 

.i-:ai !able acqiiisi ticn fundins at- the ~ro.g:'zn 

i nrol*:ed

Di s sdvant-aq es : OY3 /toncres s iona I vis i h i li f.j occurs ai kfr 

the fact. 

Ccrtld jeopardize current appzogriation 

and authorizatior. process. 

Could feopasdize current reprograriuninq 

arrangaments with Congress. 

Pay be destabilizing. 

Action F.equired: ASD(C), workinq with the General Counsel, 

OMB and Congress establish ?rocedures for P!oD approval cf tke 

tracsfer of fmds in a given fiscal year frcn Procerement to KDDT&E 

for Zn inCiviaual weapon system when the Sscretarlr of Dafense 

&tennines that it is in tht Sational ;ntter=s;i to do so. 

Appro7red : 

Idea Yeeds Nore l,lt:vel~pment: 

I ?lee.? Xore Infomaticn: 

Disa??rcved : 

17 

,. 

. . ._

Recommsndstion 16 

Indiistry has said thzt even though there is recently nor^; attention 

?aid to "scpport" in DoD sclicitations, =here is a wi&spread 

belief that perfcrmaace aEd schedule are DoD's principal objsctives. 

There is a need far industry to apply more of their design 

talznts to reducing reliability and support problom. Seyord 

this a need to im2rove the ieentification and speeificaticx OF 

maintenafice macpower constraints arid for industry to include 

these constraints iii the designs. 

Recommendation : kquisition strategies should identify the 

approaches. to incectivize contra .ctor attainmect of reliability 

and zaintainability !R&M) goals ami reduce minterance maJpower 

and skill levels. These Should include the amroac'?, -- taken In 

the 3FP evaluation, as well as sRecific - awares, incentives a ~ ? 

guarantees, such as specific rewar& for inproving reliability. 

The Services should develop greater expertise in smport rekte2 

contrector inceztives through acalysis or' exyerienca pine? on 

DoD Frcgrans . 

Improvexents skould be 6evelope2 i?. the metho4 of prrojectinq 

critical naintecance manpower skill linitations and tr.=nslating 

these into design constraizts and objectivas for inzlusior: i~ 

RFPs and sgecifisations. 

Xcivactaoes: hgroves' reliability sr-d sugpxt. Retaces 

rnaintenscce maccower ZequireReats. 

pisaEvantaces: 

addicional funds. 

Izcentives other than cozpetition rezuize 

. . . _ . e . 

Actior? 3ecrtliree: GSDRE working. with the Services, &e-ielop 

guidelines to ixcludt th - proaches to incentiviae conzsactars 

to nprove support withmsays, followed by a VSERZ a d 

Service evaluation or' incentives within the next year. 

USDRE develop wits the Services,within 0p.e year, improved 

approaches to translace msintenance manpower skill projections 

into systen 2esign objectives. 

hgroved : J- 

;&ea Needs More Development : - 

I Need Kore informaticn: - 

Disapprcved : 

.

Recormendat ion 17 

. 

Dtlring recerrt yesrs there has been a ,3rowing tendency to 

centralize the decision process within the Dog. This practize 

has multiplied throughout +he numerous levels of aatSority in 

each of the Services, and has complicated the review process. 

This practice has, in and of itszlf, 1enc;thznei the acquisition 

cycls; created cost increases cue to delays in decisions; coafused 

the authority, responsibility acd acccuctability of the 

designated Ss-rvices Hanagers; a3 has stifled innovation which 

could prodace prsgram impravements ieadinc to cost szvings. 

The principle of decentralization shoul2 be applied to acquisition 

rnanagernen t . 

. Recommendation: Emphasize the requircrnent to achieve 

appropriate delegaticn of responsibility, autharity and accountability 

to and within each Servic2 far systen acquisition.to 

reduce the time and effort raquired for-DSARC ana Service majx 

systern reviews. 

.\GvaziZaqes: Zedaced systern cast and snortzr acquisition 

cycles. Kore efficient reporting Sy ana within =he Services. 

More streamlined 2rogran nensgement. ?lore rffisiect DSARC 

and other Frograii reviews. Potential eliminatian of layered 

managernent resulting in lean organiqations. 

Disadvantages: Same risk of losing a thorcqh functional 

analysis of the system hecau5;g of the elizinatioz of ncre cetailed 

reviews. 

P.ci;io:i ReqLired : USER€ nake ex3lici t the cnanyed characzer 

and the reduced maber of briefings and data for tke DSAK review. 

Approved : 

Idea Needs More Development: 

I Need More Information: 

Disapprove: 

19


Hintorlcally , iaf lation preeictions ha~a been lssser 

than the actual inflation that come to pass. The sittatian 

has baer, most severe in mjor weapon procram that spznd out 

slowly and extend into those years &en inflation estinstes 

have been poorest. The result is that uripredictsci inflatim 

has cut heavily into real program by as much as $5 3r 57 

billion a year. In addition to the sericus uneerfunding of 

major weapon aid. other purchases, D3t is charqed with pcor 

rr,an?.genent becacse of the amo:mts of cost Growth irn current 

dollars appearing in reports and io tho, process. 

Reconmmdation: Review various methods and alternativos 

for budgetirq =are realistically for inflation. 

as related to pianning and budgeting for Gajor acquisiticn 

programs and prcv?$&Z,a &cision paper to the Dep-ity Secretary 

of Dsfense wit5inWhays; discuss draft aptions wikh CY23 zn2 

apnronrlate Cocgreszional staff, 

. s i . l . 

Approved : 

Idea Needs Fore Derelopnenf : - 

I Need Fore Infcrmation: 

Disapproved: 

, ..

___- 


OF BUSINESS ax3 CormITIoN AT 

FORECASTIXG 

MAJOR DEFEJSE PLANTS 

The business base at key defense plants is not adcTuatzly 

considered in DoD prograrn development. Cross-Service inpzcts ar,b 

the effects of non-DoD work distorts business base projections and 

seriously increases overhead costs. This has caused larqe cost 

growth for certain weapons systems. Too little consideration is 

given to this factor in DoD planning and decision-making. 

Recommendation: The Services will increase the effort to coordinate 

progranming information that affects other Service overhead 

costs at given defense plants. Program offices will provide 

program projections to plant representatives so that overall 

business projections can bs maee available to the Services for 

planning and budgeting. 

Advantages: Better cost estimates and 1ower.cost to the 

government. Provi2es more realistic costs and stability. 

Action Required: Contract Administration functions will be 

directed to maintain a business base orojection, and government 

&F< ppq w i l L ~ ~ su??or+ J ~ this o effort GTnmq an2 Sudqetizq. ‘:ce GSu /-. Fqa . 1 y s ~ZYX ptoC erne r! t 

GZOU-~’;~CAIG) will ziaintzin a data exchange fog -the Services to ,‘. e. 

--- -. 

assist in improworecasti*F i!‘ 4. 

~ 

ae, 

- 

Approved : 

Idea Xeeds Fore Development: 

I Need More Information: Disapproved: - 

\ 

21 

0


DEVELOP AND USE STANDARD 0PETZA':TONAL 

AXD SUPPORT S-iS'?Z:G 

. 

New subsystems and support system are developed that are 

peculiar to specific weapon systens, yet have many percormancc 

features in comon with other systems. Use of standard, offthe-shelf 

subsystems and/or support systems -for some of the lonqvA 

lead time items can reduce development time. 

Recommendation: Identify and develop standard subsystems 

and support systems or their technology {independent of weapon 

systems) to meet projected weapon system needs. Support a 

program of weapon support R&D to put diaqnostic, re?air, azd 

logistic technology on the shelf. 

Advantages: Earlier deployment with lower risk; Snhanced 

supportability. Reduction 

-- 

in operating costs. 

Disadvantaqes: Standard system or technoloqy may nor, be 

best match for the weapon system needs. Reqires increased 

fcAding to implement. Could be overer$zsrzeL. 

Acti.on Required: USERE working witk the SwuDqcs scbmits 

a poposed program for F? 82 and beyond within kknonths.' 

Approved : 

Idea Needs More Develapnent: 

I Need. More Information: 

Disapproved : 

'

Recorrmendatim 22 

Cssign to Cost fDTC) fze awards are made as a result of 

paper analysis. There is little or no tie to actual ccsts in 

poduction. DTC incentive fees and awarrls are payable during 

and at the cotlclusion of Full-Scale De-"*elop>ent. Axard is bas& 

on the forecast& aversge cost for the 2roductLon quantity.' 

Recommendation: Provide appropriate incentives to iiid:istry 

by associating fee awards to actual. costs achieved during the , 

early production runs 

. Advzntagas: Ties axard to "real" a=h;sveneh?t. rakes 3TC 

meanicgful. 

Disadvantaqos : Changes in prcgran, (rates, qutntity , inflaticn, 

etc. 1 cmplicate analysis of. results. Locger time 

betxeen DTC effart and award payment. 

the payment of Dzsign to Cost (DTC) awar

The acquisition prccess has Seen studied many times by r;:ar.y 

orasnizations. Yost nf the recommendations 2zesented. herc hzve Seen 

aade bafore. iic'weverr.. f.5~: n- thace r - ~=ti"n= h;, 7-a beer. irn3le- 

~ -- 

mented. Ccnqress, CXO, 3."4B, CFP?, ic3ustr- OSua-Je cor. tina- 

7 

aus~y criticized the Services for not followizq DOLD SCsi3.L-a.c - 3081 

5CTm:z. x receac [Javy acquisitioc stucq revi5weci tbe 

- 

i-ntacion 

.c,tat;lr 02 Tast acquis2.t:-nr ?-mess stucies azuotncimt 02 SOrecJli;rnm+ 

-. D e nlations. =mu? r'nqcrr ess is qcrcei-red ocmrred 

ir! 29 and almost no procrrsss Is percsived tc. have cccurwn 

L i e 7. 2 

h difficult;. with 

acquisition 2rocess is 

imple-Tentation succeed 

low-up effort to in&= 

holc',. 

in^ lementing recommenda tiocs regardi nc tha 

the great n-;unber of players involve6 to make 

This requires cersis tent, iRtensivE, fol- 

sure that the recoii-men2akionu reaiig 30 taxe 

Tkz aost cormon reason for nm-imglm.mtation is sinply that 

relentless action 311 Lle part of top management is not taken to 

inscre that recoxmen8ations are, inded,. implemented. OSD hss, in 

khe past, fxused a great amonnt of managern&t attenticn on policy 

development acd resol.ucim. However, 0SD has not aonifcred implemritatior! 

of the policies on a program basis. 

Since ?otentiat 2ecisicA= coule lead ta r?.ajor changes LO ths 

process and even tc GOD orcjanizations and their roles, it vi11 be 

zlifficult for the existing Do3 organizations to execute changes 

without high level attention 3y the SecDeZ and, DepSecDei. Eliminaticn 

cf the complexity inhersnt 2n the current process is masked 

unless th3 nany difir'crent types of chnges zre considered LE terns 

of the aqregate adnizistrative and repcrring load generate?!. 

A fu~dsmencal &termination which is require6 for each decision 

is wnether ircpl.ementati3n shcillc! reflect centxalized control unCer 

OSD or decentralization to the Services. %.selected arEas a mifomity 

of action across Services may be Zesird. 

Recommendatioc: Znsure that a deterrdned management traxlates 

approved resomreiidations into implesrkntable Zirection 3.na fixes 

respoesibility ss that managzmant has visibilibj of t5n actions 

taken. 

Advaataqes: This olan will not succeed without a wtll ?lannad, 

intensive, high visibility, 

out this effort, this report 

Diszdvvantages: Implmentation will require 8 priority arid 

time comitnent from all levels of manaqe,nent ranging iron: tile 

SecDef to the Prr3grml Nclaxzager for a nmber of pears. 

b. USD2:E 'i.F'L1 Z S S ~ ~ Z ?rim@ ~?S?ORZ~~FI~':- .. 

-. 

fer action on every reco.,m.mriation an6 &eci;ion in this rc7aoi't. -- -.A 

general, these assignnents have bem spccif ied mdcr thci ".Actior. 

Xeq u i red " sections; however, in certain cases. spx5Eic ilction responsibilities 

will tit defined ill the inncdiGtc futt;rc. 

25

c. USDRE should consider utilizing a working 

group containing OSD and Service regresentatives to assist ir? Implementation. 

d. USDRE should consider utilizing a nmber 

of creative techniques to translate the intent of these recomendations 

to all levels. This could include formal training sessions, 

conferences, video taged training films, articles, and policy letters. 

e. Both the SecDef and the DepSecDef must 

maintain a personal interest in ensuring that the changes are implemented, 

that there is continuous action to improve the acquisition 4 

process, that periodic reviews take place, and that all Services and 

OSD staff be made aware of the SecDef priority interest on this 

subject. 

ApFrOVed : 

Idea ?keds More D.evelopment: 

Need ?lore Information: 

Disapproved: 

* 26

This section prcs.xts for decisicn the major issues rdentifie3 

in the Eefense Systems XcTXisition qeview. 

-- 

i?. Issue: ??HAT S:i07LD BE Y E 3ECDSF (DSARCI DEZIS 10'1 3iLI;STONES? 

The currect process 2rovides four discrete SecDcf decision 

points. X I of the alternatives discussed belaw retain tile 

2urrer.t "milestone" process structure. However, all alterriatives 

Githcsr de-mphasize or reduce the nunber of formal C3D 

level silestone reviews an9 SecDef decisions. Under some 

alternatives certain milestone rzviews are delegated to tnc 

Service Secretaries. The Secretary of Defense do,cision avthority 

and acqulsikion Folicy responsibilities are inaintainee axd 

exercise3 thrcugh the PPBS process Ezr,d/or by icvokLng exalicit 

disapproval of 2roposed Service Froqram acquisiticn decisions 

at any stage in the cycle. There are four alternatives shown 

schematiczlly or: page . 

Alternztive One (?age D-11) reduces the current four discrett 

SecDef decisior! rnilestones to three (with flextbiliry for only . 

two) by altering eilestone Zero. 

A~~IGUCJ~ Xilestoze i is retained, a SecDef decisicn vioa1.l gei1- 

eraiky be necessary oniy when a program requires a sionifican= 

proto2ype (Advanced Development) shase. When hel2, Xilestone I 

documentation weald be reduced. 

Yilestcne Ii and :I1 reviews weald coztinuc to be ccn%cted bv 

the Service Level sxcept und.?r tnusual circmstances. 

- Pro: F.'.educed administrative burden, 

Inczeasec! flsxibility 

- Initial development arqrzrn reviews and 

decisions are speeded. 

- Con: - !l.iay be perceived as a lessining of SecDef 

control. 

.Alternativt Twc !?age D-16) reduces -:he 

DSARC reviews to Xilestcnes I1 and 123. 

4 

number of fcrinal SecDef 

MFlestonz 0 would. 5e reviewed by OS3 during FPBS as in 

Alternztive One above. 

tlilestone I woult 5e deleqatee to the Sertict Secretaries. 

S2cDe.E auchcrity and o?-ersiqht is naintaincd ZhD1i??+ notific6.- 

tio;: cf Service 2ccisior.a with t?~t0/3isip~?-o~al au:F.arity if 

necessary. 

27

~~ 

Milestcnes 11 2nd I11 receive a full DSRBC review and DSARS anproval. 

- Prc: - F-irther delegation of proqram responsibility 27.6. 

reduction iii adminis tzzt i-Je burden - 

- Front-en6. Srocess is speaded as in Alternative Gne. 

- Con: - Pilrthr-r reduction in SecDef ccntrol over zcquisition 

of major programs as front-end; may restrict 

SecDer' abiiity to redirect due to prqlpzn momenturn. 

- Mzy net be considerea proper izqlenxintation of 8 

A-109 with regard to Milestone I (-9-109 req:izes 

SecDef to retain decision authority at the four 

Milestone Decisions). 

Alternstive -- 'J'bree !P~gs D-19) reduces tha SecDef dacision milestonss 

to two, bct ensures full SecDef involmaert ir, maj0.r prograq 

initiation, and iaproved grogram defi2ition for proqrar, Go-ahead. 

The first decisim Faint, "Requirements VaLidatlzn: (equivalent 

to coKbinatlon of Zero and One), serves 3s a full DSAXC/SecCe? 

review 2nd approve1 of major program initiation including threat, 

weapow concept, ~isk and schedile, readiness, a& affcrdalility 

qoals. At, t5s Faint a soecific "not-eo-e:cceed" dcllar threskold 

is established whick s ~ t s the funding to carry tts ar3gra.r. ckrzus',: 

Concept Validation ami early Full-scale Oe7relopmat activity to 

i k..Ic ." sccor,ci Cccieix goizt, "Fuii-Scals &:-sloqm.~% .iz2 Fy,:

~lternative Four (Page D-24 1 eliricates all SecDef decision 

milestones and delegates total ~rcgran review ressonzibility - 

to the Service Secretaries. Tht: XiAX could be invok.?< at 

SecDef discretion but generally -2% SecDef would exereis2 control 

and decision authority on 2 cy-exzeptior, vetc/disa??roval 

basis. Milestone Zero would be ?cnZucteft khroug;? the 23.w 

process as described earlier. 

- Pro: - This alternative Toes the furtnest toward 

decentralizatioc and reduction ir; administrative 

burden. 

- Con: - SecDef direct cxtral of major acquisitions 

substantially re3gced. Perceived vioiation 

the intent of A-139 as regards ageccy head 

responsibility. 

Actim: L'SDRE revise DoD Direcr:*ies 5000.1/2 apFrapriate to 

alternative selected. 

Decision: 

is 

02 

Current : (Four 

Alternative 1 : 

Alteroative 2 : 

Alternative 3: 

Alternativs 4: 

SecDef IYilestar,e Decisions) 

(Three SecDsf :Irlestone Sr.zisicnsi 

(Two SecDef ri!l'estone Decisions) 46.2 

(Zero SecDef Xiiestoile Decisimc) 

-. 

. .. 

.%--- 

-- 

.

. . . 

-- 

Prob.’Lem: Thz Hission Element Need Statemerit (XEXS) is an 

iiarernal DoD docunent used to support the Sec3ef decision at 

Milestone 0. The NEXS is required by COD i=?lernentation of 

CMB Circular A-109 (1976) requirm,ents to state needs i,? terms 

cf mission and that S~cGef shculd Zertif;. the need. The EXS 

wx tc be 5 Fages or less. In practice staffin2 has increa.;ei 

trd detzilec justification information ofter, reqcested by OSD 

has contributed directly to perceptions of growth in thz 

“fr3nf end” of the acquisition cycle; There are 30 MENS 

currently approved. 

Aiternative One wculd require submission or’ the MXiS (ZFlor-ceRed 

or as currefitly required) no later than with the Service POM 

thus linking the acquisition and PPRS process. SecDef approval 

of bZNS would be 3y accepting POM iz the absence 04 sgecific 

disapproval. 

- Pro: - 

- Con: - 

Consistent with reduced SecEei revi+w options- 

Batter integration of acquisition and 2PBS 

Frocesses 2s “ E ~ W starts“ woulc! be reviews6 

in the context +3f tke full ServLce/GoD bcdqet 

fxzclatioll process. 

SecDef decision authori ty retail?&, but 

extrsised by exception in the budget przccss. 

Some rediidtiion in SecDef visibility and 

infl;ier~Ce over preiiininary program slnr,s. 

Alternative Tti;ro would elkinate ?ENS docunent entirely; 

Corqressional Descriptive Sminary (atld other POX documentstior, 

already reqtrired) would documect Milestone 0. 

- Pro: - Reduced papemork, simplifie2 program 

dccunentation. 

- Con: - XZNS has been given considerabl2 visibility 

in OFTP, OMB, and GAO, could be vie~ed as 

circumvention of A-109 though NENS not 

specifically required by A-109. 

Action Required: USDRE revise DoD Directive jOOO.I/DoD 

Instruction 5000.2 ap?rcpriate for alternative selxtea. 

Cecision: 

30

C. Issue: SHOUL3 DSAX YYEM3ERSHEP EE RZVISED? 

problem: Service Secretaries have staktory resconsibility for 

the executicn 02 contractual md financiil resporsibilitiis fortheir 

3eparCa2-nts, yet th?~ 

arE not voting rnembe:.-s of the DSAF.C. 

Service Chiefs also have no vote althoilgh they will be rasponsible 

for do,veloping and operating the systems mideer considerztron. 

C 

Alternative One would maintain current membership. (USDHE, 

Chairman; USDP; ASD (C); AS13 (W-&L) i ASD (?A&E) ..; (:k.;aiLman, JCS: 

plus others in special cases). 

- Pro: - Retains DSAX as a SecGef staff &visar:T .=our.zil. 

- Con: - Could place the DSXRC is a Fgsitioa of reconmer.ding 

a position that is contradictory to that of 

the Service line execztlve responsible to tile 

SecDef without explicitly reflectirng the Service 

position. 

Aicernstiy,-e Two wall16 include the qpro2riate Service Secrccary 

or Ssrvice Chief as 5ull me-nbers 05 3SA3C. 

- Pro: - Provide SccUef with a broader a6viser.i co-~zcil. 

- Reduces adversary .natuza of carrent; p;~cedu~e. 

- Con: - Reduce the independence of the DSARC 2s OSD 

adviser to Secflef. 

- Increases the size of :he DS2.;XC. 

Aezicr, RequireC: 

required, 

Decision: 

USDRE revision of DoD Instruction 5OCO.i 

I Need 

A1 tesna tive L 

--7 

Alternativs 2 

More Informa=irsn 

3i

the acqsisitix of defense systems an& e

Z. -- Issue: WHAT SHOUL3 33 THE CP.ITZRION FOP, S'r'STEXS RE'JTLKED 3Y 

DS AEC? 

Problem: Currmtly, there are over 50 nafor nrograas designaCEtcf 

for DSARC review. Xltnoccjh dollar thresh9lCs (currer:tl;r Sl.CG>' 

WT&E cr $59!?I.I procurmegt in FY 1920 $1 are "7ui2eiinesf" t.?iSy 

are generally the rule of thumb used to select major ?ro-qre~.ns. 

Ma j or program desigcation is derived 3y s'ib j ective 3 udcp~r:t 5ase2 

upon joint Szrvice participation, estimate3 fundincj, r.x.Fs*j;er aise 

snpport reqLirenents, risk, politics, and Dther Secrztary of 

Defense in tereszs . 

AlternEtive One waul3 continue presext system. 

- Pro: - The current system allows flexibility in 

designation, and 2oes not f3rca uxcoctentious 

2rogram to become majcr strictly because ~f 

large investment. 

- Ccn: - The Iirqaly subjective cri'teria causes uncertainty, 

and may be susce9tibl.e to ar, 

3rbitrary designation. 

Alternative Tvo increases dollar guideiines 'fcr rnajclr syst-ern 

designztion to $20 0.". ?.DTtE and S1B procuremn t ir, F? 80 f . 3 

- ?TO: - The numkez 32 Service 39AXCs ant! 3S.%,C ~XLI~ -_ -' 

be redaced a-?roxLzately 252 while still 

insirlncj revim r of tko ziost expensive nij or 

sy3ter;ls. 

- Uncertzinty and the opportanity for arbitrary, 

unnecessary 2esignation ars reduced. 

- Con: - &&xes crszbsr or' major system of sigriifi=srt 

in-res trr;er.t cot reviewed at Secr.etar:r of 

Der'enss Level. 

Action Required: USDRE revise DoD Directii-Oe 5020. !./COP 

Instruccion 5000.2 if Alternative TWO is adoptee.. 

t 

. 

Decision : 

T: Xeed 

Alternative I 

Alternative 2 

Mare Infcrmation 3c/- 

33

. . 

F. Issue: 

_I- 

S 

HOL'LD ZECIS ION 33 I ?!TI:C-rlXTE i! ? 

--- Problo!.;: It has been the perceptioIr tkat a 3SAX cndor3ement 

and sa5squent Szci3ef approval comm.ts the SecZef/Ssrvice to 

fund tne progra3 as a;?grovcd. This has led to confusion as ta 

proqrm status an2 stability. The DSAX pracess reviens single 

programs at significant milestones to detsmine rl-adlness to 

prceecd to the next phase. 1" is rot feasible in that Coiltext 

to assess the financing of a major program vis a vis o;her 

Defsnse requirements. In coptrasc, the PPSS addresses ai!, 

progrms within a resource al. location f rmework iqi thout an 

in-dzpih review of technical issuzs ar?d 2rogram strxttrre. 

TF,is "disconnect," the lack r3f explicit r@sca,-ce cordtaer,t 

(including supcrt end >anpower) resu1tir.g frcn a aueerssf 11 

DSARC review acd subsequent SecDef approval, is frequently cite< 

as a flaw ifi the acquisition Frocess. . 

- Con: - Fosters praqrzm instabilities +ken CSAX progran 

is not sup2orted in PPBS cycle. 

- I!ay void ccntract with industr:,. 

at 

- Pro: - This would lead to DSARC ensorsement af fiscally 

executable ?rograns and fssters ?rocran; 

stability tnraugh resource cornmitxeut. 

- Con: - Funding constraints may be set without reqard to 

technical issues. 

Al2smative Three has the DRB assume the funztions of the CSARC. 

This 31so nakes DepSecCef the Acquisitix ExecuC,i-)E. 

. 

t 

- Pzo: - Decisions made by sincle hoc?:: RO -1eed to 

revisit in mother 

- 

farm. 

. . . 

- :3rqe~ a closer linkqc bctvesn the ZC~~:-SS:LX. 

?roccss and the I'P53. 

34

, '. . 

i,ction Reqiiird : ?Iternati-re 2--DAE mlorcz currezt QoD 

Directive 50CG.1 afford33ilir:r ?olicy a d GSDP.E ret-is2 500g.1 

to strengthen policy and elimixste confasio::. 

Alternativ? 3--USDRE revise Do3 3ii-~ctive 

SOOO.i/CoD Instruction 5000. L 50 reflect chanqss in :ole and 

membership of DRB. 

Decislcn : 

Alternative 1 

Alternative 2 

Alternative 3 

I Need More Information 

4 

9 

35

. '. 

.. I 

Problem: Three Troqrazzting and budgetinq ?roblems are ~'.LsL~centives 

for proqram manaqers to provide system support azd 

readiness. 

1. Support program and budget requirements are base2 or: 

experience related measures (unrelate2 to readiness) instead. 

of a system's support requirements and readiness factors. 

2. Budget review by appropriation categories. The fielding 

of a weapons system involves several approFriations: ?&2, 

procurenent, military construction, operation and mainteaacce 

and miiitary personnel. ?lornalLy budget decisions in thesz 

accounts occur without visibility of :?e iF-,act 03 in?iy:i5~~L 

system's support or readhess. 

3. Budget execution. Some weaFon su??ort. tunes (spares, 

training, depot) are controlled by Service activities not 

responsible to the proqram manager. SornetLnes prioritlcs 23 

not match the Froirrarr! %nager's a32 furies are ciivertecf 50 Z'1~r.t 

ctk-er resuirmenz; . 

The Program blanaqer ma:/ not know cf or ?arzici?ate i?. ??39 

decisions which impact on his system'5 su?por';. Snze ?eclsiz::s 

are made on his system's support, they may be altere@. 'cy another 

activity during Su2qet: execution. This is. particularlycritical 

early in ?SEE as well as durlq t?:z '.-:a?.sition 53 ~roduction 

whez larqc initial support resozrces are 5ner.t. .:.Z S Z ~ 

given time, there woulc2 be an estizate.5 13-2C *..;o3TQns =:I 

invcrlvec! in tkansitioc. Procurement 3' snares w5:h C~!:~Z:Z=S 

separate from the system ?ro2ucticr. c2r:tract i-c~eases .=;:.??s 

costs . 

OPTIONS: Alternatives 2 and 3 below waul? anply to selectsf. 

weapon systems, t':?ose 2earing production or in early proC:c=icr. 

(15-20 systems). A two year trial is reco'mmendec! for the 

selected alternative. 

Alternttive One would continue present nanagernent .systeE (lse 

traditional/experience related measures to review systen? sLxort 

Trogran and buc?qet requirements; review buzget by a??roprlzticca 

tegoriss . 

m 

1) 

e

. I 

- 

Gives mcra PP3S visibility of the combine-l effects of major 

su?port decisions on readiness objertives. 

Removes ??BS disincentives by reducing independent budget/ 

PPRS decisions wit5out visibility of effezt on program as .a 

whole. 

Would move in the 

decision process . 

- 

Con : 

direction of a more mission oriented Sudget 

C~VFZZ the Progrsrr. ?!anager a voice (or coordinatim) in najor 

;*~?.=crt .- resource dscisions .. .,.. for his 2rograr;: wculd Lrny?rc-:e responsi3ility: 

- 

Con : 

X moderate ste? requires procedzriil cnanqes and nay or nay not 

De effective. ?lore direct control of many r-Qscmrc=s would unjalancc 

the overall use of logistic recolirces by tha Service. 

-- 

Action 9equired: ASD I YRi\&L) letter to Services statim objcctivzs 

to jive xore incentivpe i-q ?%. ASDmiGrkTwQuId work ~ it5 €3-C 

Services to define and ey;aluat molen&er.ting options. Initisl 

lecter con be prepared vithin 43d;ys. 

L,* 

Decision : Alternative l - 

Alternative 2 

z= 

Alternative 3 

T \!eed ?:ore Izforrratio.i 

37

For those systems whizh are run on a fest track. there are req-JJire::-onts 

for edditicnsl early funeir.7 :o ?es-$:: i: rtliahility 

af..;, suspor", chzraztezistics - izc1udir.G the ne& say 

. - 

%la 

.. 

price :a parallel 3r cmzgetinq develo5-er.ts. .~-cc:z*-azzL Lr.-house 

talent zest be brought to beer, aEci icciastry ,lzcsntiues zcsi to 

be applied to evoic pceviously'zxperienced su~ssrt przklez.,s.

, -. . 

- Coa: - W i l l require ::ore up-frant fun& Xi11 be 

viewed by somc: as addressing susport too early. 

- AdCiticnal re:.ponsi5rlity for FM (but the 

clear aec,.sions may be helpful). 

R1Lernac;vc 'Iszro shifts r!:.jre uf the focus to i.ixm.1 rcliLtbilit-y 

and support pr3blers expzrienced in fieldin5 tne systerr. by 

subsequect redesiGn of production ?.areware s?d incorgcration of 

fixes. 2ely r,ore dn interim coritractor support while FrcLl.ens 

are being fixed. 

- Pro: - Easier to do. 

- Leaves gmgrarn nanager fzeer to rnske the 

trade-off:.; wi",hout SerJizz involvenent. 

- Con: - Xequires 2ore funds to fix later. Yiztorically 

difficult to get f;;icds fsr najor fixes. Less 

1ikelificc.i of avoidinq scgport pr0tler.s. 

- Congress vili zriticioe the eerly f ielciing 

problems. 

Action 'equired (If Alternatiyre @ne is sdected) : 'JSERL issue 

guidance adding early assesszont of suppcxt optiocs to t.he 

Alte-mative 1 

. Alternative 2 

I Xeed ?';.re InZorxetion 

. ?L'. 

39

Compeciticn carr 5e obtalnzd only Cy maticulous planing and by rha support 

of n,zntgerert at sll levels. It involves all functional discipiizes associaEe~ 

uii;h rhe acquisition process -- not just the ?rocuieiistt or ContraiciTg fznccfarz. 

Speclsl tbchiques fcr enhaicing cOz?etitioR have bee= c'fvelo;cc! far differen% 

ccxa3ditiFs and bervices. So=e rcguiro, additimsl early funding to :c\itve 

sigziir'fcant savings in later phases. Trchnicai c d2sig2 cc.r>eti:ion :.E? 

su;erce

DeceLlber 26 1979 

NUMBER 5dM!*3 

Department crf Defense Direztiw 

SUBJECT: Test aad Evaluaticn 

Referenre: (a) DoD Directive 5000.3, "Test and Evaluation," 

April 11, 1978 (hereby canceled) 

(b) Dol) Direc+-ive 5000.1, "Major System Acquisitions," 

Jan-ury 18, 1477 

(c) DoD Directive 5000.2, "Major System Aequisition 

Process," January 18, 1977 

(d) noD Dircc-ii-re 3200.11 "Use, Management and 

Operation of Departnent of Defense Xajor 

Ranges and Test Facilities,'' June 18, 1914 

(e) DoD Directive 5000.19, "Policies for the Management 

arid Co--ltrtl of Information Requirements," 

March 12, 1376 

A. RF,ISSTJA;:CE MD PURPOSE 

This Directive reissues tcfercace (a) and establishes policy 

for-the conduct of tesz and evaluation in the acquisition 02 

defeme systms; designates the Dizector Defense Test arid Eualuation 

(D3TE) as hav-hg averall responsibility for test and .?valustioa 

mitters witen the Bepartmant of Defense; defines rsspnsibilities 

of the a9TE, organizatim of the Joint Chiefs of Sraff 

(OJCS) aid DcD Components; and provides guidance for the preparation 

and submission of Test and Evaluation Master Plans. 

8. AFPLICABItITY AND SCOPE 

1. The provisions of this Directive ap?ly to the Miilitarf 

Departments 2nd the Defense Agencies (ixereafter referred to as 

"DoD Components"), the Office of the Secretary of Cefense (OSD), 

the OJCS, and the Unified and Specificd Comands. As used herein, 

'ihz term "Militsry Services" refers LO tCc Army, Navy, Air Force, 

and Marine Carps. 

2. These Trovisions encompass major defense system acquisiti03 

programs, a; designated by thg Secretary of Defense uder 

DOT) Directive 5090.1 (reference (b)) , and agly to all Don Components 

that are respons2bie for such programs. In addition, the 

management of tpstem programs not designated as Eajor system 

acquisitioss shall be guided by the principles set forth in this 

Direczive.

C. DEFINITIONS 

Terms used in this ?hr=ctive are defined in enclosure 1. 

1. General 

a. Test a& maluatian {TSE) shall begin as early os possible 

and be conducted tbmughw;it the system acquisition yoceos ta assess 

and reduce acquisitbm risks a d to estimate thz operatioza; Effectiveness 

and operationad suitability sf the system being developed. Hea&g= 

ful critical issues,, test objectioet, and evaluation criteria relLted to 

the satisfaction of mission Geed shall be estrtblishcc! befora tzsrs 

begin. 

b. SuccessES accuqlishment of T&E objectives will be a key 

requirement for dcc;lLsiuns to c odt significant additional rzsources to 

a program or to advsscr it from one acquisition phase tc another. 

Acquisition schedules, financial plans, and contractual atrangemeats 

shall be based on this principle. .; 

c. Dependence an subjective judgment concerning system petformance 

shall be &x&nized during teszing. To the excent permitxed by 

resource coastrahts ani the sed for realistic test enviroamcnts , 

appropriate test irPst==tatica wiil be used to provide quantitative 

data for system waltuatima, 

2. Development Trst and Evaluatim (DTSiE]. DT&E is that T?S - 

conducted to assisf ctc engineering dosign and development process and 

to verify attai~enc 05 ze&cal performance specifications and objectives. 

DT&E is normally accomplished or marraged by the DoD Cbqoneikt's 

materiel development agency. It izlrldes T€S of components, subsystems, 

hardwase/saft=are integratioa, related software, acd prototFe 

or full-scale engimerirrg development models of the systcm.' T&E of 

compatibili- and hteroperability wi'A existing or planned equipmegt 

and systems are also included, 

. a. During rho spstem acquisition phase bkfsre tbe decision 

Hilestone I, DTSZ shall be accomplished, when ap?rapriate, to assist in 

selecting preferred alternative system coacepts. 

b. Before the Hilestone I1 decision, adequate DTSE shall be 

accomplished to ideatify the preferred technical approach, irduding 

the identification of technical risks and feasible solutions. 

c. Before the Milestone 111 decision, adequate DT&E shall be 

accomplished to ennte that engineering is reazorably complete 

(including survivability/ vulnerability, com~atibility, tranrportability, 

interoperability, reliability, maintainability, safety, human 

'-% 

2 i 

W'

De= 26, 79 

5QC9.1. 

factclrs, and logistic suFportability) , that a11 sigaificast design 

problems have teer- identified, and thzt ;elutions to these prqhlams txe 

in hlzd. 

d. After the Milestone 111 decision, DTSrE shall t.9 an iategzal 

part of the development, acceptance, and intrcducrion of svstzv changes 

to isprove the systen, react to new threats, and reduce lifr cyclz 

costs. 

e. For systems that interface with eqiipment of anofhez DOT) 

Component or that may be acquired hy more than one DoD Conpoueae: 

multiservtcc DTa may be required. Su& testing shall izclude appropriate 

parficipazion and support by all affectcd DoD Compcneits. 

f. The CDD Cotqoncnt's developing agency &ail structure 

acquisition programs, take infomacion available, an3 arrange far the 

DoD Ccioponent' s independent operational test and evaluatioa fOTSE:! 

agency's participation in development testing, as appropriate: to 

support OTErE ob j ecrives , 

3. Operational Test and Evaluation (OT&E). OT&E is that T&Z 

conducted t3 estimate o systenr's operational effectiveness and operational 

suitability, identify needed mt.d.ficatiocs. and pxovide idfor 

matim on tactics, doctrine, organizatiun, aad persoanel requiremsnts. 

Acqvfisition programs shall be structured so that OTa begins as eariy 

as possible in the development cycle. Initial opezationai test and 

evaluztioa (TOT%) musr be accompiished 9rior to the Hilestonc I11 

decisicn. 

a. In each Do3 Componeut there shall be one msjm fiela agmcy, 

separate and distinct from the mzterfel developinq/procuring agezcy and 

from tire using ag-ncy, responsible for mataging operational testing an6 

for rzporting tes: resclts and its iadeyendent evaluation of the systrm 

undez test directly to the Military Service Chief oi' Defense Agency 

Dirccfot . 

b. iJTa shall be accomplished in an envirommt as qcrztionally 

realistic as possible. ryFicaf operaLional and 3uyporr prsanne1 

will be used to obtzin a valid cstimzte of the users' capability to 

opezate and maiatrin the syszez when deployed uder both peacetime and 

wartime conditioas. 

c. nuriog the system acquisitFon phase before the diiestone 1 

decision OTSrE will be accomplished, as approgriate, tJ assess the 

operational --act. of candidate technical approaches azd to assist in 

selecring preferred alternative system CoIicepts. 

(/'- 

d. 3efore the Milesrone 11 decision OTE will be accoap;ishei, 

as necesszry, to examine the operational aspects of the se:.ected altema- 

Live technical approaches and estimate the potential qperational effectiveness 

and suitability of candidate systems. Decisions made ar MiliEtoae 

3

Ii to commit firtds far ptoductioa long lead iceas or limfted prcducriou 

mst be supported b~ OT&E results. 

e. Before the Eilestone I11 decision, adequate OT&E shall be 

accomplished to pzovide a valid estimate of the sjstcm's operational 

effeztiveness a d suitability. The ieems tested must be sulficientlg 

representstive of the expected pzoduction items to ensl;rc that a valid 

assessment can be ma& of the system expected to be produced. 

i 

f. After the Milestone 1x1 decision duriag init;al production 

and deplopent of the system, the DoD Coqonent's OT&E agency will 

manzge follow-ou O'XE (FOTS), as necessary, to ensure that t.he initiai 

prodcction ileias Iceet operational effectiveness aud suitability thresholds 

and to evaPuata system, manpower, and logistic changes to meet 

matitre system rezdiness and performance goals. 

g. whgn systems have a9 interface with equipmen: of arother 

DoD Coqonent 31: m y be acquired by more than oce POD Coaqone3t;, 

multisertice OT&E shll be accomplished. Euch testing shall inclade 

participation and support by all affected DoD Cowpcnents. An irdepeadect 

evaluation shall be submitted by the OTU agency of each participating 

DoD Component. 

h. Throughout the system acquisition process, the DcD Conponent's 

OTslE agency shall: 

(1) Ensue that OTSE is effectiveiy ?lamed and 2c:o~pllshed 

during all acquisition phases. 

(2) Participate in initial system axpisition ylanni3g and 

tese design to ensure adequacy of the pknncd schedules, testing, and 

rescurces to meet OT&Z objectives an6 to asccrtain which portions of 

DT&E can contrihtc to the accomplishment of @TEE objectives. 

(3) Monitor, particioate in as zp;xopriate, and zeview the 

results ob DT&E to obtain information applicable tc OTU, objectives~. 

(4) Ensure that the operaticnal testing aad applicable 

development testing, and data collected, are sufficient ond credible to 

support Its analysis and evaluation needs. 

(5) Frcv5de an independent evaluation of OTG results it 

kny decision milestones. The Milestone I11 e\aluacion shall inclcde 

recommendations regarding the system's readiness for cperatiansl use. 

(6) Brf-ng directly to tke attes9ion of its YiliLary Service 

Chief, or Defense Agency Director, issues which impact adversely 

upon the accoqlisfrment of adeq-late OTS. 

4. Cmbirriup, Developaiect aod Operational Tesring. Planning fcr 

DT&E andTL&E shall be coordinated at the trs: design stages so that 

4

i 

... 

Dee 26, 79 

5000.3 

each test phase uses resources efficiently to yield the data necessary 

to satisfy common needs of the materiel developing agency and the OT&E 

agency. Development and operational tests may be combined when clearly 

identified and significant cost and time benefits will result, provided 

that the necessary resources, test conditions, and test data required by 

both the developing agency and the OTSLE agency can be obtained. Participation 

by the OT&E agency in the planning and execution of tests 

must be sufficient to ensure that the testing conducted and data collected 

are sufficient and credible to meet the OTSLE agency's requirements. 

When a combined testing program is chosen, it will normally include 

dedicated operational test events, and the final period of testing prior 

to the Milestone I11 decision will emphasize appropriate separate operational 

testing managed by the DoD Component's OT&E agency. In all cases, 

the OT&E agency shall provide a separate and independent evaluation of 

the test results. 

' 

5. T&E for Major Ships of a Class. The long design, engineering, 

and construction period of a major ship will normally preclude completion 

of the lead ship and accomplishment of tests thereon prior to the 

decision to proceed with follow-on ships. In lieu thereof, successive 

phases of DT&E and OT&E shall be accomplished as early as feasible at 

land-based or sea-based test installations and on the lead ship to 

reduce risk and micimize the need for modification to follow-on ships. 

I a. When combat'system complexity warrants, there shall be one 

\L OP more combat system test installations constructed where the weapon, 

S~RSOP, and information processing subsystems are integrated in the 

manner expected in the ship class. These test installations may be 

land-based, sea-based, or both, depending on test requirements. Adequate 

DT&E and OT&E gf these integrated subsystems shall be accomplished 

prior to the first major production decision on combat systems. To the 

degree feasible, first generation subsystems shall be approved for 

Service use prior to the initiation of integrated operational testing. 

When subsystems cannot be Service-approved before this integrated operational 

testing, their operational suitability and effectiveness shall be 

examined at the test installation as early as possible in the acquisition 

cycle. 

b. For new ship types that incorporate major technological 

advances in hull or nonnuclear propulsion design, a prototype incorporating 

these advances shall be employed. If the major tedhnological 

advances affect only certain features of the hull or nonnuclear propulsion 

design, the test installation need incorporate only those 

features. Adequate T&E on such prototypes shall be completed before 

the first major production decision on follow-on ships. 

f 

c. The prototyping of Navy nuclear propulsion plants will be 

accomplished in accordance with the methods in use by the Department of 

Energy (DOE). 

5

d. For all new ship classes, continuing phases of GT&E 3n *e 

lead ship shdl be conducted at sea as early in the acquisition pzcc~ss 

zs possible for specified system or equipment and, if zeqbired, for 

the fU;l ship to the degrte feasible. 

i 

e. A descripticn of the subsystems to be inclvded in any ixst 

instailation or test prot.Jtyprl, the schedules to accomplish TFZ, a d 

zny exceptions to the zbcve aolicies shall be provided ic tho initiai 

and any sgbsequeot milestone decision documentation for approval by the 

Secretary of Defense, 

6. Test and Evaluation of Computer Software. The provisions ob 

chis Directive apply to the software components of deferzse systems .is 

well as to hardware components. 

a. Quantitative and demonstrable performhnce objectives and 

evaluation criteria shall be established for computer saftwar5 durhg 

each s-istern acquisition phase. Testing shall Le stmcrurcd to dmonstrate 

that softw3rc has reached a level of maturity appropriate to 

each phase. Such performance cbjectives and evaluation criteria shall 

be established for both 3ull-system and casualty mode operzticns. For 

-bedzed software, pexformance objectives and avzlution criteria shall 

be included in the performance objectives znd evakition crLteria of 

the overall system. 

b. Decisions to proceed from one ghase of software drvelo?a;gnt 

to the next will be base3 on cuantit&ivc denonstration of adequate 

software performance through qyropriate TZ. 

s 

c. Before releare for operational use, software developed for 

either new cr existing systems shall undergo sufficient operationzl 

testkg cs part of the total system to provide a Tralid estimate of 

system effectiveness and suitability in the operational environmenc, 

Sach tsting shall include ccmbined hardwarc/soffware an4 Lnterfzce 

testing undez realistic conditions, using %mica1 oFerac,or personnel. 

The eraluation of test results shall include an assessment of operational 

prrfcrmance under other possible condihiors which were not; 

employed, but which could occur during 0peratio;lal use. 

d. The OTW agencies shall participate ir, the ezrly stages of 

software planning and developnmt to ensure that adequate consideration 

is given to the system's operational ;1se and environment, and early 

development of operations1 test objectives and cvaluatice criteriz. 

7. TsE for he-OS-a-Kind Systems. Some programs, particulatiy 

space, lxge-scale communications, and electronic system programs, 

involve procurement of a few items over a3 extended period. For these 

pragramsI the priaciplss cf DTSE of components, sabsystems, and prototype 

or first productiot models of the system shall be tpplied. 

Compatibility and intersperability with existing ar planned eqiipmeut 

shall be tested during DTSE and STSE. OT&E shall be zccom?lished prior 

to the production decifioE or initial acceptance c.f the system to 

6

Dec 26, 79 

50OO .3 

pro-ride a valid estimate of ope-ationa:. rffectivetess a d cperatimal 

suitability. Substquent OTSE lea:' be conducted to refiae estimates an.? 

easure deficiencies are corrected. 

8. Praduction Acceptance Test and Evaluatiog -- (PATS). PAT= is 

TSE of production items to demmstrzts that procxred items fuLfill &e 

requirements aad specifications cf the procurin3 conixatt or agreemeats. 

Each DoD Component is responsible for accomplishing PATZ. 

9. T&E ?laster Plan (TEMP). The DoD Component shall prepare aad 

submit, before ailestone I and each subsequent decision milestone, R 

TZZ for OSD approval. "his bzoad plan shall relate %est objectives to 

required system characteristics and critical issues, and integrate 

oojectives, responsibilities, resaurccs: and schedules for all K.X to 

be accomplished. Guidelines for preparition and submission of the TEIl 

are at enclosure 2. 

13. Changes to TEMPS. The DaD Compcnent shall ensure that anv 

significant chrnges made in the tost program after apprcval tre reported 

promptly to the DOTEi, with the reason for change. 

4 '. 

11. Acquisition Milestone Decisions. The DDTE provides TSLE assessmeats 

to supFort system acquisLti3n milestoac decisions. The DoD 

Components shall, in additlon tc providing the information specified ia 

DoD Directive 5000.2 (reference (:)) aaa TEMPS In accordance witii 

enclosure 2, provide the iollowin5 addLtiona1 information ta the DXE 

for use ic making TU assessments When testing has been accmqAished, 

appropritte test reports shall b2 provrded as early as possiblz prior 

to milestone decisioa points. 0:her available supportiiq info.zmatian 

5ncludin.g system operational concepts, how tests were azcomplisheti, 2nd 

test limitatiocs shail be provided upot request of &he 3DE. 

In addition, 

the DoD Component shall iniozm the DDTE of significant progress 

toward, or prcrblems with, meeting significant test objectSves during 

the conduct of test progi-ams. 

12. Joint 'i'z (JTFZ) Progran. When required and as initiated by 

the DDTF,,JT&E will be coiaucted. In addition to exanining ctpability 

of develapmental and deployed systas to perform their intended 

masion, JTXs may alxo be conducted to provide iofomation for teckica1 

concepts evaluatim, system requirements, systea improvelrents, 

systems ioteroperability, force structure planning, developing or improving 

testing methodologies, and obtaining informatFon pertinent to 

doctrite, tactics, and operational procedures for joint operations. 

Tes',ing shall be accomplished in realistic operatiopal cmditions, xhen 

feasible and essential tc the eiralwtion. Responsibility for mzineg~ng 

the practical aspects of each JT&E will be delzgatcd :o a specific COD 

Component, and supported by forces and material froe piarzicipating 

Components. 

c 

13. FarticipatCon by the Joint Chiefs of S:aif (JCS) in JT&E 

Programs. As che ptoponent for joint proctdutes aad interoperability 

.. 

7

of deployed forces, the JCS have a requirement for JTGE results that 

provide information on joint doctrine, tactics, and operational procedures. 

Joint testing objectives will be addressed, when feasible, in 

conjunction with scheduled JCS exercises to minimize resource impact 

and provide economies. When JTsrE and JCS exercises are integrated, the 

JCS will participate, as appropriate, in testing involving joint force 

interoperability to ensure compatibility of exercise and JT&E objectives. 

a. The JCS shall annually coordinate, for submission to the 

DDTE, JT&E nominations by the Joint Staff, the Military Services, and 

the Commanders in Chief (CINC) of the Unified and Specified Commands. 

This does not preclude direct nominations to the DDTE from the Military 

Services or CINCs for JT&E activities that are inappropriate for JCS 

consideration or out of phase with the JCS nominations. 

b. The list of nominations shall be prioritized for each 

fiscal year. To the extent feasible, it shall identify the participating 

Yilitazy Services, identify tests with potential for integration 

with JCS exercises, and recommend a lead Setvice or CINC to conduct the 

I 

JTm. .\ 

c. Control and OSD sponsorship of JT&E will be exercised by 

the DDTE. The DDTE, in coordination with the JCS, will task the selected 

lead Service or, through the JCS, the selected CINC to conduct 

the test, incorporate the test into joint exercises, as appropriate, 

appoint a Joint Test Director, develop the test plans, and provide 

reports, as required. 

. 

d. The Military Services, CINCs (if appropriate), and the 

Joint Staff shall participate in or monitor the JT&E definition and 

test design efforts, and coordinate the results of these before the 

commitment of resources. 

E. WAIVERS 

Waiver of the provisions of this Directive may be granted only by 

the Secretary or' Defense. 

\ 

F. EXCLUSIONS 

Nuclear subsystem TErE governed by joint DoD/DoE agreements are 

excluded from the provisions of this Directive. 

G. RESPONSIBILITIES OF THE DIRECTOR DEFENSE TEST AND EVALUATION 

The Director Defense Test and Evaluation shall: 

I. Review TU policy and procedures applicable to the Department 

of Defense as a whole and recommend changes to the Secretary of 

Defense. 

8 3

3e:: 26, 79 

5000 -3 

2. Cwrtiinate T&E instructions to rhe DOE Components and resolve 

TsrE =nameat problem between Don Comvonents . 

3. nonitor tie T€E planned and conducted by the DoD Compoilekts for 

majer acquisition programs and for other progzais, as nzcessazy, 

4. Emage the consideration and review of EHFs within OSC, and 

reem ad cammen+, on system T&E aspects of DCPs and other docrrnents 

cmnzerned wit3 system acquisition Ta. 

5. For major system acquisition programs, provide to the Defensg 

Ac@sition Executive, the Defense System Acquisftion Review Cauncil 

(DmC), the Worldwide Military Command and Cottrol System Co.mci1, as 

appmpriatt, and the Secretary of Defense an assessmcnt of the adzquacy 

of testing accomplished, an evaluation of test resuits, and an assessment 

of the adequacy of testrng planned for the futurz to support 

system acquisition milestone decisions. 

6. Initiate and sponsor technically and operetioilally orionted 

3TGE with specific delegation to apgropriate COD Comyoncnrs of 311 

practical JTZ aspects. 

7. Fulfill OSD respoasibilities for the Major Range and Test 

Facility Base (MRT3B) in acccrdance wieh Don Directive 3200.11 

(reference (d)) . 

8. Eoaitor, to the extent reqiiired to determine &&e applicability 

of results,to systes acquisitions or modificaticns;%hat T&,: 

a. Directed by che JCS that relztes to the Single Integrated 

Opcratioaal Plan (SIQP) as it affects system tecfiniciil charactezistics. 

b. Conducted prfmarily for development or investigatiod of 

tactics, organization, or doctrinal zor?ceFts that affect system technical 

characteristics. 

9. Review those program elements that relate to DoD Ccapcrnttnt 

independent test zgcncy, test facility, acd test resoarce budgets. 

H. INFOP~TIC!N REQU1R”eMENIS 

The reportizg requirements prescribed by this ilirectivr? are exempt 

from formal approval and control ia accordance with subpazagraph VI1.D. 

of enclosure 3 to DoD Erective 5000.19 (reference (e)). 

9

This Directive is ekfective imedi3tely. Torward tzJo cooiez 05 

implementing dccmeats to the Under Secretary of Uefensc fcr lxesesrch 

asd Engirieerirg yithin 120 days. 

”\ 

I 

Enclosures - 

Deptp Secretary -05 Defense 

2 

1. Definitions 

2. Test and E-72lution Hfaster Plan (TEP) Guidelines 

J 

10 B

Lec 96, 73 

2000.3 {Enci 2) 

CEFIXTIONS 

Accm5&ttan$isic, The chance that some element of an acauisitior? prosam 

pmdrcres aa unintended result with adverse effect on system effecti-, 

saitabiXty, cost, or availability fct depicyment. 

k.ik%ilit;p, Aa~casure of the deqree to which an itan is in an opzrable 

and d t a k L e state at the start of a mission when the mission is 

&l.I.cd for at an uakaown (random) time. 

Combat Sysm Test Tnstallatioa. A collection of subsystosls ioclilding 

map-, s-or, and information processing cquigment, together with 

their btedzces installed, for the purposes of early testing befor? the 

avaf3abil.Z~ of a first production item, at a fixed ot sobiie test 

faahy designed to simulate the essential part: df the prodcction 

ttf?!tE, 

Ctitieal Issaes- Those aspects of a system's capability, either op+rational, 

te-d, or otker, that must be questionsd before a system'& overall 

worth cas 3e estjnzted, and that are of psiuary -5qortance to the dacfsion 

authmri~ 5n~ reaching a decision to allow :he systm to advaacr? into the 

nezt acqaisktia phase. 

Evafuzititm Criteha. Etanciards by which achievement of required operttiad 

ef5ectivmtessr'suitab:lity characteristics, or resoluticn of 

tech5al mr operaeional issues may be judged. At Milestoue I1 and 

bey&, duatisn criteria must iiclude q-JantitatilJe goals (the desired 

valnr] urd w o l d s (the value bayond which the characteristic is 

mesatkfactary), 

Jl%X Prmgranr. Aa OSD prcgram for JT&E, soonsored by tke D??TE, 

n e d to evaluate or provide information on systun Ferfomiance, 

tecbikz1 concepts, system requirements or improveuents , system 

i n t e * e i-, improving or developing testing methodologies, cr for 

force stmcZxxrc planning, doctrine or Frccedures. 

Lopistic Supportability. The degree to which the planned logistics 

[inchding test equipment, spares and repair parts, technical dat;, 

suppolro fac5lities, and training) and maapower aeet systcm zvailability 

and wartuse * usage requirements. 

Long Bead Items- Those components of s system or piece of equipment 

that take the Longest time to procure and, therefore, may require an 

aarFy couxitruetxc of funds in order to meet acqnisitioa schedules. 

I f 

*Te- defined ir: JCS Pub. 1, "Department of liefense Directocy of Xilitdry 

and ksaciated Terms ," are not included except for the term "Vulnerability," 

€or w&i& srrpplesm~tary inform3tion is prwided concprning its specific 

appzicaticn in this Directive. 

r -

Maintainability. The ability of an item to be retained in or restored 

to specified condition when maintenance is performed by personnel 7 

having specified skill levels, using prescribed procedures and resources, 

at each prescribed level of maintenance and repair. 

Multiservice T&E. T&E conducted by two or more DoD Components for 

systems to be acquired by more than one DoD Component, or for a BOD 

Component's systems that have interfaces with equipment of another DoD 

Component. 

Operational Effectiveness. The overall degree of mission accomplishment 

of a system used by representative personnel in the context of the 

organization, doctrine, tactics, threat (including countermeasures and 

nuclear threats) and environment in the planned operational employment 

of the system. 

Operational Suitability. The degree to which a system can be satisfactorily 

placed in field use, with consideration being given availability, 

compatibility, transportability, Gteroperability, reliability, 

wartime usage rates, maintainability, safety, human factors, manpower 

supportability, logistic supportability, and training requirements. 

Pilot Production Item. An item produced from a limited production run 

to demonstrate the capability to mass product the item for operational 

use. 

Pre-Production Prototype. An article in final form employing 

parts, representative of articles to be produced subsequently 

production line. 

standard 

in a 

Realistic Test Environment. The conditions under which the system is 

expected to be operated and maintained, including the natural weather 

and climatic conditions, terrain effects, battlefield disturbances, and 

enemy threat conditions. 

- 

Reliability. The duration or probability of failure-free performance 

under stated conditions. . 

Reliability, Mission. The ability of an item to perform its required 

functions for the duration of a specified mission profile. 

Required Operational Characteristics. System parameters that are primary 

indicators of the system's capability to be employed to perform the 

required mission functions, a'nd to be supported. 

Required Technical Characteristics. System parameters selected as 

primary indicators of achievement of engineering goals. These may not 

be direct measures of, but should always relate to the system's capability 

to perform the required mission functions, and to be supported. 

2 

J

Dac 26, 79 

5000.3 !End i) 

Survivability. The degree to which J syztern is able to avoid or withstand 

a hostile environment ui'lhout suffering an abortive i.mFai,meLt of 

its ability tc accomplish its designated mission. 

Vulnctabilitx. For xeApon syscem acquisition deci.;ions, three cotsideratirns 

arc critical in assessing system vulnezability: ousceptibility--a 

system lisiitation or weakaiess (may not, be exploitatle); accessibilityA--the 

oseoness of a system to exploitation by a ccuntemeasures 

techniciue; afid feesibility-the practicality and probability of an 

adversary exploiting a susceptibility in combat. 

3

~ vsrious 

Dec 26, 73 

5000.3 (Xncl 2) 

TEST AEII) ZVALUATlON MASTER PL4N (TEliP) GTiDELIiES 

A. - SCOPE AHTI APPLICSlBILITY 

?e provisions cf these Giiideliacs encompass major defense systen 

acquFsition programs as designated 5y the Secre,Lary of Defense and 

certain other important programs for which a 'JWfP is specifically reqgested 

5y the DDTZ and apply to all DoD Compooects responsible for 

such prograas. 

B. 

1. The TEllp is the primary docuneat used in the OSD review a d 

decisioa process to assess the adequacy of' the plaared testing and 

evaluation. As such, the TEMP Dust be of sufficfient-scope and ctntcnt 

to eqiain the entire TSE program. 

2. Each TEMP srrbrcitted to OSD shoulr! be a summary document of not 

mere tha 30 pages, detailed oaly to the extent necesbnry t? show &be 

rationale for the kind, asount, and schedules of the tstlag planned. 

It. must, however, relate the TSLE effort clearly to technical risks, 

operatio.la1 issues and concepts, system performance, reliability, 

availability, reaintainability and logistic requirements, ana major 

decision points. It should also explain the relctioaship cf the 

% 

simulations, subsystem tests, iutegrated systea develapmerrt 

tests and initial operatioaal cests which, when analyzed in combination, 

provide confidence in the system's readiness to proceed into tCe 

next acquisition phase or into fully capable service. Re TEMP must 

address the TSE to be nccmpiished in each progrzm phase, with the next 

phase addressed in the PCS~ 

de-il. TEMPS sqporting the production, 

and initial deployment decision must include the T&E pianned to verify 

correction of d%ficiencics, production acceptance testing, and follow-on 

ora. 

3. Pive copies of a draft TEMP will nomaiPy Se submitted to the 

DDTE for OSD revitu and coment conarrtnt with submission of the "For 

Comment'' DCP to the Acquisition Executive prior to the plamed Decision 

ililestme I date. This draft will 3e revised if necessary after review 

by the D3D Conponent Acquisition Executive and srzbmitted for OSD coordination 

at least 15 working days before the DSARC zeetirg (or decision 

mileston2 date if a DSMC meeting is not planned). The TEMP will be 

updated and sxbmittei in accordance wit3 thc?se procedures bcfare ;filestones 

I1 and 111. OSII approval or' the "EB, or redirection, will be 

provided following decision milestozxes. 

C. 

Even TEhP submitted to OSD should ccntain ti:e same kind of information, 

and the foLlowing format should be used as a giide. If ncre 

detail for iatcrnal use is desired, DoD Components may supplemenc the

~ . 

-- 

- 

. 

a 

TEl2 wiLh detacnablc annexes. At LoD Cowponent Ciscretion, Fart I mzy 

be preceded by a page of administrative informaticn

. . . . 

f 

Dec 26, 79 

5000.3 (Encl 2) 

B- Operational Issues. Briefly describe key operatiozal 

effezt.iwsess or suitability issues that must be addressed b7 testing. 

Part I1 - Program Sumnary 

1. bagelcent. Outline the program and TU management responsibSikies 

oi parricipating organizations. Highlight arraagernents 

be-n par:icipants for test data sharing, responsibilities for test 

at~~~grmnat derisions, and macagement interfaces for multiservice TU 

c€foz+s. Discuss the adequacy of the planned test periods znd scheue 

tn pgovide confidence in test results. 

2. ktegratcd Schedule. Display on one ?age (a foldout, if necessaq) 

that integrated ~ime squencing of T&& for the entire program and 

rekted LE everts in the acquisition decision-making process. I~clude 

eve~~ts sa& as pragram decision milestones, key subsystem rieaonstratias, 

at asticle availability, first flights, critical support 

resoure availajility, critical full-up system demonstratiorrs, key 0T;EE 

eve~&s, finst production deliveries, and initial operatioad capability 

date- 

Pax% 111 - DTSE Outlice. Discuss all DT&E in sufficient detail so +ht 

test abjestives are related to the system operztional concept and are 

clenrly identified for each phase. Relate the planned testing to the 

critical tt-dmical issues a2propriate tc each phase. The near-tern 

portion of t!sie plan shorifd contab the most detail; the long-range 

po&ms should be as qecific as possible. The following irfonatioi 

shoald be hcluded. 

E. DYSE to Date. Provide a summary of the DT&E already conducted 

base on the best available information. This sectioa should set the 

stage for discussion 9f planted DTE. Briefly describe test articles 

(for lastarce brassboard, advanced development model), with emphasis 011 

how they differ from the plaaned production articles. -hasize DTS3 

events a d results re!.ated to requir2d performance characteristics, 

cr;,tical issues, and requirtments levied 5y earlier OSD deeisiom. 

HigUight technical characteristics or specification requirzments that 

uere denranstrated (ot failed to be dEmonstrated). %en simulations are 

a key part of the DTSZ effort, describe haw the simulations are ctlnf 

i d . 

-- 

2. Fctiie DTSS. Discuss all remaining DTU plamed, beginning 

with the date of the crrrrent TEHP revision and extending through completion 

of planned production and modifications. Address separately 

each rgmaining phase of DTZ, including the following for each phase: 

a. Equipaent Description. Susmarize the equipment's funetioaa!. 

capability and how it is expected to differ from the.production 

model. 

3 

. 

.-- e _

. .. ' 

b. DT€E OSiectives . Eurmarize the specific: DTE objectives tc 

be addressed-during this phase. The c-b.jectivt=s ideitif ied stould be 

the discreie mzjor goals of the ETSE eflort, which, when acf-ieved, will 

provide solutions to critical tcchniczl issiies and dem0cstrat.e thpt the 

engineeriug effort is progressing satisfactcrkly. Broad, general 

objectives, such as "demorstrate that the design aad de=.elopment 

process is complete," are of no value. If t3e Secretary of Dffcnse 

decision maorandm requires demonstratron of specific tr:chnxcal 

characteristics in a given phase, identify those characteristics. 

c. X> Events/Scope of Testing/Basic Scenarios. Smarizt 

the key IITE svencs planneu to address the objectives. Tn addition, 

describe i.a sufficient detail the scope of testing and basic test scenarios 

so that the relationship bctdeen t.he testing and the cbjectives, 

and the amount and *&oroughaess .,f testmg, are clearly apparent. 

Include s;li~sys-&m tests and simu'ations when they are key elements in 

detexmininp, whether ar not objectives vi11 be acbirved. Discuss reliability, 

availability, and maintainability testing, and Oecine termz. 

3. Critical DT&E Items. Highlight all items the avaiiability of which 

are critical LO the cmduct of adequate DTSE pricir to the next decision 

point. For example, if the item i; nor, available vhen required, the 

next decision point may be delayed. If approprizte, display these 

critical ita on the integrated szhedule. 

Part IV - OT&E Outline 

Discuss all plarned OTsrE, from the eailiest IOTiX through the FOTE 

during initial production and deployment which addrzsses operational 

effectiveness 2nd suitzbility and identifies deficiencies in the production 

system, io similar format and detail as that, described. in the 

DTErE outline (Part iII>. In the C)T&E to Date sec..;ian, which sets the 

stage for discussion of the planned OT&E, relate %he test conditions 

and results to the operational effectiveness and suitability, as aFprcpriate, 

of the system being acquired. Ir *is section and in Futurz OTZ, 

be sure to discuss the degree to which the test environment, jncludiq 

procedures 2nd thzeot simulations, is representdtive of the expected 

operational environaent. Also discuss the reliability testing concept, 

and the training asld background of operational test perstinael. In OTSE - 

Objectives, present the major objectives that, when achittvzd, will. 

establish the operational effectiveaess aqd suftability of the systea. 

Either present the objectives in terms of, or relate the objectives to, 

the system's operational ezfectiveness and suitability. In OT&E Events/ 

Scope of TestiLg/Easic Scenarios, relate the testing to be perfarmed to 

the OT&E objectives {for icstznce, specify test outcomes that satisfy the 

objectives). Cnen developmerit and opezatlonal testing ari! combined, 

some of Parts 111 and IV may be cmbbed, as appropriate. 

4 

:-., 

. , 

- I 

'4 

.- .'

DEC 26, 79 

5900.3 (End 2) 

Fart Y - hducY5n-m Acceptance Test and Ev31*:atFoa (PATLTd 

Briefly descdk the PAT= planned to d.?mocstrate that items pr3- 

cured fulfill1 the nequirements and specificitions of %e procuring 

contract or a n t s . 

Part VI - %aecial Resource Summary 

havide a bx5ef rumwary of the key resources for DT&€, OTS, snd 

PAT= that sre m e to the program. 

I 

1. Tkst &tides. Identify the cctual nubet of articles, 

inclding k y sqprt equipments, of the system required for testing in 

each phase a d €et each major type of T&E (DT&E, OTSZ, PAKE) . If kev 

subsystems {cuqments, assemblies, or subassanhiirs) are to be tested 

individually, idemtify each such subsystem and thc qlrantity requited. 

Specifically i-ify prototypes, pilot pro&xrion, and prod-xtioe 

models 

'i 

'e. 

2- Spscial Support Requirenents (instrumentation, targets , 

&eat shdatims, test sites, facilities). Identify the special 

su~ort resaarces required for TU, and briefly aescr3ac the step 

being taken ts acquire them. 

5

MATRIX OF GOVERNMENT PUBLICATIONS 

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SUBJECT 

REFERENCES 

Acqt&iion and Management of !megrated Lagistic 

Suppen for Systems and Equipmex 

A. PURPOSE 

This Direcrive cnaPiifhes policy and responsibilities for Inregrated 

Logistic Support iItC), induding rnarpwer planning, a an 

inherent pan of major system acquisitions, inciuding singie-curnponent, 

multi-cornponcnt, and internationat acqtisitions (r efererms 

(a) and (b)), to meet system readiness goals mitfiiii ,mlished msz, 

schedule, performance, mayowe, and other logistic cons,zraints. 

B. APPLICABILITf AND SCOP2 

2. This Dimxiye provides guidance for Do0 Cornpornits 

when establishing policy for ILS for lesslthan-major s-jztcms and 

equipment. 

C. DEFINITIONS 

i 

Terms uscd in this Oirecrivt arc defied in endosure 2. 

i ; _.

s~3part 

S~I~JIKS 

(b) Review ad assessment of dteniative strategies tc 

the opisationai requirement for the system at the lowest Iife tyde cost. 

id 

Logistic (iiduding manpover) md affordaMty conicienti5cd 

at Miitsme 0. 

(d) A systan operational concept (and ahemative, ii 

dcnd and sjmim readiness objectives, tsrabIiJled by hliiestarr I and refid 

thcr?frer. 

om- 

(e) ReaIisAc estimates of system and subsystem RhM and 

patamcttrs which drive manpower and other logistic demands. 

c.eruinty UI key 

(f) Assessment of risks based on tfic dtivity to la+. 

and !ogistic pa mete,^^. 

(s) Documented Logistic Support .4naiyses, which qum. 

titativdy !ink relazed design pameters.and ILS requirements to system readines 

obtdves and defiix detailed support dement requirement% 

2

3 

Jar 17, 8C 

5OCO .34

1. Tine A.sistant Secerq of Defense $haqwwet, Reserve Affrirs, ~l;d 

iogisrics) shall: 

a. 

Issue poiides ad gvidzmce m ILS. 

b. P.eview reidines; objectives f-x redism, consistency with design, 

and suppwzabiliry. 

c 

Review ILS plats and resurcrs for adequacy. 

d. Rwiew pr.ognmciKf manpower and o t k logistic Moc'rces for 

newly fidded systems far com*ency with readiness objdves and ccrnpatibility 

with T&€ results ax! earfy fidd expeziznct. 

e. Exercise poky 2nd aperational control of the Its Analysis Office 

of the DO:^ Product 3ginetrhg Services Office. 

2. The Under Secretary of Defense for riermch and Engineerinq(Detmse 

Acquisition Execitive) shak 

a. 

sitim prcpms. 

tL 

acquisirims. 

c 

& Ehcure that ~ c major h program rep-escnazion and micipation 

of the fqmctionai dements rqo&bf; for the pPdpmii1g. funding, acquisition, 

and applicaiion gf systzm support resour=es. 

6 

..

Jac 17, EO 

5020.3c 

5. 

Ld- 

U4q 

W. Graham Claytor, Jt. 

Peputy Secretary of Defense 

7

fn) 

Jan l?, 8n 

5C00.39 (Esci 1)

-. 

i 

2

. . 

SBIBjECT; 

Reliability ad l!!sintafn&tilitg 

tt 

References: (a) Do13 Dfreczive 5000.1, Najor System Acquisir!.o-is, 

Harch 13, 1980 

IS 

(b) GOD Insttucticn 5000.2, Xajcr Sysrm Acquis!.zioi 

*I 

Ftoceauras, Marc5 19. 1950 

o 

(c). DcD Direczive SGOO. 3, “Test and Evalcsrior,, 

Deczmber 26, 1975 

I1 

A. PURPOSE 

Tiiis Ditectivr Establishzs policies and zespozsibiliries fcr the 

reliability md mainteinabiliq (RW) of Zeferse systems, subsystems 

and equipment. It impleneats rhe princi?lcs set.ferth in referencss 

(a) and (b) fer major systems, and f x items not designtted es mjor 

systems, during afi phases of the lifs zycle. . 

B. AWETCABISITY 

, 

.- 

me provioiozs of this Direcziva apply to the Office cf tho Sacremry 

of Defense (OZC), tne Nilitary Uepartments, the Orgaizcelon o+‘ 

the Joint Ckiefs of Staff (OJCt), 3nd tte Uefensz Agencies. As used 

in this Directiva, the term ”Don Conponcnts” refers to the Military 

Beprzments a d the Dafenre Sgeaciz.; . 

c. OBJEcTivES 

The objectives of defense 3&M activities shcll bc: 

1. Operatima1 Effectivcnsss. Increase r?pera.;ional readinesj 

and mission success of fizlded iteas, 

I. hership Cost Redu:tion. Reduce Jemaxi fcr maintenance and 

logistic support of attached and detp.ched ite- compatents, 

3. Limit Manbower Eeeds. Fie16 item chat can be opergted and 

saictainad with skills ar.d tzaining expected t o be availabls ix. tha 

Department of Defense. 

1. Nanagement Informaticn. Provide spacific typos .o? kbM data 

essential to ecqJisitioc, operrition, and supgcrt m3r.agenjent. 

c 

5. Efficiency. Ensure that each inzrcrnist of SF;^ syd schdcle ., 

investment in REfl coatributss signif ichnrly to thc ahcve cbjecyives.

. 

D. POLICY- 

,.-- . 

, I. G~f~3rsi. Each DoD Csmponent shell establish R6X programs cacsittent 

with its mles and missicns. Each F.&A Frogram sha?l include a balanced mix of 

R6M qinee"iq aad accounting tas!:s. F6M angincsring and acccutang shall be 

tailored fap mxcimam cffitiency in scsotdante with the following provisxans: 

a. Reliability engineering shall focus on the prevention, detection 

and wrrectdon or' desi- deficiencies, weak parts, end workmanship defecrs. 

3ai3zainabilirp egineering shall zedgcs maintenaace and rtpair tima, n;lmker of 

tasks required for each preventlss and sorrective maintanance action, s;ld th 

need for rir,tial tools ma test cqAiprnent. hogram plans shall stress =arl;7 

investment ia IZ&d zngineering in s.rder to avoid subseqwnr ccszs and rchedule 

delays. 

I 

b. R&lf a:.tor;mting shall Frovide inforattion essential to tcquisltion, 

aper~tidll~, und support mmagemect, fo include properly defimd inputs for 

estimates of operatimd effectivonass and omership cost. Cost and schedule 

hves-aent io sfforts to obtair. management.data (such as RbM kmc3strctitxr) 

shall be clearly visible a d czrsr'ully controlled. 

2. R&?? Engineeririp; Policy. 732 DoD Cumponenss shall define fundsmentelt 

of design, mantrfacrurs;ani mar,agement which result, in delivery cf reliable a d 

maintainable it- to the aeratiortai forces. These fm3am+stals shall be the 

baseline for sefectfoe end teilorirg of RUl engineering ta&s and 'tests. 

a. Design fundamentsIs shculd include: (1) parts and mfitzri21 hi:tarp, 

quaZificatlan ecd acteptancz, (2:) cesqn simplif ication and stmdarCizttioz, 

-- (31 part3 am,lricdion stress andlyris and derating, (6) sneak circuit mslysis 

for elecrmnics, (5) failure modlzs and effects iznalpsis, ,(6) maintsnmce as.d 

repair analysis, and (7) RLY groiak tsszing to disclcse design defjcienciss, 

and to verify the effecriveness of cozrective actions. 

b. Hanafacturing funda=P,ntals shocld Include: (1) procoss controbs 20 

m-himizs intrcduction of ueak parts and wurbanship Befeets, 12) ezvizomental 

stress screenhg of parts md eqxipment to disclcse latent dafsccs as early and 

as efficiently ts possible, and (3) failure-frte tcceTtanco criteria. 

c. Engine?ering management fundamemals should kxelnda: (1 j ir.ttgrated 

feihre, maiztenance md repair xeporting throughout design and nanufEctcr2, 

(23 failure ealpsis, with supporting laboratory facilities, (2) corrrczive 

actian pclici%s to minimize recurrence of failures and maintenance or repair 

difficuleies, snd (4) fallav-up to ensure verificttion of corrective aczions, 

3. €?GI Accouting FolicI. 3eparare X?! terms shall be directly related 

twoTerstiona1 effectiveness and ownership cost. DGD stsndard R&H terns arz 

dafined h enclosure 1. Atditional teims shall be defined in at+ordanc:e with 

the follmiag provisioils : - 

a. System XE~Y Partmeters. System KELX &all be measured in fQur oep- 

.. 

arate ways, using units cf neasu2ement dircc'.ly related to: 

(1) uprational 

2

I 

* 

ree2iaass, C2) missbr. succtsss, (3) naintenanca manpower cost , arid (4) legistic 

srpport cost. These four ways cf caessuring R6tl shall bo kmtm as the 

(1 

sgstzn RQI parameters ': 

(1) All systcm RbN paznmetsrs do not apply to all systems, bur 

separate tern, shall be defined for e3c.h applicable system R6H pararno,ter. Inso- 

Car as possiile, these terms shall be standardized by major systes type;, such 

as land ve%cles, shiFs, airccaft, and missiles. Examples sf terns for syscem 

EM parameters are illustratei LT on:losure L {figure 1). 

- (2) Systm It&?! ?aramtrers shall be expressed in oparetiocal RhM 

vslres, not inheren; R&M values, and shall irclude bcth contractor-iurnishod 

equipment (CFE] and governmen:-furnisned equipment (GFE) elamezts of tire ' . 

system. 

- 

/ *. '.* 

(3) Requirements and achievements for sach appiicable system RL! 

parmetor shall be nurnericalip trsceaole: (a) zhrough all pheses of the systen 

life cycle, (b) botweea'ievals of assembly, (c) becween Do3 prDgrazi aocuzents 

end cor.zre.cts, and (d) between 3oE data systems for acquisitiori a d 3wriezship. 

b. Easic R&Y Terms. Bas52 terms for K&N shall be dzfined ir, unitb of 

msas=rmnenf capzblc: of eescribing rhe system RL?l parameters relarzd to msh- 

ter.acce mznpover COS^. Audit ':rails shall be used to reletz tke uthsr a?plieable 

systerr, RhY parametezs to t3ese basic uirs of measurerrent. Audit traih 

are i1lustra:ed in enclcsure :(fignres 2 and 3j. 

(I] %sic reliability terms (such as Hean-Ti@e..Br?t~een-Frilllres3 

shall bciude all item life Tmfts, and every failure within tho item, to ensure 

they cm describe the tncintezazce-related systea reliability ?artmeter (fcr 

exaTpl;. , MQ~-Time-Bes~~een-!l~i~t~n~nce-A+tions). Basic re1 iability ze,-res shall 

not b= 

\ - lirzized to mission opezatinz time, ar to mission-critical failures. 

(2) Basic maintainability terms (srch 85 Heen-The-Ts-Repair) 

shall include every prascribed level of mabrenance and repair, to ensure the]; 

can describe systes demar,d fa; nehtenarice msr.power (for sxm;lle, total direct 

manhou-s pe:: maictenance acticn:;. Tney shzll nof be limited to the system 

doGe;ltirnc necessery to diagnose iterr: failnre, retnove, end re:lnstdl she :-ten. 

I. R&Y by Derim. The 5olhviag provisions cra prereqJisites +a the 

achievemant of inbercnt R&H values. 

a. EiEdY-rslatec? acquisition, opexazioxi, and sspparr experience shall be 

provided fro= predecessor items as iqut for Rh?! prcgsams This information 

shall lnclrde meksured RhH values, neasared enoironmental stresses, ard tha 

skill levels of cperator and mlrit.-nance personnel. 

. 

b. R&M imprcvenent from one geslerstion of items to tke next shall ke 

em$msked. Precisxs opergTisnal R&?f deficiencies %hell be 6nElyzad to determine, 

inscfaz as possible, whethcr they kern due tc materiel (XGi dcsign &IC 

manrrfi;cture) or ta opiriit5.n:: ,and suF?ort conc+pts (p3licies md Slannhg factors:. 

Coxactive act:'on shall be diraczed ta the c3~se of the defic.'.ency. 

3

._.- 

L 

I 

' 

z. Tbdha5fs bewen performance ad reliability, and rmong requized 

vs;ues 5xr E€ii panmeters, shall balrnce xke desizn effort devoted to 

cperatismail- -Y~IZ~SS with tf?bs devoted to ownstship cost redacticn. 

d. desigsia~td as GE, off-the-shelf zonmerciil products, or 

prsfe.rrdr.psas; $ha99 have proved relaable aad matntalnaale in rzrvicc. The 

cnvircmnenx ;iirU 

iZem is reliable and maintainable shall be s?acod. 

- 

;I. 

Tks~ di-s snd procedures shall !e oqerationally realistic, 

or?d tbey &d3l &a dsf2ned early wough to influence i+em design. Parfannence, 

rdiabiliqy,, mrl e~~ixmnnsntdi stress testing shall be ccnbined, ax! types of 

envi:- 

szxess will be combined inscf er as pracrical. Hair,tainability 

tests s3zEl .zqrmsesz ~ZEZI mainteaaxe ant repeir in service. TSey shoul6 be 

acczled '@ btrduczis~n of siaulated failures and prevuntive nainreAar.ce. 

5.. Wtga 5 - n shall be cansidered cccoraing to their tffes-cs on 

both o * m B eff~Y4vamss ani ownership cost, For exmple, reZundancy 

and als- rudes af npe~a+-ion improve mission reliebility, but they rsduce 

rnziat- 

re?lh&ility md thus basic roliati?.ity. 

5. ZzH$&diQ is re@red dcrfng full-scale development , coacurrent dzvelc?nenz 

d 

tancurreccy is approved), 3nd eking uii:ial 

deploymen.. Zhdiczcb 3iSS pcth skdl be stezed es B serizs cf intermediate 

pilet-,, -0-d pais and thresholds , for each of these P~ZSZS. 

a. i af trsiag shall be schedulsd in conjuaction %i-:h shch 

- i??tenn- mibszane. 3lae purpose ef these tests shall be ;G find dssign 

defici- a& xnand3i-g defects.. A block of time and rcsourcss shall 

be s c b d s 3uzr zlic ca=reczLoa of deficiencies and JeieGts found by each 

perid a!? zem5iag, a prewezz their rzcurrence iu ?.he operational inv;intctr3.. 

AdEiiXis- ' of S&3 engineering change pqosals shell be sinimized. 

/' \ 

L 

- 

ib- 3bs di€fereas between required vsluos for systa 8&3 Farmeters 

shall h d B wzncezaze engineering effort where it is necdes (for JXarrple, 

&3im rrliabilitp by correcring miszisn-critics1 failures; reduce 

maim-= cas% 5y correcring ens faj3v.rp-s thit 3ceur frequently). 

G 

E&?? grot?th shall be assessed an6 enfctccd. Enfcrcernent 

af int- " I&?!, gcals shall be left to the acquirkg activity. FaLlura to 

achier3 EP 

'ste E524 tfireshold is a projestod thresho1.d brcach, and if 

it ocuxs, PP isurmdiats review by the prograq decision authority is requirzd. 

6. BE?!! Azzsaunz5s~: Ies=s. RbM demonstrations, qna1ifi:ation tzsts, and 

acceptEI.n;s xsss skll be! tsihred for effectiveness a36 effiziency (maximam 

r+~xrn zm SESX ud schcdjle investmeat) in terns of tha ams8emer.t information 

thq p r d , 

a- k td3s .ci&ere it is knpracticel or *efficient to dermstsa6e all 

a?Fli&ls presameters ts the syszem level, R&H estimates zhd4 be compiled 

frnn lsan~~-lewd rest rssrlts. In every case, measured test zeslllts shall be 

consid-ti izafDormstion only 50 the dtgree that test conJJitiar.s and -9 

I 

procedzues fMIste the verational life of a production item. Those slemen 

of opers%iuzr~~3 35dI wahes rjhich are not simleted rhali De accmnted fer. 

I 

-.,A 

4 

c 

i*

Jul E, SO 

3000.80 

t. Totdl test time and number of samples shall ba based t3n the anoxit 

of confidence tahed (the degree that b&nas of uncartaictg are tednc?d) by eack 

additional iaererrent: of testing. Statistical decision risk End c:x,fidecce 

levels shall be baced m tradeoffs with ccst and schedcle. 

c. All re3evanr test results shall be used to project opeiatiacal R U 

values for estlrn3:ss of opersticnal effectiveness and cwnersniE; ecst, t.ut cc!y 

chargeable tesf resuito shall be used to detennire contractaal coqlfsnce. 

* 

- d. Insofar as possible, tests :hat determine caneractucl corrplfance 

wits RM requirements shall. be ccnducred ox controlled bj someonc nths': than 

the supplier whose compliante is being dezermined. A higher tier scnfractor 

n.sy coqduct ar ctntrol rhese tests oil behalf of =he govarnmenz. Suppliers' 

fsst facilities may be used. Test rssults shall be fed back as input fcr the 

suppliir's qoality ccnrral program. Exceptions in wSich the supp!.ittts test 

their om praauct under intermittent survoillance may be granted in sizustiocs 

cf tecfirical or fiqwcial necessity. 

7. .4cauisition. Frograrr. review and dzcision authorities shall edkress FLY 

ackievemestr of the przceding phase, and preparations for tbe follocing phdse, 

et each ma jor mileszone decision or cquiva1er.t point i z ~ thd acquisition process. 

a. Mission Xree Anzlvsis. Proje:ted deficiencies in opezaticnsl 

readiness, mission su=cess, rnainrenznce naming, and logisfir, suppart shll be 

dacumeiitgd as needs of tfie sission araa-. Establisheat of qJanzitaeive RLY 

reqcizements E h d l be defstred to the ccncsptual phass. 

b. Conccotual Thase. A measured baseline -Jdlue sholl be obt&ed ?or 

aach systea RLV pararreter that applies to each eltentzive system cclncept, fro= 

aperation end 'support experience with a similar systerr: or systems. A system 

iife profile shell be defined, to ir,clvdc me or more missicn 3rofiles; the2 e 

tcnzative operatistal goal shdl be established for each aoplicsble S~S~PJJ RW 

paramezar. These goals shall b2 resgonsivc to documented meds uf the mission 

&res, ard rcalisricslly acnievable in comparison t3 bcsaline values. 

e. Demonstratjoz and Vzlidation Ph2s2. STP, items shell be designed 

*Lo prevent operazional R&fl deficiencies typic51 of curzent items. Items thar 

are selected as r;FE or off-the-shelf commercial Frodccts slall have met, or 

shsl? be r+quLraC to meet, their allocated R&?l goals for the new system =.der 

equal or mre se-Jere envirarmentrl strbsees . Operating and sitpport conczpts 

shall be tailored to prevent operatima: RSM def izienciss . 

d. Full Scale Dtvelmment Phase. A firm goal an6 a threihold shell be 

establishe?, ar the full-scale development dxisign, for each applicaSle systez 

R&Y 7araLieter. Goals shall be realistically cchievstle ir. sert-ize; tnresholdr 

shy11 bz azcepzatle in service. Goals shtll be translated in% specified 

Values, an? tLrc.s1;ol(ls hrc ciinirnum act,cp:able values, in contri:.cts for both 

CFZ ani GZE. RbM grot;';h shall be ecsesset ar.d enforczd to cnsure thEt R&hW 

* 

thresholds are mkt well befor2 thi production kcision. 

e. Froeuction aqd B2ployment Pnese. Previous use, opersticnal tst 

.* 

results, and verified design corrccrioas shall be inpits for tho pro2ucibn 

decision. Design corracrions shall have been verified under conditioos no less 

.- 

5

f. - PE-Serviez ‘E-~alx:jticu Tie acqu- :*.ag ltgrnry shall cootinue t:~ 

xrourect operational R&?l deficiencies 3-~c to : -.c:icl dcsigh acd qlality, to 

-e that R&Y gcals rra5‘finned air, th2 pr~d-.::tfcn decision are achieved in 

acrrice. Rrsponsibi3izy for tbc cDrrae-Lioz cf operational EkY deiicitneieo 

tM by cperaring cr trapport concepts shtl: be clcasiy defined. 

IL 0.mrrshi.p. The foUcuing Frovisions a?ply froa dclivsry cf 83 ita to 

-2ts €in21 rxqxmii:azre tr r.zaowa1 from tat operational iroentory. 

b. Specificstions for spares. repramrCmtSts, and modificzlions ahall 

*e os :rss string-: A&Y repiremznts tban sptclficntioqs Ecr &.e ariyf-1 

-pnen-. Sprcificazions shrll os t-OViewCu, and upgraded 1s r)ccessav ~3 

e e c t El d:ficiescirs, upon request cf clperazing or s*Jpgorti.r;g 

. 

acti=-iefcs. 

:. DoD in-s~rvicc tat3 callicrtim sys~csrs shall report the ~ssurtd 

-?-pes ..f each a;?licable system B&Y slaramctzr, a ~ d idertify operazioral RE3 

’ 

/. -? +cxc=ciCs. DcD standaa-d data elemants siiall be deveiopd in rccorciancc wi.25 

../’ +~bset?.;m 5.3. of this Directive and curr:nc DcD policy on da’ca elcnlrni star+ 

iETdizat.bcri- Samples oi drfectivz maLcriel ais0 should be rttzined to tSe 

acslljis::ion cozxcwity for -%iH engineering analysis. 

d. SpTcffic offices sbaX. be cstzblisbed to invhstigaSc end resolve 

%he operatinnzl. RSl! deiiciaxits oE itims no longer tnd:?r the ics?onsibility 

of an scqnis5tion ?rogrsm. RLV, improvements havins sigai1fcz.n: ?ctential for 

retcfs1 on hvestnent (in accordance with s=ction C. of znis Dirccti-QE) %.hall 5. 

htorporated in materid, aad ifisritutcd bj revision of opel-zting and sqport 

tcacrpts, pclicics, ar pltnning factors. 

-. 

i, , 4 

1. 

&all: 

The %der 3ecttta:y 

cf Dcfcnsc - for Rcscarc5 and EngiEeerin;: (USDR€.ZJ 

a. 3e rcsponri3lt for tke RL3 of systems, subsystms, a3d eqJiprnt 

?heugh all phases cf the scquisi;ior process, and as necessary t? coirici 

operatianal R&H deflrizncts tawed by materiel design and aesufacrurc. 

h. Ezsrirn :hat R&E en;-Lnec:izg end ~CZOU iting tasks arc ssta5lisztc 

for each eajcz r;yst..sm acql;isiti.m, as dtfinci by DoD Directiot 5QC3.1 (reice=c 

6 

.f.

. 

, 

Jul 8, 80 

%GO. kO 

r- 

ense (a)), md that suificiert t:m and resources arc programmed tc aczcaplish 

fhcst tasks. 

c. Easuxe that qunntitati.tc goals and thresholds arr established for 

the RL? paraaetcrs that aup1.i to rjch major system, ;.ni that these provide an 

optbun. ba.iocct between opezatio:ial ef fectivtrtss ead ownership cos?. 

d. Geview R&-l eoglnerri.ip achievements and RSX accounting ?aoj ecticzs 

rbeaeh rc3Jcr milcstnrrt decision, .and fake appropriate action an responre tc: 

(1) deviat.ions from RM engineering zeguirtments (subsection D.2. I, aGd (2: projected 

breach of I&! thrtshold, in atccrdancr wi'h tbt provisions of POD 

fzstructiun 5300.2 (reference (b)). 

e. Sponsor rzvisie3 of tne Defense Acquisitisn Bequlations, Hilitiry 

Specifications a d Staodards, and cthrr research and engineerin,: docunecrts to 

inpleaeat this DirecCive. 

f. Proa0t.e coaticuing ixqrovcment in R E engineerins asld accouting 

to increase the cfficieny? of R&li ?ragrams, and to netermine the rclatisnships 

bet-etn 3LY task€ or tests and resulting values of the system E&Y 2arsrnttcrs. 

2. The Assistanr Seeretaw oE feftnse (Eanpower;, kseisrt Affairs, ar?d 

Logistics) sball: 

a. Be responsible for thr Frtper apilication cf s'yslern R&H parameters 

in manpower arid logistic support plans, end for the corrtctior! of operztioaal 

R&!I dsficiezries caused by sqport concepts. 

b. Ensure that manpowr ctrds (including skill levels) and logisti: 

resmrces directly ralcted to such operarioazl effectiveness objectives as 

readiness and combat utilizstion ta4es ars determined, using appropriate E&?? 

vplucs and projections (Daf Instrucsioa 5000.2, reference (b)). 

e. Ensrirt that tradeoffs a,-e made Lo detonnine the optimum nix of 

X&% goals and rhrcshclds, zlternati-Je logistic support concepts, and maming 

Folicles, t3 mes sptem oimezshiF cost reduetior! cbjectives (DoD Instruction 

5COO.2, reference (b)). 

d. Sponsor review of lcglstic support conccpts and aaaninp pollcics 

aad revisioas Etcassar; to prevent recurrence of operational RLY deficicocics 

during all ?hascs of the life cycle. 

3. Tke Dircctor,E:femt Test and Evalcation, skall crsuie chat, for testing 

encompassed by DOG Eirective 5000.3,(r?ference (c)), the independent operatixai 

test and eval?ration agtncies : 

a. Assess esch aFpliCable system R&H perameter insofar IS practical 

duriog system-live1 tests, 2nd conduzt cr review the results of eq'iipmentlevel 

tests, as acccssaxy, tc compile systern-level SLY estimate%. 

- 

.. 

7

- 

b. Include an estins*- -as& ar L>pr=priatr test arrd evalua*,:icn fcz 

eech 3pplicabie 5ystem #6!4 par ia xe.>orzs supporting major mi?+x,toXL 

dzcisions, md ~=a:= tho- ceafi.; 

: 8 : ~ 

:e levt!: 3saociate.i vitb each estimste. 

c. ?ran and conduct c3 

mhiziize przgrim cost and. shea 

. 

a;ic?r.a; ?;?I 

? hpact. 

teszing efffciently in mder tcl 

L. The D2D Cost hzlrsis i-. _p.m~n. ;to32 thall eQsurs tbat cesz msiysis 

groups : 

a. Assess the fqact of S i . 3 tcquirammrr or! acquisjtica cos?, md the 

ef iect sf H6N inprovcmenro oa re; x 5 o ef ~ omership cost. 

b. '3se the appromiate S-stem I?&?!' paremet9rs as inpirt for ona~r>.ip 

Gost estimafes, and apdete cast $.r::Fmates with cparatioxl ex7erience or 

j-e I I"' .cu?': t~st :esults ptivr t.o rni-3~ milestsne decisions (CoD Instruetiort 51100.2, 

raforence (b)) e 

c. Iqrsve cost melysis te.,abiiity to analyze thz cnntrihtim of R&Y 

octi,:ities f-3 o?erztiantrl ef f'act:,twiess end ocnersLip c3st reductiou. 

a.. Be rssncnsibla Fzr *Ac operational R&N of thsir systems, srtsystc?rns 

mc! eqoi?ntat, to inc!.uiLe %ne efftmcts of mzreriel design, quality, 3peratiig 

md stpporr cancefts, policies, &=.d plamiins factors. 

3. ldrntify tno sjrtei3 F6K parametars that apply 53 each typ= ai s'ptan! 

the:: oFercrc or plan eo acc-i.:e, er,d dafine a measuraiible ten for ecc';: sf 

,chose parameters, EnsurE that r . tit dEta co1le:tion syszems msk. iach appli- 

.~;-*.b:z system X! parametox rzac- kle. 

c. Defir.s the R&?i en& -

Jul 8, 80 

5003.60 

g. Prtv-de Rk. -relazed scquisit-an, operatian, h n ~ s;lpoarL exparid-r.ce 

PO their pregram managers and participating ConxrJefcrs. Hsintain an RSrN 

techdagy base aad carporate aemory to institutionaliza lissocls learned. 

h. ksirre thar their progiam managers and acq:iiri;:g activiftes : 

(1) ktegrate and tailor specific R&?: cnginezring and secouating 

tasks into each phase of their programs. 

(2) Allocate quantitative EbM requiremeats to each CFE m d GFE 

c 

it&. Establish char Pines af R&?l chargeability for the various suppiisrs cf 

Cfz, GTt, and off-ebe shelf eommertial products. 

(3) Address RLY requirements and achievenenrs at caatrsct~d 

design reviews, and during the source selection precoss. 

. 

(4) Enftrfe the 8EY engineering tasks ond tests specifi.-c as cantractual 

requirements fr. accordance with subsecrion D.2. ~f this Ofrective. 

(5) Assess snd enfozce ap~roved RSN grouch to neet intarmedizte 

ELI: goals. Reporr e projected threshold breach in eveax of ?ailwe io meet an 

intermediate a&!! thresnold. 

(6) Continue fir cortect operational R&?l dcfitjencies carts& by 

factors within their defined responsibilities, to :nsure that 2&3 goals are 

achieved *. service. 

f. EFFZCITfr DATE 'Ah9 IHPLE>EhTAl'IOX . 

The provisiors of this Directive are effective itmediately. F5vard oile 

copy of each im?lemenZing document to the Under Seerstcry of Defense for 

Research arid Engineering wirhin 12C days, 

Deputy Secretary of DEr'ense 

Enclasura - 1 

Do9 Star-dsrd R&H Terne 

..

. . 

. . - . 1 . . 

I i 

I 

- I 

XI x 

L. I 

- 

I 

1% 

i 

- 

xj x 

I 

I 

27

I_- 

-- 

-----_I_ 

\ 

TABLE 2 (CONTINUED) 

I 

POTENTIAL IMPACT OF OAO RECOMMENDATIONS 

ON SELECTED M4JOR WEAPON SYSTEM PAOGiRAMS 

Ati 64 ATTACK HELKOPTER 

-L_- 

STANOOFF TARGET ACOUlSlTlON WSrEM 

- 

NAVY PROQAAMS 

- ADVkNCEO LIGHTWEIGHT TORPEDO' 

LIGHT AIRBORNE MULTI.PURPOSE PVBfEM 

.- 

AEQISICQ4'I 

ANTISHIP CRUISE MISSILI! PRMRAMS 

F1A.W AIRCRAFT 

AIR FORCkrflOQnAq 

-- 

MX WEAPON BYSTEM 

_I-_ 

SPLCE TRANSSORTATION SYliTEN 

- 

F-16 AIRCRAFT 

C-X AlRCRAFl 

- _______------ 

KC-135 AIRCRAFT MOOIFICATIONS 

iP 133 AIRFIELD AT rACK SYSTEM 

-- 

JOINT I'flOGnAMp 

I ACID ATTACK CRUISE MISSILES 

IIIGII SPEED ANTI4lADIATION MISSILE 

ADVANCED MEDIUM RANQC AIR.TO.AIR MISSILE 

-. -__-I_._ 

ASSAULT RREAKFA 

- 

TUEATER NUCLEAR FORCES 

cI_-- 

-- ARMY PHOGqAMS 

- ----_ - 

AIM FOttCEINAvV TRAINER AIRCRAFT PROGRAMS 

- 

MINIMIZE RISK/ 

ENSURE 

EFFECTIVENESS 

IMPROVE 

DISCLOSURE 

TO THE 

CUMOHESS 

AFFIRM 

REOUIREMENTO 

EVALUATE 

ALTERNATIVES 

I 

REDUCE 

cas CS 

LOA0 UALLIS?IC MISSILE DEFENSE X 

X ' X 

.-- X 

w 

X 

K 

.- 

CWPE AHEAD PROJECTILE 

--- 

X w 

- 

-- 

X 

X 

X 

X 

X 

X 

_I 

X 

X 

- X 

x 

x 

x- 

X- 

X 

X 

x 

X 

it 

X 

I 

I 

i 

X 

- 

X 

.-- 

i 

I

LINE:-OP-EFFOEM~: To khat extent .io the systems currently being 

acquired satisf-- the igency' s approve? progrza 

perf o-ce thresholds? 

MWCR ISSUES 

' 

In ctt- report to the Ccngress dated March 23, 1981, we 

raprted thak FetZeral agencies estimate that their 1,840 current 

majcr acqdssftioas trill cost $777 billion at coqLetios. 

Each year the Congress ~xpsr,ds considerable effort analyziag 

buCget requests for major systems being justified on the basin 

of satisfying approved opratioaaf perf ormar~ca. 

Tire ixcpact or' these acquisiticns is critical OR technalow, on 

the Natioc's economic and Eiscal policies, a d 03 the accomplishnient 

in such fields as defezse, spaceo energyI and +-ransportation. 

This is recoqPizsd by the Executive Branch as evidence5 by OME 

Cfr=ular 3-103, which descriaes the acquisition of-major systems 

as 'O**fone of the most crucial and expensive activities perfomed 

to meet nationa2 needs." The Circular dirsctted cgencics to ensure 

that major systaus being acquired viU meet performance criteria. 

Grest suns have been cdtttd to acquire systems or prsgr&ns 

which later axe found incagaSle of mezting requiqed perlcman=e 

criteric. 

ACHIZVEMEP AS XX TBE LQE 

UNDER THE MISTIHG PROGRAM 

- PLW 

Objectives under the existing plan 

Our objective under the existing LCE tr7as to evalbuzte the 

adequacy cf %he zolicy and procedures cf Federal agencies for 

acquiring systems to address mission rreeds. The specific 

questiocs to be addrassd in achieving the objeceives wera: 

1. Has rralistic threat data beer? us& to 

establish requirements? 

2. Do &e Frescribed 2erfo.zmance gcals reflect 

mission needs? 

3. 

Will the systems operate effectively iTp their 

intanded e,?vironrnents, both natural. an9 

c imul at ed? 

,-

4. Has adequate testing and evaluation been 

planned or conducted to assess whether the 

system will meet mission needs? 

5. Do the established reporting systems provide 

data that’can be used to reliably 

assess the effectiveness of systems in 

meeting mission needs? 

6. Can the systems be modified to adjust for 

future changes in the threat and in mission 

needs? 

Results achieved 

Vie believe more attention to the precise role of some major 

weapons could help eliminate uncertainty as to the capabilities 

proposed for the weapons. In other cases, the need for some of 

the performance requirements proposed for weapon systems we 

examined were questionable or not fully established. Elimination 

of such uncertainties would help to minimize development time and 

reduce cost. Examples of individual weapon systems where we found 

this to be the case include the Low Altitude Defense System 

(6-MASAD-81-5)r some Navy Cruise Missiles (C-MASAD-81-9)r and the 

Air Force/NOavy Trainer Aircraft Programs (HASAD-81-13). Reports 

on these prbgrans were furnished to the Congress late in 1980 or 

-\ 

early in 1981. Some examples are provided below. 

Our Low Altitude Defense System reports pointed the advan- - 

tages of the system in certain applications but questioned its 

use in other situations. DOD subsequently initiated a study to 

determine potential applications. 

Our report on Navy cruise missiles points out that some assessments 

of need were inconclusive and that the precise roli of 

some versions was not documented. T3.ese issues are expected to 

receive considerable attention during PP 82 authorization and 

appropriation hearings, 

Our report on future trainer aircraft surfaced many issues 

including specifications so restrictive that a potential aircraft 

for that role was eliminated from consideration. As a 

result of our efforts the restrictions have been removed. It 

is expected that considerable debate will take place on this 

aircraft and GAO will be. called upon for additional work. 

WORK REMAINING 

UNDER TEE LOE 

LOE objectives . 

The objectives for this LOE are to identify the deficienciw 

in the agencies acquisition process and to recommend changes whit 

30 

,d 

, 

-1

.. 

will hsure that major systess being acquired will meet lpproved 

Ferformance criteria. The specific questions tc 3e addressed iL 

achieving +&e objectives under &is LOE are: 

1. Has realistic threat data beza used to estzblish +he 

systenn's required operationaf ger5ormance criteria? 

2. Are the prescribed performance goals reasonable 

and achievable? 

3. W i X the 3ystems or projects sperate efTectively 

ipa tbeif intended environments, both mtural an6 

simlated? 

4. Zas adequate testing and evaluation been planized 

car condiicted to assess wkether tlle systsms will 

meet peeormarace criteria/goals? 

5. Can the systems be sodlfied to adjust to future 

cfsarqes ii3 the thr5zt acd improved pereomance? 

Strategy fer the upcmin~ 

3laminq period 

t The strategy we plan to use includes (1) selecting specific . 

agency programs involving the investment of large suns of money, 

(2) looking at ths required perfarxnance critaria of those prcqramsr 

and (3) evaluating the capabilities of the system being zcquired to 

meet perfo-e criteria. 

The assignments listed te1-r were selected to help achieve 

the objectives or' this LOE. For khe most part the systems selected 

for review have 'progressed beyond milestan@ 0 and 1, (see p. 25) 

aJd work is concerned with activfties/objectives associated wit5 

full scals development or prsduction Cesisions--dlestenes TI and 

I11 

Ongoing assignments 

Review of the Amy's DIVAD Gun Pzogr-a 

Review of the Air Force's Air Launched Cruise ilIisaile 

Program 

Review ol the ARny Pershing 11 Missile Sys5em 

Revizw of the Navy's Landlny Craft Program 

RGview of the Present and Future Friend/F@E LdenLiflcation 

EqaiBment and CapaSilitias

Review of the Bay's ?'/h-18 and AT-88 Aircxafk Prcgruna 

I 

I 

Review of the Savy's Sonobiicy and Eignal Processor 

Development Programs 

Review of the savy's A/BGH-~O~ cruise Missile System 

Program 

Review of the Air Force's LAlJT.TRpJ Frogram 

Review of the Ahany's Rexcctely Pfloted Vehicle Program 

aeview of the 

Viper Program 

Review OS the Xavy's DGX/FFX Ship Program 

Some expected results of the foregoing assignnewLs is to 

identify to the Congress those prsgrams which are not meeting 

the psrfo,artznco criteria for which funds were appropriated. 

fn sane czses we will identify deficiencies in the agency's 

aequisiticin process that alkwed the perfo-ce critsria to 

be degrad%d, such as, the agency acting on tentative or incamplate 

isfcrmation~rather tharz vaiting for the complett info-- 

tion or a firm!, report. 

Pianned assianreen"cs 

Under this LOE we also 3lan assigments covering: 

1. Survey af Counterais Zapabilities 

2. Survsy of U.S. Space Defense Program 

3. Survey of Night Adverse Weather Capakility of 

Mulitkry Aircraft 

32

CHAPTER 4 

t; 

ABEA-OP-CC:NCE3H: 

Determine ths adequacy and effectiveness of 

agency effosts to reduce total costsand 

increase a2factiveness of major acsuisitions. 

During the 1S6O's an0 esrly 701s there was little consideration 

given to controlling ouk-yeaz o@eration and suppoft cost. 

In the mid 70's the consaque.ices of their lack of attention 

began to becoIce known and in ?he past few years attention has 

been dram to conteollinq and reducing the out-year costs of 

weapon system entering the development cycle. Ssme recognize 

this as a long range problem tequiring the development of better 

management approaches; others tend to ignore it. 

During this period-1960 through late 1970' +-weapon 

system complsxit-~, cost, and operation and support wefe ever 

increasing and, sicee fwds were limited, the qiiantity of system 

procuted was relatively low, This combination of factors 

resulted in reduced combat readiness of sane of our groundr sirr 

ahd naval forces; We believe a flxndamental cause is the seTete 

unbalance ketween per'formance on me side an6 military utilityreliability, 

availability, maintainability, and hman operability- 

- on the ether side, In the prxess of developing and deploying * 

complex systems essential phases ~ eed mate attention, n.zmel:l design 

for ptoducibility; design for reliability, availability, and 

maintainability; and trade-offs of acquisition costs to lower long 

term operstian anZ suppc4rt costs. 

The validity of the efforts t3 rzduce total costs and improve 

effectiveness shouid be demonstrated during tests and evaluations. 

Testing duriag tht development phase czn disclose problems and risk, 

including those related to lang term operation and support, at a 

point early In the acquisition cycle when ccrrective measuzes can 

be most easily and economfsally taken. 

Controlling costs is a major concern to the Congrass and its 

constituency. Just as important is being adequately informed on 

how U.S. major national grograms are being developed and managed, 

and whether systems under development can be expected tc meet 

performcnce goals and ralatsd requirements. 033: objective in this 

area-of-concern during the next 18 months will be to Geternine what 

specific actions a:€ be!.ng taken by Federal agencies to reduce the 

total acquisition cost of programs, yet provide needed eff ectivsness. 

33

\fiat has been achieved 

We have learned such shcs our current pbk? was written 

I8 .weths ago. Oux offorts hava hfshlighted that th military 

ssmices are desigdng weapon systems which are difficult and/ 

or costly ta operate, support, and maintain. !qe believe chess 

problems can be traced w a Departseat 03 Defense's (WD's) 

system acqtdsitian process, particularly the early phases before 

system design is set. The lack of attention to (1) early 

system design along w ith the insreasing sophistication and 

cauplexity of this equipment an9 to (2) ownersk-ip considerations 

by defense officials a% major system acquisition milestones, 

have contributed to a low stat3 of system readiness. 

O m past effosts have focused Cangressional attention 

on the major factors in +&e acquisition cycle wkich contribute 

to decreased systerp effectiveness and high costs to 

operate, support and etain. We have also encouraged and' 

suTpolctad DOD hitiatives to develop and ixpiemezzt- guidance 

sad izcentives which X;,U 2rovide equal atkentioc to ownership 

and effectiveaess consideraticns during the! syst-jn acc&sition 

process. 

The work done in &as area was used as the basis for 

proposing economies in the procuremen% of majer systens ia a 

January 21, 1981 letter fraa the Comptroller Gensral to t&e 

Secretary of Defense. (Specific reports and resulks achieved 

are strmmarized orrpp. 56, Ti7 and 38.) 

Three IAnes-oE-effort are proposed within this area-clfconcern 

: 

-What is 5ei.Jg dzie during the development and ccquisition 

process to achieve the proger balance b'j trzde-offs between 

levelopnent and acqdsition cos+s, design to cost constraints, 

aad ownsrship costs yet maintain adequate systa 

perfomzce and operational effectiveness? 

-To what extent is testing and evaluation of acquisitions 

effectively planaed, con&u:ted, reported .and considere6 

in decisicn making? And, what is being done h devclopnental 

tests and evaluations (DTbrE) and operational tests 

and evaluation (OT&E) to insure that reliability, evailability, 

maintainabiiity, and hcman factors have been 

adequately considered? 

--Does planning for major acquisitions aeequstely consider 

potential critical material shartagea on sys:em cost, 

- sched;lle and performance goals? 

- -. 

-1 

34

LOE 3012 

LINE-OF-EFFORT : 

MAJOR ISSUES 

What is being done during the developme,at ma 

acquisition process to achieve the proper balance 

by trade-offs between development zcd acquisizicn 

costs, design to cost constraints, and ownership 

casts yet maintain adequate system performance 

and operational effectiveness. (See Aqpendix 111 

for relationship of this LOE with the PLRD/SM&D 

issue area.) 

As indicated earlier, Federal agencies spend hundreds 02 

bflbllsns of dollars to research, design, develop, and produce 

systems. The process for acquiring these systems is extremely 

complicated and influenced by a host of factors ";hat affect 

the systems' eventual operational effectiveness. Wring the 

acquisition process the system developer gives considerable 

attention to system cast, schedule, and technical performance. 

Of equal importance is the need to design systems wnich, &en 

deployed, can be adequately operated, maintained, or suppcrted 

at a reasonable cost. These design parameters which affect a 

deployed systems operational effectiveness and cost to operate 

and mahtain are designated as ownership considerations. Examples 

of these considerations which must receive adequate attention . 

. L during early system design include logistic support, h man 

operability, and quality assurance. 

m e system developer is constantly being confronted 5y 

the need to make trade-off decisions that affect the high 

visibility aspects of a program. In this environrcent, owF-ershi_o 

considerations can easily be traded-off. We believe the Gressures 

to attain specific performance goals within tight tbte and development 

cost constraints have led management to trade-aff or okherwise 

sacrifice the ownership considerations to meek short-tern 

performance, budget, and schedule pressures. As a result, lack sf 

early attention to ownership considerations has contributed 

to the deployment of systems which are difficult krld coatly 

to operate, maintain, and support. 

ACXIEVEMENTS IN TXE LOE UNDER 

THE EXISTING PROGRAM PLAN 

- 

Objectives under existing plan 

The major issues described above represents a change of 

emphasis from the LOE discussed in the existing progrern alan. 

The revised LOE places increased importance on Federal agencies 

efforts to design systems which can be operated, maintained 

or supported at a reasonable cost. The objective of the existiag 

35

LOE was to determine what actions can be takerr by Federa.1 agznc ies 

to reduce the total acquisition costs of systems and proyr 1303. 

The questions to be addressed in achieving this objective were: 

1. 

2. 

3. 

4. 

5. 

6, 

7. 


Should pr he contractors have total responsibility 

fer the product purchases rather .than haring subcontractors 

wazrant each subsystem? 

1s adequate emphasis given to lowest possible 

operating cost during system design and developmant? 

Should warranties be provided for in the development 

stage in order to have a better design Frodact, 

thereby minimizing future repair expenses and design 

changes? 

Would a better determination of the quantity rleeded 

and technical and operational needs earlier in the 

procurement process aid in reducing casts? 

Can-systems designated for one miss;aon be used for 

other missions, doing away with the need for a 

second system? 

Before entering production, what assurance is there 

that systems can perform their missions $0 that 

costly retrofits are not required? 

What is the impact of producing at mort efficient 

pates? 

The work conducted to date concentrated 03 addressing questions 

number 2, 6, and 7. The work done has 3coduced excellent 

results and, as discussed below, additional results can be 

expected . 

We have issued the following major reports 09 the existing 

P ine-o f -ef f 01: t . 

-=PSAD=80-6, November 8, 1979, =Impediments to Reducing the 

Cost of Weapon Systems". This report points out that 

major weapons' cost increases since World War 11 far exceeds 

the rate of inflation, and no relief is in sight. Varicus 

Department of Defense efforts to resttairi Costs are wsrthwhile, 

but unlikely to achieve really substzntial cost reductions. 

The rising costs have reduced the quantities cf 

36 

- .-.-. .. . 

-

weaeons prodxicia3 and widened the C.S. forces' numercial. 

disadvactqe the Soviet arsenal. Military arld political 

COASideratimS may prevent fundamental changes , but GI0 

made fee- ' ns that coald relieve the cost 2rcble.m. 

30, 1980, *Isplications of HiShly 

SaFhistizatsd Weapon Systems on military Capabilities= . 

This repcmt shous that a host of factors surrouadfnq :he 

reliabflitp, availability, maintainability, and sustainability 

of majos weapon system being acquired today contr3xted 

to serious problems. These systsms developed by 

trPe United States have grown in sophistication, complexity, 

and cost to a point where only rciativsly h w Guantikirs 

axe being acquized. High operating and slipport costs for 

tnese veapofis campound budgetary pobiems. A low state of 

readiness can result when the systss do not work properly. 

GAO recummended ithat the Congress siiould car5fully exanine 

lower cost di-tive programs before approving new weagon 

systems. In particular, it should explore with senior military 

cffisiafa ?3e pros arid cons or' larger quantities of 

altetnative -ZIS versus smaller !umbers of highly sophisticated 

dEd -ive systems. 

--%SAOm8Qbl, J- 

-ESAD-al.-17, ,Y&xary 29, 1981 , "Effectiveness of U.S. 

Forces Can Bu measad Thtouga Improved WeaFon 

System Design', This rsport shows thak many OE today's 

mifitazy sys+m cannot be adequately operat2d, maintained, 

6f supported because *&e Degartment 02 Defense does not 

pay enough attmkion to logistic support, human factorsr aad 

quality assuzace daring tfie design phase of the acquisition 

ptocess. These problems deter the system' affectivenass to 

dele& OUI coxm-y in case of war. We mads recommendatians 

to improve the sanageaent end planninq 05 owcersnip considerations 

tnat have an -act on the effectivenees of B weapon 

systen . 

This series of re-zts has helped to generate a high state 

of Congressional and Qefgnse Degartment interest in the seriousness 

of the pfoblens discrnssed ir, the reporeo. On January 31, 1981 

the Ccmptrolfsr General. highlighted these and many other defense 

issues to the new Secretary of Defense. 

In a Parch 6, i981, letter responding t:, the ComFtroller 

General t.ie Secretary of Defense expressed support for the examinsti03 

of lower cast alternatives before approval of new systems and 

the nee2 to devote attention to the existirig inpsdiments to tedncicq , 

the ccst of weapon systeas. In addition, tSe Defksnse Depart3ent 

has initiatsd a datemined effort to zct 03 all past recome-idatiocs 

of the Congress, GAOt and others. 

we have highzighted over and over during our past work. 

examples as: 

37 

This includes many of the issuss 

Sone

-Increase 

-Slbinzte 

-ProviAe 

stability in the scquisition process 

iapedbentr; to rtducing costs 

achquate f ron-tend funding 

-Reduce administrative cost and time to procure 

items 

--Impleaent policy to desigzz-in taliability considefations 

--Proaace 

-Budge5 

--Encourage 

--encourage 

-Plan 

-%affirm 

at economic production rates 

to most likely costs 

capital investmeat tc enhance productivity 

multiyear cmtractinq 

for preplanned pzodtact imgrovements 

existing msnagement psinci3les 

. 

.A 

. ME Objectives 

Our objectives under this LOE are to (1) assure that 

Federal agencies consider the proper balance of trgde-cffs 

between sophisticzted systems and simple systems during early 

staGes of systes acquisition, (21 improve management awareness 

of the benefits to be gained and opportunities available to 

reduce ownership costs yet maintain adequate system effaczivemess, 

and (3) advise the Congress of Federal agency ~ctio~s 

taken acd additio3al actions necessary to inprove systen! effectiveness 

and reduce ownership costs. 

To accomplish these objectivss.we will obtain answers 

to the following questions: 

1. Do agency acquisition policies emphasize that 

ownership considerations are of equal importar.ce 

in system tiesign as cost, schedule, and technical 

pet f ormance? 

2. How are owntrship considerations being refiectee 

in early system design? 

3. Do Federal agencies mission need statements! 

requests for proposals, ar,d contracts contain 

_..

the language aecessary to ensure ownsrsaig eonsideraticns 

will be adequataiy addressed? 

L 

4. Are decisinnmakers being provided with accurate 

and timely iiifotmation concerning ownership 

factors (sach as logistic support and hrrman 

factors} at miljor program decision points? 

5. Is highly complex anC sophisticated equiment 

being developed without aeequat e cons ideration 

ot its iapact on the user in terms of support 

css'es acd skill levels to 3perate and maintain? 

6. During the acquisition cycle, are ownarship 

considerations being tzaded-of f in favcr of 

cost, schedule, and technical perfornance? 

7. Are systems being adequately tested and 

evaluated to ensure that ttey can be Fr9perfy 

operattd, naintained and supported when 

deployed? 

8. What addftional steps can be taken by the aqency ' 

to fzptove the attention given to omership con- 

* siderations in the design and development of 

systeIPs3 

9. Do decision and contractual documents expi4citly 

require consideration of maq/macfiine interfaces 

to reduce system csinplexity and iacreasa reliability 

arid maintainability? 

10. 1s grograni nanagement structured t3 p:ovi0e cversight 

anc! as5xe that man/ncchine interfaces ari? 

considered during development, test aild evaluction, 

by all acquisition levels--user I contractoz, and 

program personnel? 

c 

11. Is adzquate consideration given, early in the acquisition 

process, to manpower and logistic needs 

to assare development and deployment 02 effective 

systems? 

Strategy for the upcoming planning period 

Ou: strategy to mset these objectives is to develop 

answers to the abcve questions ir, fi-Je ongoing assignments. 

We anticipate that, tfter identifying ownership cost versus 

systen performance issues on these pitgram, issuing sn overview 

raport on DO;)'s progress and any further actions that 

may be needed. 

39

. 

~n important aspecr, cf the LCE is communSca%ing the 

importance of these matters to all involved. Fjitnin -0 

this will be achieved by discussions at conferences, 

special briefings for all staff members, individcal wark 

plans, and the issuance of this arogram ;?lane 

Ongoing Assignments : 

-Review of the A3-64 Helicopter/Helbfi:a Program 

(a priority #l weapon system assijnment) 

--Review 

of the MLRS 2rol;ram 

--Survey of Funding Probl2ms of Joint Servipc? Acquisition 

Programs. 

-Survey of NASA's Progrsss in Improving Project 

Management 

-Survey 

of Modifications to DOD Wsapon System 

Also, because of the importance of the work cndet this 

LOE, we will address our stated sbjactives in each of the 

20 individual systems selected for reporting Fa eaf3y 1382. 

Some expected results of the f0regsh.g aasfgrsentf is 

to identify those major program acquisitbas that have Got 

emphasized trade-off consideratians, such asr costr schedule 

and performance that could and sboubd have befn made to reduce 

ownership costs. We hope to be able to show tkat ornership 

cost can be reduced by properly structuring program management 

practices. 

Planned Assigments: 

A follow-on to our January 29, 1981 report on incre%sing 

effectiveness of U.S. forces throush *roved weapon 

system design is plamed 2or the fall of 1981. 

A follow-up review of the Air Fcrcz's N@xt Generation 

Trainer Aircraft. Li% cycle cost ccmgarisoas ate to b2 a 

prime factor in evaluatiag competing altetnatiTes. 

A follow-up review cf the jcint Air FQrCt?/NaVy alternate 

engine to provide a backup engine for the F-14 and F-16 

aircraft in the event imyovament efforts r'or anqiacs CUIrently 

on these aircraft ars act successful. 

40

LCE 3013 

LIhX-OF-E7FCRT : To what extent is the testing and evaluaciatl of 

acquisitions effectively planned, cenducta8, 

repxted, aizd cacsidered in decisionmaking? 

And, what is being done in CTE snd UTE to 

insuse that reliability, availabilit-1, 

saintainability and human factors have been 

zdequtefy considered? 

MAJCR ISSUES 

Easn year the Congress must decide whether to aukhorize approptistions 

fer the initiation and continuance of Govermerrt 

psograns to acquire system and accomplish projects. As a result, 

each year the congressional oversiqht commiztees are intelesteci 

in whe+her the pezfazmame of systems under developnent or being 

acquired are meeting expectations. Problems disclosed by testing 

frequently give the first indication of a system's inability to 

accoaplish the purpose for which ft is being developed aad th= 

potestia3. for cost ovetruns to occrr. 

(-1 

fc the years preceding our current plan; GAO pertfcmd 

enough work in this ar%a.to designata it a non-PLOE. Our 

existing plan cited this. We believe it is appropriate to 

highlisht it once a$ain but with a new focus. This new fecp 

is deemad necessaq becduse of recenz emphasis OE tile deployment 

of highly complex systems which say be uslreliable, difficult 

for military personnel to maintain, fail to enhance our miEita~,r 

capability, and add to Defense's laqistac burden. 

The two major types of testir,g are devslqrnent testing ami 

sgeratiaraL testing. Development testing is carried out during 

the 6evelopment phase to disclose problems and zisks o-arly in 

the acquisition cycle when cefrective measures can bz'nost easily 

and econdcallly undertaken. Prcblcms Sisclosed by developneat 

testixg should be corrected and risks shodld be minimized befar= 

proceeding into a mare advanced skage of development. 

Operational testing, on the other hand, is done ta deterdne 

whether a project or system can perfcrm its intecdod function 

under representative operating eonclitior?s which simulate thoss 

-de= which the system would be used. X t . i s to be done by a 

different Grganizati.cn than the one that does the developmsnt 

tests. mile the system may meet technical specifications as 

previously demonstrated during cievelopment testing, irs effectiveness 

i,? its operational enviromsnt could be doubtful because cf 

factors such as changes iz now it must be usee in the field. 

Consequeitly, it is essentia?, that realistic operational testing 

be petfomed before a ?rodr?cticn commitment is reade. 

41

Tr exids t cwar ds meting r el iab il it y , avail ab il i. ty , =air+ taina- 

bility goals, an3 human factors consideratians are iqortant 

in testing. In a drisre to comgensate for :iumerfcal infarIcrib- --2 

ia relation to potential adversaries, DOD and ths ezrvizes ha*?e 

passhed tschnolagy to the liiuit in an eifort to dovslop deapcm 

systems with superioi: aperational capability. One rzsuft of this 

emphasis on performance has been the depluyment of highly cem?%ex 

systems which are less reliable thzn desired, and difficult for 

,Field 2ersormel to rairitah, Bseause cf these raliability and 

maintain*ilFty (RsH? problems the new systems fail to enhance 

the combat power of using units to the degree expected and add to 

the units' logistics brlrden, 

In recent raviews we found khat these problems occur because 

during the acquisitioc cycle the services ttadeoff R&M in afi effort 

to achieve cost, achcaule and performance goals which they consides 

to be more important at the time. fn addition, in a revi=w we are 

now ccmpleting we found that the services do not have adequate data 

baszs and methodologies for establishing rzalistic Rsll goals, testing 

to aetrrmina if the goals have been achieved, or analyzing and 

reporting test results to decisiomakets. 

DOD has become increasingly aware sf the consequences cf this 

under eDphasis of R&M. As a result, during 1980 it issued its ' 

Tirst RLM directive (5000.40) and added RLM related requiremerts 

to its directives on major acquisitions (5000.1 end 5000.2). 

ACZIEVEMENTS SN T9E LCE UHDER 

TEU EXISTING PRQGRAM PLAN 

Cbjectives under the existing plan 

Our objective under this LOS was to provide the Con5ress 

with an indspendect visv of the results of tests of system 

performance. Specific quastions to be asked were: 

1. \?ere test objectives defined ar.d dosumented in a test 

p.1 tn? 

2. Was sus'ficient testing planned and accom?lished to 

permit accurate evaluation OE systes performance 

durins both the development and operaticnal test . 

phase? 

3. Are test fa=ilitios and conditions adequate? 

4. Is operational testing sufficiently ineependsnt of 

development testing as directed by OflB Circular 

&log? 

42 

-', 

*J 

d' 

r? a

5. 

6. 

7. 

8. 

Did the tests perfarmed identify areas 32 tbchnisel 

risk? 

How well !?ere test objectives met? 

Were operational tests consistent with the mission 

and environment cnder which the system is tc partorm? 

Did opecttional tests include tes4ing with associated 

weapons which complement the system? 

L' 

9. 

10 

11 . 

120 

13 


Will sufficient test data be available to support the 

next progreas milestone decision? 

Were all test issues resolved before comaitment to 

pt od uct ion? 

Was the systam petformsnce during tosting xnsistent 

with information presented to the Congress? 

6s the manaqenent of development and ogetational testing 

at the appropriate level? 

Me the plans and priorities of joint testing efZectiFe 

and timely? 

This was listed as a non-pticrity LOE in our existing Flen, 

We ggopsse to consider it again but with emphasis an the reliability, 

maintainability aspect of testing. Thc pZoFosad revised 

objectives arid sptcific questions reflect this mphasis. Our 

expanded objective and additional questions to be aswered are 

shown below. 

WORK REMAINING 

UNDER THE LOE 

LOE: Obj ect ives 

Our objectives tlnder this expanded LOE are to (1) provide 

the Congress with our indepancient view of the results cf tests 

and system performance, (2) determine whether adequate attention 

is being given to reliability, maintainability; and opetatility 

in DTE and OTE and (3) evalliats the sffeztiveness of the DCD R&H 

directive and the adequacy 05 its implementation by the ~~?r-~ices. 

The specific questions to ba addressee in achieving the oojectioes 

are questions 1 tbrQugh 13 above plus those below which center on 

the RLM aspects of testhg. 

43

. 

1. 

Were realistic goals dcvelooed for system performance 

at the beginning of =he acquisition zycie? How were 

R&M goals established? 

2. 

3. 

4. 

5. 

Were test results acd ualyses clearly rsported and 

considered in decisiomzking? Eid the results change/ 

modify the course cf the acquisition? Were trade-off 

analyses made? Is RLM being trzded-off in favor of 

cost, schedule and performance? 

Did the tests perfowed identify areas of technical 

risk? To what extent did management consider ->-e 

technical risk? Action taken? 

Concerning the R&D regulations recently issued 

by the Semices, does it adequately hpfement tke 

DOD R&M directiv%? 

Do test objectives provide for testing end evaluation 

of man/machiae interfaces inclGding evaluation 

of skill levels needed? 

Strateqy for the upcominq plaauing pericd 

In a recent letter to tke Secretary of Defense MASAD 81-25, 

March 31, 1981, GAO said “&at Defense has taken aczion designed 

to rhise the level of attention 3ivea to F&M ceasiderations. 

issue now is implementatiozi, and.-determining whether the qualLty 

and timeliness of R&M data is *roving. 

Our strategy duridg the next 18 months will bs to empnasize 

the R&M aspects of testing &!rir,g our revisw of specific weapon 

systems. To accomplish the cbjectives undzr this LOE we p2.a ta 

select future assignments on specific systems that should be or 

are undergoing RBM testirg-answering th qcestions uridzr this 

WE. Hopefully assignments under this LOE will provida suppart 

to begin an assignment which would allow us ro evaluate the grerall 

effectiveness of R&M directives, the adeqdacy of Implementation 

by the Service’s, and to make recommendations for improvement. 

Onqoinq assignments 

--Review of Nuclear Effects on Major Weapon Systems 

--Review of M l Tank Testing 

From the foregoing assignments, we expect to denionstrate 

that adequate emphasis is not being given to the implemsncation 

of existing directives which were preoared to insurp, ac-- 

captable reliability, maintainability and operability of 

major program acquisitions. 

Planned assiqnments 

--Review of LAMPS 111 helicopter reliability and caintainability 

testizg 

me 

i 

44

LOE 3314 

> 

LINE-OF-EFFORT: 

MAJOR ISSUE 

Does plannine; for major -acquisitions adeqzatrly 

consider potential critical material s'hortages - 

on system coat schedule and perzomance goah? 

(Sze Appendix fII far relatlcnsksip of this LOE 

with EMD fsace area.) 

Orderly acquisition of major systems, particularly t:iasa 

employing aerospace tmhn~logy.~ will require suc=essfr;ol mznagement 

of critical ateriaas and other produe"cion raodblocks sue& 

as special metalt, ltrge forgings and castings, machine capacity, 

and electronic ''kits a d pieces". 1% not addzesssd affectivofy, 

systems beins acquire6 will be subject to: 

-higher dsvelopment costs required to ideatf2-y.. davelap ad 

prove substitiate materials svailable dornesticaliy or from 

allied nations; . 

--performaxce and reliability shorkfalls attributable t o 

inferior, but =re available, materials: and 

--lengthened deli7ery schedules due to mate.cia!. shartages 

or other Froduction cdkraints. 

U.S. dependepss on foreign so'zces for SQPR~ critical materials 

has reached the -behe of alann. Drrven by d-9s far Setter perforace 

the U.S. hcreasingly relys upon the superior prqerties obtained 

from czil-ical aterial used in high tecknclogy system. 

Limited .U.S. industrial capacity in several key seetors ccupled 

with high competing cGmmescial dexands has slowed ths delivery of 

system cornprierits. Production lead tims and deliwry schedules are 

lengthening. 

WORK PLANNED UNDER THIS LOE 

Objective under this LOE 

Our objective for this planning period fs to assess how 

agencies responsible for developing and acquiring major systeras 

kfe dealing w ith potential shortages of critical materials. 

Once this is detannined we want to assess the adequacy of tkese 

actions and i2enti.f-f additional correctivs actions. 

Specific questiorrs to be addressed uzder this LOZ include the 

following : 

I. What critical materials are and other prochction roadblocks 

considered most vital to current and futura 

defense technologies and systeas? 

c 45

2- Has the agency assess&. current and future critical 

mtetials needs and ether production cc.nstraints for 

ongoicg and aroposed programs and the adaqclacy 02 

res6urces available to meet these needs? 

3. What agency criteria exist or are planned ta aid in the 

use of critical materizls? 

1. How has established solicy affected agency efforts to 

deal witt critical matafials imQort dependency? 

Stratqy for the upcoming plaming period 

Tais is a now L3E and our strategy will be firmed up as we 

tieveiq a bettez understanding of the problems involved. We plan 

to mzt very closely with the Energy and Minerals Division in 

ordez to capitalize bn the work already achieved. 

Critical, materials are used in a wide range of high technclogy 

prodaces having both defense and commercial ap9lications. Our 

fob- will be on (1) majot defense acquisiticn management inieiati-res 

in place or planned that address critical material dependency alteznatives 

and (2) selseted major acquisition progzaus tu determine west 

amz:.oashes are being ,used, their effectiveness, and the pottntial 0’ 

altezmative actions. Both industry end Gaoernrrent strategies will ) a 

be ertmiraed and analyzed to clarify basic issues and find Tiable 

sokatioas 


Shce this is a new LOE we have nc assisnments ongoing. 

PLauned assigment 

Survey cf the impact of critical materials availability on 

najor weapon programs--Cost, Schedule, and Performance.

AREA-3F-CIQNCEXN: Be+e&xle &&e effectivea2ss a2 the makagemeat 

strategies csed by Federal agencies fer the 

development z d acq;lisition sf major program. 

QMB Circular A-109, "Major Systems Acquisitiom" prescribes 

policies to guide aJ.1 Federal asencies in maaging their major 

system acquisition pzograms- Tke g.sideli-.es sro designe2 to 

affect ail phases 05 the acquisitiorr! cycie frcm analysis of I&- 

sion needs through production. We believe it to be of utniost 

bportance t? monitor Federal agencies progress arid to eualuzte 

whether agplicatfons of policies is being doae in an efficimt 

and practical me?. I+ is also hperativc that we evaluate 

the. isfamation ueed to select specific aeuuisition stratqies 

aad determine whether the ex3ected advantases of adhering to - 

that strategy are achieved. 

0.a~ objective under this area-of-concern is to idectiAy 

areas where an agency can take actions to bprove the cxrrent 

acquisirior, management process, practices, af-dl strategy it uses 

to insure that major acquisiticns are affoMable, cost effective, 

available La ;Pinbum the, acd 3gerauonally suitable. 

By using the follmislg 4 lines-caf-effort over the next 

18 m0~th3, we expect to surface identifiable changes that 

could hprcve the effzctfveness of the aqenrry's Sevelopment 

and acquisition of major systa. We plan to accomplish this 

by evaluating co-liaece with A-109, use of mU.+-i-year con= 

tractisg, use of product drovemeat efforts, aiid casperative 

developments wiA& foreign countries. We believe that monitoring 

thsae zrzas will enable us to *.cove agency managemefit 

of major program acquisitions. 

Four lines-cf-effort are proposed under this zrea-ofccncem. 

. 

--What has beer, the impact of OME Circular A-139 

an acquisitior, _orograms in terns of helping 

Federal agencies acquire systems which are afeordable, 

satisfy the need, and which %re avaaleble on 

time? 

--Is the Defense Department and its componeats 

reqcestinj nu.Lti-year contracting authcrization 

47

-. , 

for weapon systems whsre advtntageous to the 

Goverment and have tae results been beneficial 

to tha Government3 

--What has beeo *he impact: or potential inpact of 

acquisition strategies such as Preglanned Product 

~rovements which pnvide for planned efficient 

growtk i?3 cepabilities? 

MEOW is the development and acquisition of mjor 

program affected by cooperating with foreign 

countries in the development, produztion, ar sale 

of systems? 

48

LOE 3c15 

LIXC-OF-€F2WRT: What has been the impact of CM.3 Circulzr A-103 

on acquisitioa programs - - is tens of Selpinq - - 

Federal agencies acquire systems which 2.m affordabfs, 

satisfy the need, azxi which are 

available on time? 

MAJOR ISSUES 

In April 1976, L%e Office of Federal Frocuzement Policy of 

OMB issued Circular F ~l09~ a policy doc-ment, to hcplarent the 

recumendations of the Canmission 03 Gove.zrm.ent Procuremeat . 

Am109 grescribes how major civil project3 and 6efensa systems 

should be acquired. Tne circularas guidelines are designed to 

affect all phzses of the acquisition cycls from analysis ~f misdon 

needs through the construction or pmduc+Aon ghase. It also 

grovides for sarly communication to the Congress of the aqency's 

major system requiremeats. 

A-109 specifies key 6ecisions and outlhes the sequence 

of activities ia the major systen acquisition process. It also 

provides agencies with flexibility in determining how they will 

meet the re&zexnents of the cizcular. 

Sn view of the magnitude cf Che Fcdesal Invesknsnt in 

major systems and our support of both as recornendations of 

the Commissian OR Government procurement and the intent 02 A-109, 

it is necessary that trve continue to evaluate (1) agency progress 

in impleizenting the A-109 policies ar,d (2) the impact 92 those 

policies on agency acquisitions. OMB Circular A-109 was issued 

over 5 years ago and while some agenehs have made steady progress, 

others 'Eve been SLOW to jsnplsment the 8irective. Nora 

recently the impzct that the directive has had ca lengthening the 

acquisition process has corne into question. 

GAO kas been respansi3le for Iceepiag A-109 in the forefront 

of esecutive agencies involved in the &cq-dsitio> 

of major civil and defense prtrgzams. We have reported to 

Congress and agencies that implementatfon has been spotty 5ut 

progress is beiag made. 

More recently, G.0 expressed its feelhqs about a possible 

undermining of A-109. On March 3, 1981, the Comptroller.Genera1 

sent a letter to the Ijirector, OFfica of Managuaent and Budger, 

expressing ccncern abut a nomenturn bci~g built in csome quarters 

of the Execctive Branch tc set aside the A-109 Circular. It is 

our opinior, that such a momentum, if not stopped, coulr? negzt? 

the impact of policies which took years to Establish an5 implement 

49

Objectives under existing and prcposed plan 

Our objectives under this L3E ar3 to continue t6 (1) 

evaluate agency implementation pwgressr such as the extent 

to which agency instructions are translated ixto srganizatianal, 

changes and (2) where agencies have ircerpcrated, A-109 

policies, evaluate their impact an terms cf affordability, 

timeliness, program results, and adherence to instzxctiens. 

The specific questions to be addressed in achieving the 

objectives under the existing ar-d prososed pl&n are: 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

a. 

What have agencies done Li detsrmi+aing their needs 

to ensure that the highest priori5y major system ncgds 

are identified? 

Has the consideration on issues sLch ns.nesc2 and affordability 

early in the cycle helped to reduce false 

starts and provide more pragram stability? 

What evidence is there *&at A-109 has leagthened or 

shortened the acquisition time for major .+cquisiticss?- -. 

What procedures have the agencies established t~ 

identify whether their capability to accaaplbsh 

their mission is in need of hprovment? 

What steps have been taken to coordinate missian 

analyses where joint or related missicns are 

assigned to two or more agency components? 

What has been done to complete agency hplenentation 

of A-1091 

What are the agencies' assessments of A,-109 in =anaging 

the acquisition of major system? 

Has the milestone zero review of the need fer a Eel-! or 

improved capability brought a sounder basin for cew 

system development and acquisitioE prograns? 

Our recommendations have bean and will contime to '0s 

targeted on improved implementation or alternatives in policy 

to achieve stated goals. 

50

Results Achieved 

The completed and on-going work discussed below shows our 

progress in addressing questions 1, 3, 6, and 7. Emever, we 

plan to continue to emphasize these as well as address question 

2 and 8. Questions numbered 4 and 5 relate to mission 

analysis are deleted from this plan and will be addressed in 

wsrk sf the Mission Analysis Subdivision. 

GAQ bas reported an the changes needed in agency practices 

and procedures for detedning its needs consistent with A-109 

principles. GAO has issued the fellowing reports. 

"Obsesvations of OMB Circular A-109-Majer Systems 

Acquisitions by the DOD", (BSAD-73-9, 2/20/?99. 

As a result of that report, DOD revised its basic 

directives to increase management visibility over 

ongoing programs, and increased the program 

manager's authority. 

"Implementation of Major System Acquisition Process- 

A-l09--fs.Inconsistent Among Civil Agencies", (PW- 

79-89, 8/14/.79). Agencies agreed with our report and 

initiated action to place a high gPieHity on implementatfern 

of A- EO^. . 

"FAA Has NotGone Par Enough With Improvements To 

Its Planning and,Acquisition Process'*, (PSAD-80- 

42, 6/4/80). As a result of this report, the 

Department of TranSportatioR revised their directive 

on major system's acquisitions. FAA also 

revised its directive. 

A GAO letter to the Director, OMB dated March 3, 1981, 

expressing concern about a momentum building to set 

aside A-109. As of March 31, 198% no reply had been 

received . 

WORK REMAINING UNDER THE LOE 

LOE obiectives 

The objectives and specific questions of the existing LOE, 

remain valid for our proposed plan. 


During the next 18 months we plan to maintain our position 

df responsibility for keeping A-109 in the forefront of executive 

agencies involved in the acquisition of major civil and 

51 

.

defense programs. Our plan has been and will continue to be 

targeted toward *roved ageiicy implementation or a1 terxatives 

in agency policy to mzet -+&e requirements of Circular A-109. 

We do nGt have a cookbooK or step-by-step procedustl approach 

to A-109 and view the circular as a ,plisy guidzliae for major 

acquisitions with particular action to be taken wha they m1:e 

sense . 

During tke next 18 months we plaza to (1) follow-up on 

our previous reports and (2) monitor other agency inplementatisn 

progzess. Our ongoin3 assignments, listed below, 3upports 

this plan. 

Cngoinq assignments 

We have five ongoing assigrrments which will address the 

specific questions under this LOE. 

--‘aprovunents Xeeded in the Management of :he 

tion of Xajor System, Department of Energy. 

Acquisi- 

--finpact cf A7109 on Weapor, System acquisition 

(951578). This assignment wall follow-up on 

. our previous report (PSAD-79-9). 

--Improvements Nsedet in Acqcisition of Rail Mass 

Transit Zquipment, Separtment of Transportation. 

--Survey oi UMTA’S AcquisitLon of a Commuter Railroad 

Tunriel ia Philadelphia, PA. 

--Survey of COD’S Affordability Policy 

Some eqected results of this work incllrde a strensthaning 

02‘ the roie of project managers at DOE as well as th= 

preparation of batter data to scpport their niajor acquisitions: 

we eqect to identify obstacles to fu-zther hplemefiting A-109 aad 

propose actlona leading fo further strongthenin9 of Defssse 

bizectivest at the Departxtent of Transportation we expect that 

in order to insure that Federally funded transit projects meet 

their intended goals -3. objectives, DOT may (L) develo? 

criteria that nests ONE standards for certifying the psocuremant 

systems of grant recipients and (2) review and cer%ify 

transit auzharity procurement systems as a cozdition for 

3rznt award. 

Planned assiqnmeats 

--Survey of rhe Ccast Guard’s Efficiency and Effectiveness 

in Acquirizg Major Svsttms. 

52 

. 8 .

IPS ANNEX B 

RESOURCES - FVNDING PROFILE 

toollaro in Millions) 

Mar 19. 80 

5000.2 (Annu B to Encl 4) 

Annex to be completed for each alternative: 

1) In Constant (base) year dollare 

~. . - -.. 

2) In Escalated doII8ro uomg current 

ryOP rates and ground rules 

Wquioition Quantitlea to be Procured 

Developnent 

Production 

Deliveries 

I 

I 

FY 19- 

PRIOR 

FY 19- 

_I_ 

FY 19- 

‘Y ‘9- 

- 

WTAL 

PROGRAM 

DEVELOPMENT PHRSE 

RDTCE 

validation Phaee 

Full Scale Development Phage 


TOTAL RMCE APPROPRIATION 

UlLCON 

OCU 3 

HILPERS 

TOTAL DEVEIDPMENT PWSE 

I 

PRODUCTION PHASE 

PROCVREMENT 4 

systsn) cost 5 

Flyaway, Rollaway. Sailaway 


Initial @pares 

Other bins Item Procurement 6 

TOTAL PROCUREMENT APPROPRIATION 

MILCON 

OSM 3 

MILPERS 

TOTAL PROWCTXON PHASE 

OPERATING AND SUPPORT PHASE 

MILPERS 

OCH 

Procurement 7 

TOTAL OPERATING MD SUPPORT PHASE 

I 

I 

1 I 

Apply footnotes as required to explain the chart. Adjuetments to forkat are authorized to accommodate program: etub entriee vi11 be 

decided on at the initial Xllestone Plenning Meeting. Definitione should be in accordance with DoD Instruction 5000.33 (reference 

(u)). Uae 8. many columns as neceaeary to shov every year of acquisition funding and operation end support funding unLil eteady 

#tote operations are achieved. 

3 

Identify the number. of Development and Production unitb to be acquired by fiscsl pear. 

Other Life Cycle related cost8 (i.e., Installation, Project Manager Office, Civilian Salaries. etc.) funded by other appropriations: 

c.g., O6H end MILPERS durirg Development and/or Production phare. 

4 Enter the costs by appropriation; e.&. , Aircraft Procurement, Hissile Procurement, Ships Construction Navy, or Other Procurement. 

If mre than one applies, identify it eeparately. 

5 Equal to Weapon System Cost as defined in DoD Instruction 5000.33 (reference (1111. 

6 Production Bene Support (Industrial Pacilitiee), shore-based trainin8 facilities. and other eyetem peculiar coste identified aa a 

separate line item. or as a portion of a eeparste line item, in onother part of the Procurement Budget. Identify the content 

7 

of this cnery. 

Procurement costs sesoc!ated with operating and owning a veapon syetem such an modifications. repleniehment eparee. ground equlpment. 

etc. 10

- 

b 

- 

- LIXE-OF-EFFO3T: 

MAJOR ISSUES 

L3E 3016 

How is ths devciopment and acquisition of mjor 

pragrems affected by cooperating with foreiqn 

countries irr the development, producticn, or 

sale of systems? 

(See Appendix fII for relationship of this 

Log with the ID international affairs issue 

area. ) 

The United States has traditionally relied ueon it.s own development 

and productLon capability to Gtovfde for its military 

equipuent needs. Rarely has it acquired foreign de-JePoped systems. 

At "chi3 the, howeve:, conventional weaaorzs have became 

very costly and very coreplex. For ths United States and the sther 

North Atlaatk Treaty O$ganizatio?l (NAT3) ccuntzieu the qcestios 

becomes on2 of how to struGture veapo.1 system procurements to gain 

the best miLiLw msture a d the best scondc benefits by all 

particigats. Approaches inclade ccoperative develqment and 

arodustion or unilatexal developmen+ and productiorn of systems 

by specific na,tions fcr IGTO-vide purchase. Cooperation in 

achieving a strong conventional gostura ik- cutlined irn the :day 1938 

Long Tern Defense Plan endorsed by all +he XATO defense ninisters. 

The Long Term Defense Plan is a blueprint for bath 

national and NATO-wide 2lanning to faciLitate greater ccoperation 

amcrnq NATO allies for the standardizakioa and hteroporzbi1it.Z 

of weapon systems ad to design machinery to identify 

2nd implement programs to tfiis end. Efforts recammended or 

underway by X D in support of the plan incLude hamonizinq af 

military requiremeslts, aegotiatiag bilateral Mexctrandtlms of 

Unaerstacding to remove nationa: restrictions on defense 

trade k?t! cooperation in milftsry research and eevelopnreat, 

encouraging &e establishment oL du3l proluction lines for 

weapon systems, and coordinating of long-term developmerit of 

weapon systems through a I' f amily-of-weapons " arracgment . 

ACHIEVEMENTS IN TUE LO4: UNDER THE 

EXISTIXG AND P3OPOSED PROGRAM PLAN 

Objective3 mder axisting and proposed plan 

The LOE oSjectiv5s of the existing ~ lan remain valid 

for this Flan-to identify the impect cooperative efforts 

will have upon U.S. nilitary eifectiveness and prerogatives 

the iongrass lrsually has under unccnstrained acquisitions. 

S,oecifi.c queatioas to be addzeasad in achisving the objectiv-. 

art : 

53

1. 

2. 

3. 

4. 

5. 

6. 

7. 

How will U.S. weapon costs be affected by the 

family of weapons concept? 

What effect will implementation of this concept 

have on the U.S. technology base? 

What are the prerequisites for successful 

cooperation under the family of weapons concept? 

How are U.S. acquisition management practices 

affected when a foreign country takes the lead 

in developing joint programs? 

Are cooperative production efforts with our allies 

compatible with U.S. competitive contracting procedures? 

What are the dlitary and economic benefits a d 

liabilities resulting from family of weapons 

cooperative efforts in NATO? 

What effect do cooperative arrangements have on 

U.S. procirement policies such as ~-1093 

Results achieved' 

In 1979 (PSAD-79-13) we evaluated benefits,and drawbacks 

of the F-16 coproduction and found that it appeazed 

to have produced support for additional NATO cooperative 

programs. Later that same year (PSAD-79-26) we found po1i"iicsl 

and industrial impediments to transatlantic cooperation. In .= - 

March 1981 report (MASAD-81-17) on codevelopment of a rnway 

cratering munition (JP-233) being developed in the United 

Kingdom we found that deviation from DOD acquisition policies 

was costly. In our report on Theater Nuclear Modernizakian 

MASAD-81-15, March 2, 1981, we reported on implicatiors resulting 

from deployment of two new missile systems in Susope. 

Our two 1981 reports, both of which had intense ccngressional 

interest as the work was being conducted, have already 

received considerable attention in the press and by the Congress. 

We expect more discussions during the FY 1982 authorization and 

appropriations hearings. 

An International Division report on arms export control 

(ID-81-18) dated January 19, 1981, discusses the conflict 

between U.S. policy of controlling exports of military equipment 

containing U.S. technology and the desire to increase 

development and production agreements with NATO allies. 

54 

. . ~ . . .. . . . 

- , 

. .

We have found support for additional cooperarive program 

yet there are poli-kical a d industrial impediiients to coogeration 

in tbansferriiig aevanced OecLzoloqy a d foreign intiust-ry taking the 

lea6 in system devefupmen". There are aiss acquisiticn managsmant 

problem for X D when the U.S. fails to adhere to its acquisitian 

mana5ement practi- '-2s. 

Strateqy for the uucombq planninq period 

For the nezt 13 months we plan te contunue to exanine the 

basic issues relating to U.S. partisipation in the dzvelopment, 

FrOdUCtLORr and sale of weawn systems. Because of the prelimina*q 

nature of' o u previous efforts we believe corztiuued 

work on the questions to be addressed under this W E is 

appropriate. 

Ocqoing sssignmsnts 

--Review of thr Navy's Advanced Light Weight Torpedo 

Pmgrpam including the British Sting Ray Torpedo. 

L 

--Review af the Arsy's Pershing Missila Program for 

use in TNF mcdebaizttion. 

Fltnned assignments 

--Family 

of Weapons Concept 

--U.S. In.%&btives to Acquire Foreign DevsLooeB 

Systems 

--Follow-cn work on the Air Force crateriag munition 

(JP-233) 

We expact to be able t3 show that thers are uniqae complex 

acquisition nanage~zent problems when C?3D parzicipates in coaperative 

devzlopment and/or production' agreements with fcfeign 

countries. Fuzther, there ms.y bt political and Icdustrlal Fqediments 

to international agreements concerning the develcpment, 

producticn, dr sale of major weapoa systems that Freclude making 

agreements for zertain tacfulologies. Also, we expect to be able 

t3 dsterminc whether foreign industry is capable 32 de.rel.oping 

system to meet U.S. needs-does harmonization of rcqdircments 

effect U. S . military eqiipment parforxance? 

55 

. . . . . . . . - .

ME 3017 

I' 

LI,XE-OF-EFFORT: 

MWOR ISSUES 

Is the Defense Department and its ccrnpnects 

mqxestfng muitiyear contracting authorization 

€&r veagcrn systems -here concidered advsnta3eous 

the Gavesnnent a d heve the results been 

bs&ici.al to the Gmexrment? 

The GAO, blsasrp.rsiodly anointed Commission on Govarzment 

P=ocursnent, a& -s iscludlng ia-~olved agencies, have admcated 

-greater use of mfiyei!tr contracting by the goverraent. phe 

Cepartment of Def-e and the Office of kanagement an2 Budget 

have indicated supart 05 this concegt. News media articles 

rsport the adnhbtza tion plans to experiment with buying weapoas 

with long term o n Mch wculd invo1-7e multiyeu contracting. 

Major weapon system prograas cffer the pctential for considerable 

savinss by using ddyear contracting arrangements. These programs 

often cost billions ef dollars and their develapmeat and procurement 

spans 8-12 years or mor-=. Each of the contracting-phases of weapon 

systems acquisitiorp. my span a aeriod sf years, e.g., 9monstrationl 

validation 2-3 psacs. fa-scale development 3-7 years, and procurement 

3 yeass upzmjs. All phases are car;didates for cost savings 

through the use csf dtiyear coatraeting. Administration OI'I'icials 

- azgue that Xongtm contracts for eqiipment could reduce'spendirg . 

10-20 percent per udk because pinae contractors would be able to 

maiatain stable t-Ationships with subcoctsactar and material suppliers 

over 109s periods. We believe the estimated savings ranze 

is reasonable. 

In view of the magnitude of Federal investment ir, acquiring major 

weapon syst-, znd ax support of Eubtiyear contracting a3 a better 

way to control and lessen the cost c.f such procurement, it is necessary 

that we nake a continuing assessment of kke success or failures 

of this form 05 contracting. 

WOEX PLANNED tTNI?EEL T3E LOE 

a 

3 

LOE objectives 

Our objective Zor the next 18 manths is to determine the 

exten2 of mu1tiyea.r contracting beiag used, potential apFlicatioas, 

and the detriments and/or benefits beinu experienced as 

a result, together with any recommendations He couid make for 

furthering this strategy. Specific questions iro be addressed 

in achieving this objective are: 

I. Whzt pragAw are using multiyear contracts? 

. 2. Bave the overall advantages and disadvnntqes 

of multiyear contracting been considered? 

56 

. 1.

3. 

4. 

5. 

6. 

7. 

* a. 

Eave the various m e of cor,trasts been Srougfit 

to ths attention cf decision makers during the 

appropriate phase of tht acquisition cycle? 

Ea% an acqdsition strategy on contracting beer, 

developed? What is in? 

mat advzntages would have occurred if muLtiyear 

ecntra- -e used? Detemine where it would 

be advaataqeous OP disadvantageocs? 

Can a &-end 31e established where mltiyear cantracts 

for speci5c acquisitions =e advcnrageous 

to the Gavernmene? 

What am= the impediments to zultiyear eoctrac%i,ag? 

Directives? Regralatians? Au-~~tization/Apptoprictions? 

What are MID'S plam concerniag r'uture multiyear 

contra-? Abe they establishing criteria for 

future acquisitions? 'What are the criteria? 

Strateqy for tbe updng planninq period 

This is a new LOE on a subject which wild. receive cansiderzble 

atteEticn mer the next several years. As with tha 

other newly es+%tbLished LOE's described in this piap, these is 

a learning proccss invobved. We plan to develop zn expertise 

through attendance at ageacy or 2xdust-T meetings ar,d trzrrshr 

this knowladqe to GAO staff at ocr confersnces, briefings, and 

work plans. While rm reports have been issued, our position 

was pzesen2ed 131- the Director, MASAD, in testimany OF, November 17, 

1980 and tlarch 10 and 31, 1981. 

Initially we ;?Ian in zalendar year 1961 to candust a s:a;wey 

ta deternoise which major MD acquisitions are using rnultiy- mar coat=ac%s. 

%n that sumey we plan to to answer the above questions 

zmd to identify which major aequisiticns wculd benefit from multiyear 

coctracts. We believe that our anma1 individual acqiuisitioa 

program assigaxnents will contribute to this LOE by identifying 

potential applications. 

P lsnned assigrsents 

Posential prcgruns identified as Likely candidates by 

DO0 for multiyear contracting include the Air Force's cruise 

missile, F-16 ZL-craft, and satellite grograms. Our survey 

would use these, and others, as a means to Cevelap the objectives 

stared for the LCE. The potential :or sizeable dollar 

savings and mor2 timely acquisition are two 3ress we expect 

to highiight. 

57

LOE 3015 

LSKE-OP-EZFOEtT: 

MAJOR ISSUZS 

What has been the impact or gc>ter,tial inpact 

of increased us8 of acquisition strategies 

such as preplannac prodE.tt improvements which 

prov5de for plaisned efficient growth in 

capatibi'cies 7 

Afmsst every major program gpows in capability and 

experiences changes in cenfigura%ioi. Furtherp these modifications 

kave Secome increasingly inportant and ewensive, 

partictila.rLy to tfie Department of Defense. In fact, DOD 

expects fev aew program starts duriq the 1980's. Irstead, 

eqeciatlons are that big hprovemeats b electronics and 

ordnance wiil cause many rmdifications to major weapon 

systems. This trend results frm a number of factors. Major 

DOD weapeix systems like.aircra,Lt and ships have 20 to 30 

year s d c e lives, but changes ia +-eats anC technological 

ixqrovements change very frequently, every 4 to 8 years. !Thusr 

~tp to a point, evc3lution tnrough produst improvement may provide 

a more cost effective means of -rovxig capabiLitias than s w - 

ing nev grwams. 

'I. Planning for modifications eazly in the ccquisitioa cyclecan 

make th=se changes easier and less costly. Flaming for 4 

gr- and chanqe includes Uxlg provision fer future computer, 

space a d weight needs, developing standard architectures zna 

subsystem iaterfaces, and developing modular desips. Early 

pSanniPg €or these features translates into earlier availabiliky 

cpd e-ced mission accomplishme,?ts. 

WORK PvSANUED UNDER THE LOE 

LOE objectives 

Our objective =der this new LOE is to surface specific c3rrectiue 

actions that could be taken during the acquisition process 

to plan for future Mrovement modifications. To acccxplish 

this objective we plan to determine (I) the extenk of agency cansideration 

given to planning for future major modificaticn of 

systems early in the acquisition cycle, (2) tSe amount of glaxming 

ahead for modifying existing systems and, (3) the effects this 

planning has on costs and availability. Specific questions to be 

addressed in achieving the objective are: 

1. Is pclicy guidaner adequate to insure that 

Flaxning for oysten changes/modificatlacs is 

performed early in the acquisition cycle? 

2. Determine whether early planning for change 

is feasib1e.h all major acquisitions? 

58 

, 

\

3. 

4. 

what expenditures/financial obligations are 

required early in the acquisition precess to 

adequately plan for later changes? What are 

the expected benefits? 

Can agencies do more to make provision for 

and expedite modifiying a system throughout 

its service life? 

5. 

6. 

Bo acquisition strategies on new systems 

incPude requirements for contractors to 

design systems with ease of replacement 

and upgrading of subsystems in mind? 

What are the organizational barriers to the 

early planning.for modifications and are 

there ways to overcome them? 


We plan, during the next 18 months, to address a%l, six 

questions, however, emphasis will be placed on questions 2 

and 3. We cPutkerntly have an assignment on a "Survey Qf 

Modifications to DOD Weapon Systems". When the,susvey is 

completed in August 1981, we will be able to assess whether 

our objective can be met and to evaluate our progress in . 

answering the questions under this LOE. 

Planned assignments 

Further assignments being considered are on Naval surface 

ships and on Air Pores and Navy aircraft acquisitions. 

59

AREA-OF-CONCERN: 

Determine the adequacy of tecfino1og:t 3sse 

activities to support developent of rajas 

programs 

a 

Technology base activities encompass the earliest phase of 

the acquisition processI including basic and applied research 

programs. Basis research krovides the fundamental kmwl.adga 

from whkh new technology csn be developed. Applied research 

attapes to use this knowledge to develop and test *&e ZeasibilLty 

of new technological concepts. 

The technology base prograrcs wftfiin DOD, Department of 

Energy (DOE) (Weapons), National Aeronautics and Space Adeinistration 

(NASA), and other agencies provide the Zoundation upon 

which rests our future national security and technolagicak 

leadership in weapons, space an6 aeronautics. The developzte,-rt 

of new systems containing the latest state-of-tkzpazt iicpr~vzments 

require a continuous flow of basic scien*dfic hiosl&g= 

and innovative technology. * 

The Federal Government has investsri heavily to develop and 

maintain a strong technofogy base. This base is compriasd of 

numerous Government-owned and o_perated labora%ories, federally 

Eunded contractor operated research centsrs, the DOE wecpcns 

complex, non-profit research insfitutes, acaddc inskitutiorrs 

and private industry. 

The fiscal year 1982 DO0 budget request for R6t3 tot313 &out 

$20 billion of which $3.7 billicn is far technology base pro3rzms. 

' NASA and DOE do not break aut technology base activities scprately, 

but the NASA R&B budget totsls over $4 billion and DOZ weapons 

totals about $2.3 billioa. 

Within DOD, including t?ae three military services, there are 

over 70 in-house laboratories employing about 60,000 pecple. The 

value of these facilities is cu,crentlr estimated at aver $11 billiaz. 

In addition to performing b-house research, the laboratories are 

responsible for managing DOD research contracts urd fer providing 

technical aflvice and assistance to industry, universities ar=a 3tfier 

performers. 

NASA accomplishes its technalogy bcse work through rssearch 

centers, each providing expertise in particular areas of spaca cnd 

aeronautics research. MGSt of these facilities arc owned ami operated 

by NASA and much of the research Fs dme in-house. fI;we-?er, the 

research centers also provide contract managzment and tchnictal 

advice to others. 

60

. -- 

Dos's technology base work is performed, in close coordica- 

'Lon with DOD, at three nztioraal laboratories and seven Goverraentowned, 

contractor operatee plats which develop, produce, test and 

maintain the nucleaz arsaab. These facilities are unique ant2 ~ r z 

not duplicatsd elsewhere in Governonexit 02 Fndustry. 

The Xne-of-effort related to this area of concern is Sescriked 

him. Fer tke reason cited, three LOEs under the existing plan 

aze csmbined to form the new =E. 

. 

61 

a 

,

LOE 3019 

LIBE-QF-EFFORT: 

MAJOR ISSUES 

Does the Management and Oversight of Technology 

Base Programs Insure That Technolagy Besources 

Are B e i q Used In the MGst EZficient ead Effectiva 

Manner and Support the DevelGpment and 

Acquisition of Agency Programs? 

The tongress.has continually shown concern that FadaraL research 

upd developeat sfforts sre bring applied to the best possible _oragramso 

that Ye are gainixq the most out of the f?mds befag spmt, and 

that the result of these Frograms are being put use quickly ana ia 

tk= most productive ways. It has frequsntly noted the dffficuity 2 

determining the total FPderal effort being give? to a parsicralar 

techical area of prcblexn. In many instances several ageacieo ccaduct 

research in the same tecbical area which may szem duplicative or 

unnesded. Situations ce this kind are espscially evident between the 

mi.lltary servicbs -6, to some extent, between I?OD and XASA or DOE - 

because of the shdlarity in their objectives. 

In view of the limited resources available to support the many 

canpe.tSixng program in national defense, space and aeroncutacs, it 

is v ita that technology bass efforts be directed to the most sritbical 

and necessary needs, and *at the results derived from the pragrams --. 

are used to achieve the greatest possible benefits. 

J 

In the existing program plan, technology base work bas accomplished 

under tL-ee separate LOE's which dealt with maagement 

and oversight of technology base activities: specific techr-oloTj 

base programs: and availability and use of technolcgy bass resources- 

We Zound, however, thzt in many instances the work idtiated under 

the separate LOEs tended to overlap 50 such arr extent that the 

soecific objectives of each LOE became obscured. As a result, under 

the new proqram plk? all technology base work will be consolidated 

under a single ME which will emphasize specific technology develapment 

programs while permitting work, as nesded, in the iaaaagereent 

oversight aad resmree areas. 

Therefore, the following sections or' this LOE will discuss 

oar objectives and achisvexents for the three LGEs in the existlng 

plur, and the objectives of the new WE. 

Objectives usder existhq plan 

Our objectivss uoder the thr=e previous LOEs were to provide 

tSe Congress with broad overriqht cf the tccbnology base ccti-rizies 

of DOD, NASA zncf the DOE ncclear weapons complex, and to infoim 

tke agmcies of zny deficiencies noted. 

62

Specific objectives included the following issues: 

--Cevelopmsnt of xrissioa objectives and long rznge planning 

for tecf?nsloqy base aztivities. 

--Whether ps03rams s~pport the agency missicn; are meeting 

their stated goals and are being conducted ia the most 

efficient and effecti-te manner. 

c 

--Whet3er program have an identified facal aoint fer 

coordination cf aimilar rosearch being in savsrzal 

agencies or services, and that the proper agency is 

servinq the fcnction. 

-Whether program receive adequate Feer review and evalua-, 

tion, and address the maj2r technical deficfsncies as 

perceived ty +e Congress and/ar tog level agency anageaent 

. 

-4fiether there is proper balance betweer, re3earch conducted 

in-house and tnat con*sac",ed out to maintain an adequate 

in-house exgertise to manage technology proqranm, and 

--iJhetner mission ageccles' technology base rsscxrces aze 

adequate 2nd being used in the most effective and ezficient' 

manner. 

ResuLts achieved 

Our work has bee3 quite successfa1 in establishiag b9tter interagency 

coordination of technology bsse pragtams, rrquixements, and 

other activities. We hdve.also provided tho Conqresa with information 

in the lorn: of briefings, questions and zeposts on several tocfaalogy 

develspment program, and on the problsms being facad by the 

BaD fskoratxies and DOE weapons complex regarding rcanagement, 

facilities an6 equipment, and personnel issues. 

Sunnrra-y information an completed and on-going assignments 

for the "chrae LOEs is presented in Appendix IV. 

. DOD technoloqy Sase: results achieved 

\ 

Laboratory management officials perceive many barriers and 

constraints on their ability to effectively meet their cbjectives 

and goals. These incl;l&e various regulator- restrictions and a 

lack of adequate resources in the form of funding, facilities 

and equipmeilt, and personrel. 

i 

63

Our overview os' this area has increased t4e WD's aw.zrenesa 

of these issues and they have iL.itiat=d several studies inclEding 

a DQD-wide Laboratory Management Task Forze to ascertain the 

extent of the problem afid what needs to ke done CG sclv~ 

them. 

After we complet.2 our ongahg work relating to labotarory 

management issues, we will fedurrs our emphasis in thit area 

until any DOD initiatives resulting from our work aaA their studies 

can be implementedr 

Our evaluation of selected high technology development prograas 

within DOD has provided the Congzess with greater visibility of .Lheistatus, 

thereby perzlritting better oversiGht and =oatrol of these 

programs 

DOE nuclear weapons conDltxr rgsults achieved 

Much of our work in DC'E rzltte to the need for better DOD/30E 

interface and coordination for leveloping PoIq-ranga plans recar-9- 

ing weapons, nuclear materials and facilities and manpawer raqcirements. 

As the result of our work, DQD -3 M E have established a 

joint study group to cddresa long-rage nuclear weapor,s needs 

and agreed to deve1op.a stable long-rdge baselins for Zetedning 

facilities, manpower and speciaf. nuclear materkl.,requaremen%s. 9 

We have also issued several classified reparts on specific 

technology developmesit prcgrams which provide

. 

We provided brieflags and reports to the Congress and 

NASA management higkligkting the proolems notsd. As a yesult 

of our work, acticno have 'been taken to improve coordir,ation 

between NASA and otfisr agencies perfmxaing aeronautical restarch 

in specific program areas. 

WORK REMAWIHG UNDER 

THE LINE-OF-EFFORT 

The purpose of this ME is to mintah a general oversight 

of technology base activities within 300. NASA, the DOE wealpons 

complex, and other agencies. ais inclrides evaluating specific 

technology development programs, and reviswing mkrlagement pzocesses, 

and the aflocazioa an& use of nsourees within tihe 

technology base area. ?lark under this LOE i3 not finite and will 

be a continuous effort to iden2ify and evaluape signifitant programs 

and issues as they unergz. 

Objectives under props& 

plan 

1. Surface speciffc, identifiable technology isstles or 

concerns ar;d enhance che possibilizy that corrective 

action might be taken by 31% Congress aad/ar sxeentive , 

agencies. 

2. Improve agency operation9 =dating to tschology base 

activities. 

- 

Strateqy for the upcominq 

planninq period 

During the next 18 months we plan to continue our reviews 

of selected technoioq-y developxent program within the thres 

agencies. Also, we w iLl give opesial attenticn to the capabilities 

of the DOE nuclear weapons complex to de-relop and produce 

sufficient nuclear materfab and w=qons tc meet projectea neebs. 

Our efforts will be cancentrated on detedning whether: 

--development of objectives aad long-range planninq 

for techaolosy bass activities are adequate, 

--technology program support agency needs, are 

meeting their stated gcals and are being conducted 

in tht most efficient and Gffective maaner, 

--multi-agency technology deveiopmect pro3ran1s are 

being properly ccordinated &nd rimqzged, 

--technology base resources are adec_uaLe to meet 

agency needs and are being used effectively and 

efficiently. 

2- 

--I

Our selection of technology development activitiss to examine 

will be based on factors such as expressed Congresriocal interesz, 

heavy funding and multi-agency participation. 

As noted previouely, our work in the labaratory managextent =ea 

will be phased down after we compleke ongoing work. Eiowever, specific 

technology development programs will be selected for svaluatiorr on 

the basis of their interface and applicability to mejor veaFons 

systems or mission analysis issues under review by MASAD. 

DOE'S nuclear defense programs involves the effortz of bo*h 

DOE and DOB. WE's nuclear defense program encompasses nucleaz 

material research and Sroduction: nuelear weapon research, devslopment, 

testing and pro6?ttion; stockpile safoty, seeuriry, main2enance 

and modernization: nuclear effects research; acd naval reactors. 

Military forecastas prefct a significant increase iri 

nuclear weapons research, testing, development and prociuctian 

over the next decade dpd beyand. But, while strong demazid is 

building, so is concern in Cozgress that DOE's weapons complex 

cannot meet the challencp. Zcdications are thht 'DOE's lakoratory 

capability is eroding, auclear testing is at zn islsufficient 

level, nuclear materials 9rcductiopI capability is deeliaing, 

component production plan*a atre aeteriorating and equiprcezxt is 

obsolete. Adding to the woeload and further complicating a 

bad situation, many weaF=ls %e the nuclear arsenal must be re- .. 

placed or modified. - ./ 

Our DOE work will be heavily directed toward evaluating 

the capabilities of tbe research and production complex to meet 

future weapons requirmezts. We will also review significant 

technology developments as they emerge. 

Our NASA technolw base work will be primarily direct& 

at evaluating specific new development prqrams in tbe araao of 

space applications and aerocautics. In view of the potenzial 

reduction in new starts for NASA due to proposed budget restrictions, 

much of our work in this agency w ill involve major 

systems rather than technology base issues. 


--DOD's High-Energy Lassr Systems Test Facilities. 

--DOE'S Defense Activities-Progress 

ard Problems. 

--Assessment of Nucldar Weapons Tsst Program. 

--DOE'S Nuclear Weapcas Complex-Alternatives 

66 

aad Costs.

--Nuclear t.3eapcms Stockpile IIl;prov&2rt Progran.--Goals, 

Stratus and Issues. 

--Budling o€ Scienefic Data at Godeard Space Flight 

Ceiter 

--%ASA*s Rotorcraft Technolagy Brogr-4. 

-Survey of DOE'S Uuclear Weapons Laborataries 

Fctur2 assigmsnts 

c.' 

-Hanagezxenr and Direction of COD'S High-Energy User 

Technolagy Development--aullo~-u?. 

--Airborne Laser Laboratory. 

--Standby Nuclesr- Material Production Facilities. 

--Sur~ey ef Parrtea: Weapons OFeratiori. 

--DOE Caaability of providing Necessary Quatities of 

Soecial XucPear Material$. 

--Status of NASA Projects to Satisfy ?ower.Problerns Lq 

Space ~ 

-1mprovaent 

System. 

of Spacs Shuttle Thermal Protestloa 

--Possible Cuplication of Effoe Betwsan NASA and COD 

ir, Ground Tzacking and Data Acquisitioc Systems. 

--tJASA's 

Connrunicaticn Research Frsqram. 

67

APPENDIX I 

APPZNDIX I 

The E'Y 1982 W D buaget requests $65.0 billion for research, 

development, and acquisition to support our military gosture. 

Included are $19.9 billion €or RDTLE and $49.1 bitlion for rha 

procurement of wezpon systams and other dlitacy equipment a3d 

supplies. 

RDTLE Z"HDING (SM) 

StrateGic Warfare 

$3,469 

$4,435 $4,613 

Tactical Warftre . 

5,681 

6,990 

7,404 

Intelligence L Communications 

1, Sf4 

1 968 

2,365 

Science and Technology 

3,157 

3 , 754 

4,602 

Other 

2,233 2,774 3,009 

$16,054 $19,921 

'$21,993 - 

PROCUREMENT E"DI3G 

(SM) 

Strategic Fcrses 

General Purpose Forces 

3 5,601 $ 5,745 

31,019 33,856 

$ 7,525 

39, €36 

Intelligszce & Comications 

3,818 4,391 5,830 

Airlift & Sealift 

Other 

Total 

816 1,240 1,335 

3,697 3,869 

$44,951. $49,101 

- l/The new administration increased the total Dafanse 

FY 82 budget by $25.8 billion. Significan= Fortions 

of thct increase are for RDTbE anG procurement of 

major weapons and will increast the $59 hillion 

proposed b~ thr Carter Aciministrction. 

68 

4,225 

$58,352

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APPUJDIX I1 

APPENDIX II 

RESEARCll AND DEVELOPMENT 

ACCWL IS WENT REPORTS 

--. Code 

Oivlslon 

Zontyd No. 

952244 PSAD/RD-RO- 1 

952221 P S AD/ RR-oQ . 2 

-- Date 

&&pet*& 

Type of 

Accrwiipj Islunent 

i10/24/79 Air Firm Systenis Carrunand Program Otlier benefi ts 

Manages has taken actlon to obtaln 

coples of contractors Independent 

researclr and development projects 

03/31 /UO Hilnagement lmprovenrents by DnD and Savlngs not nrensurnble 

WE wll) strengthen the effectlveness 

of the nuclear weapons research program 

through better pragram plsnnlng , di r- 

ec t 1 on, and nieasuraiien 1: 

95221 3 PSAD/RD-00-3 04/l6/80 Improving t.Rb mclear weapon rcqulre- Savings not wasiirable 

ments forcasts will result l b l greater 

efflclency and better utlllzdtlon of 

OOE's nuclear material productfon 

- - faqllltiss ! 

951645 I.u\sao/snA-til-4 W/26/83 GAB raccnutiandeil tlra C-X contractor Other barref Its 

bq required to test and daiioiistrate 

C-X landing and takeoff capablld kies 

ora unpaved rirnwnys becatisa 1 ts InlssSan 

calls for such operatjunr. The Alr 

farce concurred tnd cornplotcil li mfbtrwl 

iiiadificlrtlon tn reqrrlre thls 

rlenions tra ti an and tes t 1 ng e 

I 

4 ./

APPENDIX I11 

f 

-TIONSI-IIPS 

BETWEEN SYSTEMS 

DEVELOPMENT AND ACQUISITION 

AND OTEER ISSUE AREAS 

Tb orgadza+Aonal chatt reflecting GAO's structure fQr conducting 

Defense stftdiea is shown cn the following page. As irdisated 

in, the chart, all Divisions hare some concern with Defense 

acevities but major responsibilities rest with WAD and PLBC, 

and FPCI) which con&ucts or cgordinates all reviews @f dPii;ary 

manpower related issues. Agreements worked out with these and 

other Divisions =e presented below. 

1. Agreements have been reached betk.een PASAD and PEIZD 

Wit31 regard to each Division's responsibilities OP, 

military prepa+ed.less matters, znalyses of -e Eep-zrt-. 

=eat of Defense's equipment procurement program, 

and iatertrated logistic 3upgoft matters. (See ~ p . 

75 and 76. ) 

2. Agreements have been reached between MASAD and EMD . 

wfth regard to'tesponsibilities fer (1) safety and - . 

regufaticn of faciLities and materials use6 to 

produce nuclear weapons, and (2) with rsspset 20 

acquisition reviews of majoz energy projects. 

(See pp. 77 and 78.) 

3. International DiViSiGA. Sincs tberz is a potantial 

for overlap in ID'S internation aflaisv isstas arsa 

special attention Ls given by SDA in plamiilg w~rk 

related to codevelopment or coprgductioa of =]or 

systems by foreign countries. (See p. 78.) 

4. Agreements have been reached between MAS32 and FPCD 

with regard to the reascnableness of extending MASm's 

major weapons systm reviews to manpower Issms. 

(See 9. 78.) 

73

I . ' 

.. k 

5 

l!- I 

I 

I f 

! 

. .. 

7" ! I- 

- 

74

- . - . 

APPENaLY SI1 

MASAD AYD PLW RGRXEMENTS 

Military Readiness 

Beth PiZD and HAS24D have hportant rolss in reviewing dlitary 

readiness. While these roles are dlstipctly different they zre 

closaly related. PLRD's primrrz+ emphasis is on the readizess cf U.S. 

Fcrces to =espond tt, any o€ tke continqenzies forsseeable in tke 

mag tern with existing equipmexzt. Consequently, its ptiinary interest 

is ox matters such as supply suppxt, the state of xadiaess of 

military units, maiIztenk?c=, and the reliaaility of readiness re-wszing 

by the services. WAD is ccnce-cned with missian arlalyses aad 

threat assessments from the stan6,point of rzquirexuents for weapons to 

be developed for deployment as mcch as 5, LO, or even IS years ia 

the future. To fully understand the many rdfications of military 

readiness, both Divisions must be knowledgeable of ths roles a d 

missiorr of the militzry services. 

Equinment Requiremenk Analyses 

Requirement analyses, for ~urpose of tile acjrsenent, were 

defined as analyses 3nd/ar validaticn of the need f=rr a partialar 

typs of equipmentr with certain operating chara=te=istics, and ia 

the quan+Acies specified. Reqf-iremeats for systems &signed 

prbaeily far combat support axe baaed OE the nature o€ the LogisFics 

system and other matters such as quantities of wax reserve materials, 

prepositioning policias, aad foreigs and domestic btrensFortation 

facilitiss . - 

P W ' s responsibility relates to the fsllowinq matters: 

--Requirexents detednations far the procurement 3E additional 

quantitias of all deployed systems. 

-3equirments determinations fcr nsw ntajer logistics/ 

supgort systems, as opposed to coniraat system. 

--The traditional supply-type fxactisns: Cataloging and 

standardizatioc, inventory manaqernentr requirements, 

from the standpoint of stock levels, pigeli-ie needs, 

etc. 

WAD'S responsibiility relates t3 the foIlavi25 zakters: 

--The determination of mission needs. 

--The develo-ent 2nd procurement of new types of 

weapois or other items of mzterial which have not 

previously beer, acquired and use6 by thz Government. 

75

APPEDIX 111 

AZPENDIX I11 

Integrated Lr=qis"-ic 

Sqpo rt 

PLRD 3as 9riz-y ressnsibility 5or all derailed reviews 

relatins ka is-ttd logistic sxpport systems. 

is responsible for acquisftion.cycle activities 

fscludmg mewing system design cosrsiderations. These early 

stages of dewelapaent are zharacterized by change upon change 

as the spste desigaers attempt to produce designs which meet 

many rqair-tn- These early efforts include analyses of the 

effects 32 a3wtive hardware designs on aperational performance 

and OQ ownership CoESideratioas. The 6esigm decisions 

made deterJnine the ulti..=?ate effectiveness of the systan, as 

well as dim- the system's logistic support requirexents. 

P"LRD' 5 arec of respnsibility begins with evaluating the 

adequscy of ths Integrated Logistic Support (ILS) plznning to 

meet t3e logistic support requirements of the systun. This 

plannhs 

in &cut the middie of the acquisition prscess 

after the sysresn desi- is fairly well eataZished. While 

the tw3 areas of respo=ibility are different--?1YISAD evaluating 

system tesiqz and PLXD evaluating ILS Flaming-close csotdinatiea 

of this wark hll be .necessary. %SAD will, fer e:mqle, 

. keep ZRD bformed of the coos$derction gi-?en to sach factozs -\ 

as reliakuity, wiintainability and operational fsadiness in 

' 1 

the dekigo pzacess and PCRD will keep MAsilD informed of common 

legisti-? support probl- which need close cornsideration in 

the desi- of futxe systems. In this manner, both divisior-s 

can work tovar6 the common objective of improving system eb"- 

fectivoness anti reducing ownership costs. 

76 

...

UPENDIX I11 

APPENDIX TIS 

Major Energy Acquisiticns 

WSAD's responsibilities relating to systems development and 

acquisition is oziented toward haw the acquisition precess i s 

applied t:> specific energy projects., The syat-as divalopent and 

acquisicdsa process is a sequence of activities stazting with the 

agency's exploratiorr of alternatives to fill a *raid and exteads 

through to the ink.zod*ictioe of a 3ystess hto oseratienai us,* or 

otherwise successful aclriev@ment of prog%%% objectives. 

W!'s primary eqhasis has besn on P-nerw policy and arogram 

evaluation dealing with economy, a2ficiency, and effectiveness. 

This included evafwtLsns not only of Cast, schedalin3 aqd L3erfozmance 

05 msjor en=rg systems acqdsition but also bqalysis af the 

policies sqporting enerFy program. 

MASPS will coordinate all efforts in this area with EMD. 

Safety and Requlation of 

Facilities and Matgrials 

. Used to Procucc Euclee Neapons . 

La 

MASAD is responshla for a L review looking at the resaarch 

and devdopmenk and prorluc+Aon of nuclsar weapons, inzluding 213, 

materiabs used in producing those weapons, Gd the safgty sf 

such prodEction t5e handling of weapons materials when not in 

the reac5cr facility. 

€%%SAD is -responsible for any reviews airced at assessing the 

sufficiency and ability of nuclear facibties to producs adquite 

nuclear mzterials to sqport the type of w2aaon systems the 

United Stztes needs in it3 arsenal. 

--EMD Is respensi'X.e for all ovezall work relating to the 

regulation of safety of the operations 3f nuclelr 

faciLities an8 -e contro: over waste material. 

--Em is responsible for all broad reviews or' how 

adequately JOE is carrying out its safety respcnsibility 

regarding the operations of nuclear facilities. 

--DID is responsible for any review looking at the 

issue o= whether the Department of Energy or the 

Nrrcleas .Regulatory Canmission shou1.l regulate tha 

safety of nuclear facilities in-~ol*+ed in producing 

aily nuclear material 

77

APPEXDIX 111 APPENDIX 111 

MASAD, thus, is responsible for loaking vertically at 

all steges of a neclear weapon's developnknt. EMD, on tfne 

other hand, is responsible for lookfag horizontally at the 

safety of all nuclear facilities. 

Internatimal Affairs 

me International Di-xkion (ID) has lead division 

responsibility in htemational policy and political matters 

aad is invslved in reviewing decisions cor,eerning new 

apprcacfies to weapons systems develogment and production. 

i.e., codevelopment/ccprcductian with foreign countries. The 

=rents leading up to the ccdevelopment/coproduction decision 

ate influenced by basic interna%ional policy/politicsl issues 

and any reviews of these events should be lead by ID. However, 

once the c&evelopment/eoproduction decision has been made, 

.WAD concerns deal with the imgact that these broader new 

aparoaches to weapons system-such as aodevelopment witk NATO 

--.will have on U.S. nilftary capability and the traditions 

pzocurennent practices, as well as on the 2bifity of +&e U.S. 

defense industry to retain its ability to r5spond to DOD's 

needs. 

Since there is a potential overlap with concerns addressed 

in the International Leeairs issue area, MP-SAD-eriginatod assignments 

under LOE "Eow aze U.S. acquisi5ion and procurcnent 

problems affected by coopezating with foreign cawtries in 

the development, production, or sale 3f system?" have "frontend" 

coordination and agreement witk ID. 3.11 final reports 

rosclting from assigments unGer this LOE will be ccordinated 

Vith ID. 

MASAD AND FPCD 

The teasonablsness of sxtending WIAD's majcr wszpno system 

reviews to raznpowet issues, when apprepriate, has Seen agreed to 

by representativss of MMAEI and PPCD. MAsiLo will inciude manpcwer 

issues when they are judged to be critical. Howev=r, nat evzry 

weapclns review will contain a manpcwsr assessment. 

In ordar to provide tSe MASAD stlff with 5uidance for the 

extensicn of their reviews to selected manpower issues, F?CD is 

developing an Audit Guide, which then will be used by the 

MASAD staff. 

. e.. 

78

. .. 

APPENDIX IV 

LDPEdLIX I-? 

F 

ONGOING VORX 

L 

LOSS 3888, 300'9, aril! 3010 have been ef-ated in this 

* plan and a new sbgie' ECE established. Results achieved 

on assigmexxto complo+& and results expect& on ongoing 

assignments under 3308, 3009, and 301C are presented in 

this appendix. 

. 

79

FPPEXDII IV 

APPEXDIX IV 

LOE: 

Are Technology 

Feeds? (3009) 

MAJOR COMPLETED AND ONGCING SJORK 

Base Program Adequately Supporting Mission Agency 

Obj ect-ive: 

Coup I et cd 

Work 

To study thc technology base programs of mission agencies to identify 

the most significant issues. Prcgrams with expressad Congressional 

iatezest, heavy funding and/or multi-agency activities were the primarg 

candidates fer detailed review, The basic and applied research 

efforts bebg conduczed in selected technical areas were seed to 

provide the Congress with an overview of the isspzes. 

Results achieved or hoped 

to be ackie-?ed 

DOD Should Dete-e Cost We reviewed the Deparment of Defense's S-farts 

asd Operational Ef r'ec+ire-sess to develop helicopter ir;-flfght escape systms 

of Helicopter Ln-Flight Escape to detexmine what aetims were tak 00 0-JI reccm- 

Syst-. (PSAD-8C-65, 7/14/80 mendations for develcpmenr in ouz June 1973.report 

Report to SecDef) 

to the Congress. P-rily, we assessed the bases 

for subsequent decisions not to- deoel6p the escqe 

systems, especizlly the one for t3e AH-1 Cobra 

attack bekkOpteS. A de&bi:ive cast apd apcar,2gnal 

efhetiveous. stdy had not been done t?, pzovfde 

a sound basis ror a decisioa. Accordingly, we rec - 

I 

mended tfiet a through and quanficative cost aizci 

operational effecttveness study be done of an -h-flig~& 

escape systs foz the Cobra htlicopter. DgD agreed 

with our recommendations. 

BOD' s 2articls Beam Tecfmolagy 

Pzograrn-Problerms, Progress and 

COSZ~ ic-Psm+-i, ii/wm) 

WD's 9igh-Ebezgy Laser Technology 

Program-Dirsction and 

FOCUS (C-PSAD-51-3 , 12/02/GO) 

Even though all the three military servi,ces a d 

DAR?A has had research ongo423 far aver 20 pears . 

the resolution of basic techtologtcsl and cost issues 

on partitle berm weapons fezisibility still persist. 

Fe recommended a chaaga ip progrsn manzge3ts3t to 

better address the prablezns needkg resolution before 

Moaned decisions can be made on whather the technology 

can be =eapopized. 

DOD is 5 yeass and $1 billion away from deiding 

whether to prototype che r'irst hizh-energy lassr 

weapon. Progrz direction has been detexmiued Fy 

the individual ser9ices a d DAVA which has resulzz? 

in a fragmented approach to solving tecbology ptc lai is. 

We recommended the high-energy laser prograrr manage- .' 

m a t be consolidated in OSE. We also recomended tkar 

the Secretary of Defense make an assessment on where 

the best pay-aff for Defense i3 considexkg laser t+chnolcgy, 

dollars and schedule. 

80

Completed 

Work 

DOD's Use Jf aeQIotdy 

Piloted Vehicle Technology 

Offers Oppore-ties fer 

Saving Lives and I)ollars 

(MAsAD-81-'rO, Zqo= to 

the Congress) 

Management -Zapmeneats Bill 

Strengthen h c d Izeseardt 

and Deve1-e Efforts far 

Nuclear Weapms Safety, 

Security, an$ thunau$ and 

Control. (C-PSAD-80-6, 

12/28/79. Ltr. to DO33 and WE) 

The DNA's SateUte X-tq 

FaciUty-Is ir the Key ts 

Satellite SuwfvabfLfty 

Analysis? (C-E:S*81-5, 

01/30/81) (Le. to BOD) 

DOE'S Nucl- Weapons Cqles- 

Alternatives and Cost (Cang;. 

Request) Oral plus briefing 

paper. 

Sesnlts achieved or hoped 

. to be aclieved 

tSe examined the status of renotelp pLloted 

vehicle techology, reasons for its I.fiited 

application by the Deparrzrex:: of Dcfexss, and 

*. tbe potentid for applybg this technolorn to 

nrw-mifitarp us=. We found thet experts bebve 

there are various advzntages to usixg 

uamaaned wehides ovex -ed aircraf c fer 

ceztain mif$taq missiotrs and h2ve identified 

user reluctance and lack cf sqport as hinderirfg 

the greater use of remotely pilazed vehicks 

bgr DOD, We recommended that the Congress scruriaiae 

proposed manned aircraft developeats to 

m e that WD gives adeqcate coas5deraticn 

20 the use ar' remotely piloted veh€d.e tachnom 

for appropriate miss: -I OILS. 

DOD pravides DOE wfth senerr1 prcgram guidance, 

fgt teseazch anti developcent work to improve 

rmclear wezpons, Neither agoncy estabiishea 

pciorities, goals, and objectives, Defense 

has inftiated procedures to prioritize militneeds 

fn the annual guidance to Energy. Energy 

dtss state6 that translating research goals and 

priorities *to a plzm addressing eitary needs 

could lecrease the er'f ectiveness of .weapons 

laborator7 work, 

SXITF fs planned to FtbVfde a major Izboratorp 

simulation capability for measuriry systungsterated 

electrcmasetiz pdse effects that 

vopld be induced in sz.telJ..ites 5p x-rzys froas 

nnclear weapon detoazticas h space. We recom- 

-ded program termination. 

The briefing discussed the trend towzrd datario- 

. ration of nudear wezqons faciiities and the obsolescmca 

of equipiaent which is hamper.fng the 

weapons complex capability. The bziefing included 

obaerp.atfms that exding prdded through the 

past di&istr;etiOn Would not dim 2 t'Jtn aarrad 

of the problem. Btidqet sstimates received frc3 

the present amistrztion indicates a fix may 

now bz, put in motion, 

- 

81

Completed 

Work 

"A Look at NASA's Aircraft 

Energy Efficiency PzTGgram" 

(PSAD-80-50, .July 28, 1980) 

Results achieved or Soped 

to be achieved 

The National Aeronau:ics and Space Adminisrrat:Jir ,' 

(NASA) initiated the Aircraft Enqg Ef f icienc:: 

Frogtam to provide by i985 the techrialogy for 

mak.r'ng future transport, aircraft up :c 50 pcrzrzt 

mote fuel efficient chan today's aircraft. 2.e' 

original gods of the program were highly oqtbistie, 

Sever& technologies offering signff icjnr * 

fuel efficiency opportunities probabiy will mt 

'be ready for several years after 1385, a d weemeed 

costs have_rLsen sigsificantly. 

b 

. We found there is a need far 

-USA to adopt a standard fornat for cor&s2ly 

reportirig the scams cf mzjoz aeroumtical 

p~ograms to the Cozzgress, 

-DGD and NASA ta fomalize thsir responsibilities 

in certak areas of technology devdopment 

and 

-an aercnautics policy which wculd cl&p 

NASA's role. 

- 

3 

NssAdisagreed with out recomnendariolls; how 

DOD and OSTP took or prdsed to take aczion 

which vou1E; (I) formalize the organizatisra az-d 

respcasibilftfeo of 3OD and NASA in the areas 

sf composite =aterials technology asld (2) de~sicrp 

a policy statsezt ou aeronautfcs r=s;earcfi and 

dePelopmePt to-guide NASA's progr=ms in this arza. 

Note: This LOE has been expanded to in&As all 

work dealing with technology base act5ittes 

and the DOE weapons complex. Bs a resultp 

it has been givep 3 new title to rdlett its 

broader scope and all ongoing wzk has been 

transferred t3 this LOEI , 

i 

New LOE 

Title: 

ongoing 

Work 

Does me Kaaagement and Oversight of Technology Base PrograPs 

burn that Technologp Resources are Beiag Used in the Most 

Effizient and Effective Manner and Support Sssion Agency :?e&s? 

(3009) 

.I 

fmpact of Personnd 

Constraints on the DOD 

Research and DevGopruen2 

Laboratories Operations. 

82 

Results of our work to date iridhcazes thzt r-,affi;lg 

problems fn the DJD laboratories may not be zs 

sevsrre 2s a D3D task force report implies. '-- 

will re:onmend that the results of the repc i ~ 

be used as a basis to isltiat? corrective actioa 

befcre -:ore definitive data Is obtained. 

- 

I. 3

1-- .... 

- . . 

-0 

Ongoing Work 

I 

DOE'S Defense Activities- 

Problems and Progress 

Nuclear Weapons Test 

Program-Status and Future 

past :;.I reporzing has provided Conqress wrth 

incq=:-?cxx =valuations of specific Sr2g;ints 

of CC3 3 defense aczivities. bk zre .leve:.oFinn, 

a :+ott t3 provide Congress wish an imprcvaf 

:etspective of probleus ad issues facing 

DOE'S &ease prograns and pr3gxess beirig &e 

to :er.dve them. 

C0asi;t~g the recent history 05 fewer ituclear 

tests a the cutrr~c effarts to reverse this 

tzebl, de plan to sake an assessSeaL of DOE 

and 228's action plaas and capability to acrcnnp- 

&it 21:s ambitious rest program. 

Ugh-Energy Laser National 

Test Facility 

Th? ;tj.rctive of this assignment is 20 evaluate 

the 'ELXF ptoo,r:am to determine if it is stmemrik 

.rnariagsd tc meer ch3 eff icipzcy and 

ecorxq goas inzeaded by Congress. 

Subvey of the Eandling of 

Scientific Data at Goddazd 

Space Flight Center 

e 

Our wsrk to date indicates that the way that 

NASA amages the acqcisitica and retrieyal, of 

sciczcir'is data requires ccstl.7 and rime mas 

u manipulation before it csn be used by 

the iclentiffc conmmity. We plan to identify 

tha t.9d.fic problems vith i?W's cuxen6 data 

utaaz;=~en6 practices an8 recommend appropriate 

coap~3cjl of action. GZVZ potzatiaf recammemiation 

is -at XASA implement a cgntralized data management 

system. 

. 

. 

Status 06 the Relistat 

ProgTX3IB 

The ?&stat is a Torest ~ercfce program to 

develop a lighter-than-aiP-veMcle propeEed 

and guided by four lieLicoptsr3 ta ca== lcgs 

from remote forest areas. iYsc of such a .;eltide 

Wfll Fenzit lcggiq operations in unaccessible 

terzu without the aeed to buzlr! roads. Me 

fmsd that the developeat progcam 1;3 usbg 

obsolete te&nology and wlll not resid", ia a 

systm whit21 c2n be prc.duced in quanzity --f the 

deatonst2ation is swxrssful, We are recumendip9 

that thz Secretary cf Agrfcdture reevduace 

the need for this program, and *f it cantinus, 

it should be redirected to assure that useable 

technology results. The Na-q is providing 

technical managsnent for the progrzn. 

. 

83

MAJOR COi4PLETED AlTD ONGOIXG S5TGh-S 

LBE: 

Bow Cm tSe Managextent ana Oversight Of Technology Base Activizies BE 

Improved? (300e) 

Objeccdves: 

Wpleeed 

Work 

To study the tschndogy base management systems of misslon 

agencies tcr iddntify specific processes or nechanism.9 whlch 

warrant alditional attention because of problems noted, or 

because of their potential impact on the effsctiveneso of 

the werrll systems. 

Results achieved or hoped 

eo be achieved 

F e d e RbD Laboratories- 

DirgCtQrs ' Perspe2srfves on 

lbnagaent (PSAD 80-8 3 

U/28/79) Report to the 

Congress 

mcqtain Requirements 

pli~aee Planning and Productior: 

Deaions fot Nuclear Materials 

(C-BAD-80-3, l.2/10/79) 

Desirability of Continuing 

tke NEdear Wsapous and Other 

Milftarg Rehted Activfsies 

qnder DOE (la-house issue papa 

to C.G., OS/09/SO) docLrmerrt was 

also provided to a colrgressional 

committee for kfonnatiorr. 

This information rrrport highlighted the role 

Rhl) laboratories play in unagirg funds, discusses 

manizgemeet techniques c3m9a to ncst 

of than, and identifiss cocstraints to 

effective operations as perceived by labcrarory 

directors. The rsport provfded iztsight cn the 

fssues to th= Coxgress and agericy matagaent, 

and served as o soarce €or several GAO followon 

revievs dealing with the specific problems 

identified. 

Nuclek atcriaL3 are vital to the Nztion'~ 

nuclear we2pons progra ana our national 

defense. FOP &at resort, DOE'S materids 

requizemenrs planning grocess is extremely 

-5mpcrrtaet. li'e f.xmd chat DOE'S lmg-range 

materkh planitirrg for decisicnmakiag wa3 

hadequate. DOE agreed to tievelop a lmgrzg~, 

weagsn requirem..Jlts bzseline for 

dztermising requirements for facilitfes, manpower 

urd matrrial. 

The continuins question as to %'nether nuclear 

weapoits activities should mor€ appropriately 

be assigned autstda DOE was examined. hr 

study did not identFfy say signiffcmt benefits 

of transferring the nuclear weapoas 

functions elsewhere. 

Note: 

This LOE has been terminated - all 

ongoing work dealing w5th technology 

bk-e activities and tLe DO2 wea?ons 

complex has b%en trzmsferreci to 

LOE 3009. 

. 

84 

- _ _ __ ., .

AiTEmIx N 

.- 

LOE: ' 

>lr_JOR CDIFLETEI) AdD ONGOING ASSIGNG3TS 

Are ?fissior? Agency Technology Base Resources Being Used irr tile H~se 

Efficient asd Effective blamer? (3010) 

Ob j eetives : 

To study ths adequacy and use cf resources tir nzintain a 

viath i8-hw-e laboratory research capability within the 

nissllsa agmcies. 

L 

'hteragency Laboratory Use: 

Czrxeat Pzactfses and 

Rezurping Frcblems 

@SAD-79-97 9/4/79, Letter 

ta Subcmittee) 

The ,ate oA %sic Research 

in DOI> Labotatorias (Mp.SAD-81- 

5, 2/13/$Sk, Leteez to SecDsf.) 

2 tzf f inn Ir&ications of 

Tracking and Data Relay 

Satellite System ard Remat3 

Sensing Autbortti.3 

(PSAD-80-49, 5/28/80) 

I 

Results achieved og hoped 

to be achieved 

Obtaining services from laborateties iii another 

Federal agency is one of many t=es of interagency 

cooperatior;' in research ad development. 

Interagency laboratory use is one means to more 

dficieetfy use the vast and varied research and 

devefopmmt resources of the Jederaf Goveretment . 

This report explores ths extszt and tries of 

interagurq laboratory use; scrutirtizes and 

adTantages, as well as-coastraints, ad managemeat 

problens associated with iuteragmcy laboratory 

work; 'and suggests approaches to congres- 

Sf& QVaSfght Qf tfr- a area, 

The le+& of basis research at the fP-hcuse 

laboratsrtes has serisusiy decline ad BOD'S 

resuch grmh is Flamed, for the .s~erial 

research cemmrmfty. We rzsomeded that D3D's 

laboratory revitalizasioa progran ccnsider 

whether the present lewd of FP-hcuse research 

is adequate to mafnuia the healzh and vitalitr 

of the labetatori+s. 

TXS assignment As a c=rngrassiona.~ request f~rn 

the chairman and Rzs6ECi;lg Mfnority Member of N&Sn's 

Senate ApprepziatLons Subcommittee. We reported 

that thetz would be a' reductio-a of over 200 c5v.il. 

service POS~~~QBS assocbted with trzckbzg and 

daca syst- at: Gsddard as a zasulr: of NASA's 

Oesision to ccnsolfdate ~ 5-s sctivitis. Hoveva, 

we pointed out: ?hat NASA plans't:, put the 

displaced civfl senice employers in ocher posftims. 

Note: T5is LOE has been termirated - d.1 

ongoing work dealing -%Mi tockndcgy 

Oase activities end ths DOE weqxns 

com?la has 5eEn transfazed to LGE 

3009. 

a5

. . . - 

May 20, 1931 

I 

TO : arograxc PMning Conmirtee 

Heads of Disrisions ard Off ices 

Rsq iondl Managers 

FROM : Executive Secmtary, PPC - 

SmEcT: 

PPC (and Management) Session on MASPD's 

Prograu Pltn for the Systeas Bevelopent 

and Acqnisittfons Issue Area (PFC-61-12, 

4/2s/a1 I 

A summary description of the decisions reached BS a result 

of the suhject sessbns fillous. 

To assess +&e Ftogress of GXO's work in the issue cztea and 

to obtain the ,pFc's guidance on the direction ef effort UeaeAbed 

fn MASAD's proposed plan. 

CONCLUSIONS 

ACTIONS TMEE OR P d m D 

1. Zrablens With mD Systems Develobment and Acquisition. 

The PFC expressed concern that rAOr as well as others, 

continually irleaeify p=oblems in developing maJ or 

wsapons systems but that nothing seems tt change in 

the way MjD devslops such systems. A discussion followed 

on what spstenfc proclems exist when D9D develops 

aid acq.;tires mcjor s-vstems a d whether anything can De 

done to improve the eatire procxremeat process as wellas 

what can be done to improve specizic dacisions at 

key pints of irdividual sys2ems. MASAD poin%cd out 

that change is, in fact, taking place but that *he operatien 

is so cmplex that it is essential tc continue 

attending tt specific increments to achieve ultimately 

the overall improvements desired. 

The PFC initiated this discussion because it wanted to 

get a better feel for the extent to which GAO could 

expect rasults from its work in this issue area. It 

recognized the difficulty cf secuzing any changes in 

the way the entire major system acqiizi tiori prncess 

works as apposed to getting incrsxuental imp~o*~aments 

made to specific systems during their development. 

86 

3 :. 7 

u -

I 

S?lt i% meless, wanted MASAD to better srticuiate 

vht Gao's stzategy siiould be. The LOEs to be apprcvcd 

are lF.sC& &a Attachment I to the action memorandum, 

an6 tb €PC directed MASAD to (1) state its objectives, 

strategies,, znd goals to inprove-both overall systmwide 

mestex~k proUcms and individual systems problems 

and (2) b-r explain whac it expects to achievs as a 

tesulc, 3f mr systeaic work and individuzl system rwiews. 

Ths. PPC -&&zd Ut MASAD should work with OPP art these 

aodifica- sa the alan can be approved by d.d-d*me. 

H24SAD cuttle~~~~d tke ??Cas concern and agreed to address 

tbfs s-m issue in its revisions to khhe _elan. 

HZSAD auglnzsizes that GAO's rofe in this area hns been 

"J3 s t ' z tfig tssues/problems disclosd by recfewiiiq 

major sp-3 acquisitions. The Congress and 668 th& 

mast dec- to deal with the results., elfher In the 

tgenciesP qsteaic decisior, m&ing process. or i.a indavidual 

aeqwLsitisn activities. The PPC wcnts EWSAO to 

mrs ~LeazLy artfculazte in its F ~ M w h t hxaczly ~ O ' S 

role is, 

Ta tu- madestand the Eature of the systelnic prcbless 

b tize ajar acquisition araa as opposed-tc Specific 

pzzUems with individual s;?stemsr the 2PC raised 

the fouadag points. 

Focushq At2ention on Problems o.€ Developing Mafor 

Weapcns Svstans. The PPC asked whether any systems 

have b- identified as "successful' arid whether these 

are systeds lessons *to be leaihed fran thet success. 

MBSAD said the F-16 is a successful system no;: only 

because ob strict design controls and unplc r- *soiircezi 

(people and dollars) but also because of simpre *'luck". 

MASAD added that decisions on veapsns systems oftm 

plitical. %is focus has contributed tc de-7elqment 

and acquisition decisions and problem. It also makos 

Ft alsost iarpossible to "turn-off" a systzm cnce it is 

in the acqaisitiun pipeline (which eitands as much cs 

15 years). 

The PPC d W AD tecognizad the need to effect change 

to be u1 isportant issue and discusred possfblo altsznatives 

fo help focus attenficn ofi problem of developing 

and acquiring major weaaons systerns such as a case 

study cf t. successful acquisition, the effect of the . 

high/low mix trade-off on acquisition or a summary reprt 

idantffyinq problens in doveloping/acqciring maj3r 

systems ('both weapons and non-weapons) . &\SAD szid it 

will continue its strategy of focusinq attention OR 

thh problem by issuing summary report(s) thet will 

highlight specific problems (e.q., fundinq constrainte, 

over-soFhistication of design, pcor mar?agenent, e tc .I 

zlready identified in recant work. Also, PASAD will 

- 2 - 

a7 

3 7 3

discuss what action DOD has/has not taken as a result of 

our work and annually advise the GAO Budget Committee of 

this information . 

Problems With Sophisticated Svstems. The PPC questioned 

the trade-off issues and why WD,- in same cases, opts for 

apparently overly complex and sophisticated systems instead 

of "elegantly simple" pieces sf equipment. MASAD 

stated that systems development and acquisition decisions 

are .necessarily considered relative to resource constraints , 

especially people and dollars. With limited resources, 

DOD has chosen cmplex systems over simpler ones to achieve 

mission needs. For example, an aircraft requires not only 

a pilot but also many supporting (administrative, maintenance) 

personnel. So fewer but more complex planes which 

can achieve the mission with fewer people may be chosen 

over simpler systems which require mote support staff. 

MASAD noted that many of the systems becoming operational 

now have been Fn the acquisition pipeline for 8 to 10 

years. This problem is not a surprise to Defense management-they 

frequently trade off simplicity for sophistication 

to reduce large staffing requirments. HASAD said 

that it will address these issues in the "trade-offs" LOE 

(p. 34) and make any revision to the plan deemed necessary. 

r 

Individual Weapon Systems Work. The PPC was concerned that 

a user or reader of the plan be able to make the connection 

between the individual L6E objectives and the assignments 

htended to address those objktives; that the gla6 should 

better describe how problems are being considered by GAO. 

in the total management context and not just as they relate 

.to particular systems acquisitions, namely the major weapons 

systems reviews. The PPC's interest zeroed-in on better 

defining why MASAD keys some weapons systems to one LOE 

and other systems to a different LOE. The PPC wants MASAD 

to mere clearly explain the criteria it uses in assigning 

weapons reviews to different LOEs. MASAD will do this as 

it revises its plan as described in paint 1. 

MASAD then explained how it selects the systems for annual 

review and the influence this work has on the other LOEs 

in the issue area. From the DOD's Selected Acquisition 

Reports system and other information identifying major 

defense acquisitions, MASAD chooses the 20 to 25 weapons 

systems to review because 06 their high visibility and/or 

their probability of experiencing problems in the particular 

acquisition phase of the system. MASAD has identified 

key topics- to be considered when evaluating individual systems. 

Where potential problems are perceived-systems to 

topics-the annual review concentrates on the problems for 

the respective system. 

MASAD noted that its weapons systems work acts as a "springboard" 

for reviews an other problems such as cost estimating 

or test results. This has led to some noticeable management 

J 

- 3 -

iaproverni?rrts, such as the elevated hprranc% to 'the 

indj.viduaL grqraiz management off ices which manage 

specific systenr acquisitions. 

L 

3. Periodically Communicating Major Acquisition 'Issues tc 

Federal Agencies. In a related matter the PPC referred 

to tke Cmptrcller General's January 21, 1981, letter 

to the Secsetary rlf Defanse outlhing def?nse issues 

needLnq attention, and asked (1) whether a sqhibar letter 

should be sent on a recurring bcsis and (2) if similk" 

letters should be sent ts non-defsnse*sgeneies by 

MASAD Q= other divisions. MASAD pofnttd out that the 

Defense Secretary has established task fortes and is 

stressing the need to tighten up the acquisition process 

BS a result of the letter. rHASAD a9rees that 

letters which pull issues together do have value. 

MASAD addeS that DbD's high level newly organized offlcz 

to address waste and mismanagenent will be usaful t=r GAO 

as a conduit fcr actim an our work. MASAD nated that 

this office has been charactarized as the 'eyes and Zar3 

of the Secreta-* and, &as been waer cansideration for 

about 2 years. It is an uEer management level mit within 

the MD's Office of the Secretari;. it is mt a field 

office operatiam. 

On the basis of *.e discussicn and the positi-za recsption 

of cur recent letter, the PPC believes that aericdic ccntact3 

with ED or) Fssues GAG believes need addressin9 is 

worthwhze and t& PPC requested ~ c m orris to work aqt 

the eintin5 and content of such an sffort. 

4. The Adminfstraticn's Defense Frouosa1.s.. The possible $25 

billion injection of funds into wadpens procurement next 

year can cause significant probrems in assrring its effsctive 

use. &UAD pohted out that Ft is closely monitoring 

the situation and is in a position to ralate its mrfr tu 

any areas of significantly increased f ur.d ing cpproved by 

Congress. 

The 2PC would liks Tam Morris to develop a plar. f3r effectively 

Eoniraring, a+ hast, the "add anr expenditures proposed 

by the naw Administration so that Si0 rill be a 

position nexc year to advise the appropriation camnittees 

an what WD did with the money. 

5. Civil Agt?l?,CV Major Acquisitions. MASAD explaiced tkat 

it selects civil ajeilcy systems to review based OE regional 

cff ica suggestions, targets of ogtortunity sir= 

faced by other divisions in the ccurse of their work, 

and/or the system's risibility or public concern. 

considers that 15 percent of its issxe area w2rk is acequata 

for civil agiency co~era2.e (plus I? to 15 percent 

for NASA systems) even though about ha12 of the Federal 

:4ASA3 

- 4 - 

89 

3 il

acquisition dollars are civilian related . MASAD indicated 

that the other GAO divisions are actually doing major 

acquisitions work but under their own issue area codes. 

MASAD has no problem with such coding, however, since - 

the programs those divisions review sometimes have an 

acquisition focus, for example, ADP or VA hospital 

activities. 

The PPC asked MASAD to delineate how it decides whether 

ft 02 another divisian should do such work. MASAD stated 

that L€ the issue, in reviewing a major civil acquisition 

is prbarily re%ated to the question of need or utility 

in terms of a program's objective, the GAO division having 

responsibility for the subject issue area does the 

work. If the issue relates to efficient and effective 

procurement of the system once the basic policy decisions 

have been made, MASAD will do the work, The PPC agreed 

to that approach. 

MASAD stated that civil agency major acquisitions need 

considerable GAO audit atfentian since their acquisition 

personnel are typically unskilled in major acquisition 

processes, unlike those in defense agencies who are expert 

in this field. MASAD noted that with 'the recent 

appointment of a new group director, civil agency work 

will get better direction than previously. 

6. OMB Circular A-109=-GAO's'Position. MASAD pointed out 

that it does- not advocate a cookbook or step-by-steu 

procedural approach to A-109. It views the-Cf;cula; as 

a policy guideline for major acquisitions with particular 

"stepsa to be taken when they make sense. The ongoing 

assignment of assessing the impact of A-109 on 

weapens system acquisitions is to evaluate both the 

implementation of the guidelines as well as the impact 

of not following them, This particular job is also 

looking at how A-109 effects the 10 to 15 year period 

it takes to develop rnd acquire a system,. MASAD expects 

the results of this job to help address the Circular' s 

viability as a tool for facilitating acquisitions . 

7. Coordination, The PPC expressed its concern over MASAD 

coordination by referring to the "critical material 

shortages" ME-as an example. MASAD explained that the 

plan's LOE does not accurately describe the issue area's 

concern and, as written, could appear to conflict with 

EMD's and PTJu)'s interests in materials and defense 

stockpiles. MASAD agreed to revise this LOE to more 

precisely reflect its focus and objectives. The concern 

for shortages in this issue area centers on the 

extent that such shortages are considered in the acquisition 

decision making process; not on how to solve 

the materials shortrges per se. Further, MASAD'S interest 

in shortages is broader than the availability 

. 

- 5 - 

90

L 

of raw sater5ls. The availarlity of ctitical prodxtction 

caapoaents-scch as electronic "bits 2nd 

pIec=ss-=are to be scrutinized iI? this L3E for their 

ispact an tfie acquisitioa ptocese. 

AHASAD seat& that it Wag13 work with EHD and PLRD to 

define hterdivisional bcandary agreemects to clarify 

nles on shoPlagas asd an other rzlated areas where 

likeiy boundary problaus .nay arise. W.Sm, in Agoendis 

III-iten 5, ideatifirs the need for such caoz- 

einatioa 'in ether areas aE interest ta bh& ~ S A D 

and b-'ExB. The PPC instrusted EZASAD to submit these 

agreements to OPP. 

8. adtiyear Contractfnq-Status. EfASAD coamented that 

it belies the Congress is; beqinninq to uaaerstand 

the difference be tween nul tiyezr cantrac tfng-which 

1s advantageous to eff fcitct procurgment-an3 reultiyear 

fuuding. MASAD suqgrsts that curren'; Ccngressi00a.l 

aceioa to allow multiyear cantraczing niay be 

-acted by this Conqress and MTSAD. in its multiyear 

caabac+,iq ME, is prepared tc assess the advanttses 

and Sisaiban~qes- as the Congress consicTers ap?roving 

the authority to centract on a mdtiyear basis. MAS= 

add& that (I) such cor-tricting should be considered 

only for relatively sttbls proqrams, and (2) such cgntracting 

sticldd riot be canaidered until after the first 

par of the production phase of a program. The PPC 

agreed with tab posikion. 

9. Access 20 fnforination. Tbe PPC asked 'if @.SAD is faci&q 

any access to records problems in *e issu2 ar3a. 

' .XASSD noted one: the Defense Syste3Iis Acquisition Hevizw 

Council's (DSARC) delikeratiuns loading to asquisitioi 

decisions are not made availabfe to GAG althcugh they 

shodd be. This prsbLem .nay becolae an issue f x resolution 

because the currenc, assigment of XD's affcrdabUity 

pliq will icvol7e DSARC data. The ??C agreed 

tf, assist the divfsior, in resolving the problem, tf 

needed . 

, 

10. Congressional Interest in the Issue Area, The PPC is 

canearned with the Cocgress' Sercoption and use of cur 

work in the area and wants MASAD to keep a record of 

the sgecif ic legislation and appropriation changes nade 

as a result of GAO's systems developnsnt and acquisitlcn 

effo,rs, as well as any changes made by C@D because of 

our work . 

WAD noted -that it believes the Congress, nocably the 

appropriation and armed semizes ccm;niftaes/ subccmmittees, 

make extensive use of the isst?e arec's work, esaecially 

the over 500 questions GAO prepares annually 

on the major veapons systems studied each year. 

- 6 - 

91;

APPENDIX v 

OCR affirmed the hprtance and 'usefulness of . 

MASAD'S activities in the area and noted that 

feedback from the "Hill" was positive. OCR 

did indicate however, that appropriation staff 

believed that our weapons work would be even 

more useful if it was provided in a December/ 

January timeframe. This would allow the staff 

more time to read the material. The PPC, thereforep 

wants MASAD to work with OCR to possibly 

revise our timeframes to issue our reports a 

month earlier for the FY 1983 repgrting cycle.. 

8CR made an additional point; that the division 

distribute its products not only to the principal 

users or audience, but also to other parties who 

%haw or have an interest such as individual staffmembers. 

This would help increase the use of the 

information and reduce possible adverse effects 

to anyone caught unaware of the availability of 

information. 

ll. Specific Job Guidance. The PPC raised questions 

on the following efforts identified in the plan, 

The annual fnfomation report on the 

financial status of major Federal 

(defense and civilian) acquisitions 

(p. 21). The question was whether GAO 

is the proper place for preparing the 

information. While some 3,000 espies 

of the report are distributed, the PPC 

was concerned with the utility sf the 

informatfon. MASAD will assess the 

report's usefulness by querying the 

principal customers and inform OPP of 

the need for GAO to prepare the annual 

report; perhaps another organization 

should be doing this work. 

The planned assignment on the Department 

of Interior's Central Arizona 

$I. 9 billion Water and Power Resources 

Project (p. 25). MASAD agreed to reassess 

the need te do this job since 

the PPC questioned who is interested 

in this job given the politicd nature 

of this project, and what impact would 

GAO have. 

Efforts to establish DOD project manager 

accountability (pp. 34-39) * The 

PPC asked what was being done to zeroin 

on the problem of project manager 

turnover and the accoun tab il i ty of 

individuals for systems cost growth. 

-7- 

',. 

I 

92 

340

.' 

\ 

(a) 

.WAD explasned that the the periad 

for system developtent and ~~cqulsiticn 

runs as long 3s 15 years, but ii system's 

project inanagqr changes about 

every 4 yerrs and as a result accaimtsbilfty 

for ast containment is lost. 

FPCD is involved in a rsview of mill.- 

tary officers performance eoaluatian 

processes, wnich does not include 

weapons systems project manaqers' 

evaluations. The PPC believes work 

iE this subject will eventually aid 

mare efficient acquisitions. Both 

MASAD and FPCD agreed tc consider 

efforts in thiz ar:oa, 

Survey of the plam.ing and acquisition 

practices of the Urban Mass Transportsfien 

Administraticn (p. 51). MASAB 

zgreed that it will not do this planned 

work. sheul0 proposed budget reductions 

be passed by the Ccngress. 

c: 

1 

12, Reqional Off ice Involvement. Severai points were 

rtised which directly and indirectly concerned 

regionaf cffice astiGities relati'te- to the issue 

aPea m 

Regional irsuct to -the urogram plan was used by 

MASAD in developing the plan, The ?PC felt that 

the Los -4ngeles region's documeat was especially 

us&-a2 because ft focused on thz strategic issues 

of systems development and acquisition as opposed 

m 3 jobby-jeb focus. MASAO added that LOEs were 

develeped by Cincinnati and Washington, and Atlanta, 

B2mver and Philadelphia also Frovided substantive 

hput 0 

On training and expertise in the issce area, kP,SAD 

said that botk headsuarters and field txpertive 

are used by the division, Generally, th; reqional 

scsffs have the 'mts and bolts" krzowladqc &out 

issue area aec,ivifies a3 do some division staff. 

Additfondly, hezdquarters group directors are 

experts in the broader issues scch as air land , 

or sea warfare. 

- a - 

93

HASAD makes cextensiTe use of non-CAO defense 

related -ing activities for both be;zdquar-- 

ters and reg5ma.l staffnembers as a way to 

devclap w t b e . MASAD has arranged for LOD 

to allow 84B GAO stas'f to participate free of 

charge in va!rious 30~ Frxuranent courses. 

MASAD cwmented that, it coordinates training 

needs with the GAC ;training section and looks 

tc the irt-ha.use facilities for general, ~verali 

training wkSe vieving the ~OR-GAO faeilikies as 

cost-fs=e opportwzitits for specialized trai.sin.3 a 

The frmt end god procedure as if relates to 

the zutomatx priority ones accorded the annual 

weapons sybte revfek was discnased. The PPC 

and Fc4sAD canccre #a+ automatic priority ones 

for the weaprms wcrk wsrrld end with the weaaans 

systems revkw cycle that begb-a In the Spring 

Q? 1982. Zhe PPC emphasized that the front ecd 

goal is a means to facilitate regiona2 office 

staffing; ie b not a guarantee. 'man thc ann& 

wctapans reviews require "goai" regions I 

the prlcri3 aae shculd not be! nec:tssary. However 

if a mxr-gaal regian should be invslved 

or a region with a soaa could not atkekwise 

staff a re-, the= c priority one designation 

would be justxfiea.. 

13. Use of 3taf5 *sources far Assfqnmrnt Planninq. 

The ?PC h e e d abcut the amolzct of resouces 

MASAD is &&eating to assignment Flaming 

efrror;gh division coctrolled pemanent eodes- 

MASAD aqred that it wculd take z look a!: ths 

need for these job Flanniag rescurzes and let * 

the PPC Yaow, Zhrough CPP, whether it considered 

this investment to be benef icial-especially 

given GAG'S tight budget prespects for next 

ffscal year. 

I 

Approved : 

\&A* + 

Acting ComQ,rqBler General 

of thi Unit'ed 'States 

cc: 

Special Assistant t3 the Comptroller General 

for Cefense Studies, Thomas b. Morris 

DirectQr, Defense Programs Flaming ani Anzlysis 

Richard W, Gatrrann 

Director Re$ ional Relations and Staff Development, 

Wiliiaxn C. Martin 

Issue Area Planning Directors 

- 9 - 

94

( 5 

c 

BIBLIOGRAPHY 

ACQUISITION PROCESS: 

1. "The Maturing of the Acquisition Process", David D. Acker, Defense 

Systems Management Review, Volume 3, Number 3, Sumner 1989. 

2. "Acquisition Process for Major Defense Systems" Bow-Allen and 

Hami ? ton, January 1981 . 

3. Chart -- "the Procurement Cycle", Appendix B Defense Procurement 

Handbook 

PLANNING, PROGRAMMING AM0 EUDGFTING SYSTEM: 

1. 

2. 

CARLUCCI 

T 

1. 

2. 

"The Plannixj, Programing and Budgetdng System {PPBS) -- A 

Programner's Primer --", Di,-ec+,orate of Program - AF/PAX, 

October 7 979. 

"Sumnary of the DOE Planning, Piqgrznming and Budgeting System 

(PPBS)" , Defense 'Systems Management Co? lsge System Acquisi tiorr 

Funds Management Course. 

INITTATIVES : 

"Deputy Secretary of Defense Actions to Improve the-Aquisftfon 

Process" Defense Sys tms Mansgmnt Colt ege , August 22, .I981 . 

Attachments to the April 30, 1981 memorandun! from Feputy Secretsty 

of Defense Frank C. Carlucci . 

INTEGRATED LOGISTICS SUPFORT: 

1. 

2. 

DOD AUDIT GROUPS: 

"Integrated Lcgistics Support Primer", US. Army DARCr3M Pfsteri-a1 

Readiness Support Activity (MEA) 

"Pro Forma Guidelines for %oping ILS Planntng on Major Sys- 

Acqui si ti on Ad1 ts prepaixd by PLRD/SMD, July 1981 . 

1. DOD 

2. DOD 

Directive 7600.2, "Departmsnt of Defense Audit Pol Icies". 

Instruction 7600.3, "hternai Aodi t in the Department of Defonse" . 

3. DOD Directsve 5105.48, "Defense Audit Service (DAS)". 

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Major Systems Acquisition Management Process - Justia GAO Reports

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