LESSON OBJECTIVES

Requirements generation is a necessary first step in the three major decision making support systems of the acquisition process (Requirements Generation System, Acquisition Management System, and the Planning, Programming & Budgeting System). Prior to initiation of the Acquisition Management System, mission needs (warfighting deficiencies and/or technological opportunities, i.e. requirements) are identified through mission area assessments of current and projected capabilities.

Nothing is procured without documented needs/requirements.

This acquisition process is an extension of the National Security Policy.

It provides a method of translating mission needs into a well-defined, system-specific requirement.

- There are several players in the acquisition process. Some are military, government, and some are commercial actors. Here is a lsit of the major players.

The Defense Industry

• Motivated by profit, continued business, and perhaps patriotism
• Industry exists to make a profit.
• Want to stay in business and want to have as little interference as possible. The defense industry looks with envy at its commercial sisters who don't have legions of auditors, inspectors, staffers, and contract administrators looking over their shoulders.

Program Manager

• He wants to field something.
• He is judged as having a successful program if, at the end, the troops get a new piece of hardware.
• Cost, schedule, and even performance mean nothing if the hardware is not fielded.

Military Services and Ultimate Users

• The services are tasked with equipping units for use by the combatant commanders-in-chief and hence are required to represent the user's interests.
• They care above all about getting equipment that will give them a warfighting advantage.
• Ultimately, this means high performance on a rapid schedule.
• Cost and everything else are secondary.

Office of the Secretary of Defense (OSD)

• Cares first about executing the acquisition contract. This minimizes risk and ensures control. All acquisition programs have signed a contract, either explicitly the Defense Acquisition Board (DAB) Acquisition Decision Memorandum (ADM) or implicitly in various program and budget decisions. OSD expects to see these contracts carried out and works to minimize risk of deviation.
• Second, OSD cares about the affordability of the overall defense program. Ultimately all programs must fit within the allocated top line, and there are always more programs than there are resources. Program cost, therefore, gets close scrutiny.
• Finally, jointness, and the interoperability it implies, offers the prospect of better joint warfighting (of great interest to the Joint Staff particularly) and of common equipment (and therefore lower costs).

Congress

• Moved primarily by its fiduciary responsibilities; that is, the need to ensure public moneys are seen to be used in ways consistent with national purposes. Here the end does not justify the means; the means must stand on their own.
• This concern is often characterized by a focus on fraud, waste, and abuse.
• The Congress, therefore, believes without explicit guidance and close scrutiny the department will waste money.

- Issue Milestone 0 acquisition Decision Memorandum (ADM) and subsequent Program Management Directive (PMD)

- Initiates Phase 0

- Appropriate authority approves use of short term concept studies be undertaken

Establishes Phase 0 exit criteria

• Phase 0: Concept Exploration Phase

- Initial phase of the acq process

- Emphasis is on paper studies of alternative approaches to fulfill MNS

- Initial ORD. Acq Strategy, and initial Acq Program Baseline (APB), and Cost as an Independent Variable (CAIV) Objective, are prepared

-- Acq Strategy: provides info essential for future milestone decisions. Focuses on events, linking contractual goals and milestone decisions with development and testing.

-- APB: identifies initial proposed cost, schedule, performance and support parameters

• Milestone I: Approval to Begin New Acquisition

- Milestone I approval begins a new acquisition program

- At this time, acquisition strategy is approved, as well as Cost as an Independent variable objectives, and initial APB

- Phase I exit criteria is established

• Phase I: Program Definition & Risk Reduction Phase

- Most promising solutions identified during Phase 0 are further explored

- SPO manning is increased and integrated Product Team (IPT) is established, dedicated to this acquisition

- Objective of this phase are to prove critical technologies and processes; better define system characteristics and capabilities; establish proposed development baseline containing a better cost, schedule and performance estimates; identify preferred systems or best solution to identified need

- Prototyping and testing and evaluations are used to demo and validate the concept

• Milestone II Approval to enter Engineering and Manufacturing Development (EMD)

- Process of Milestone approval similar to Milestone I

- Appropriate approval authority approves acquisition strategy, CAIV objectives, and APR

- All the documents will likely be updated based on what has occurred during Phase I

- Phase II exit criteria is established

• Phase II: Engineering and Manufacturing Development Phase

- Objectives are to

-- Translate design approach from previous phase into a stable system design

-- Validate the manufacturing process

-- Demonstrate the system produced will meet specifications, satisfy minimum acceptable operational performance factors

- Amount of resources (money and personnel) increases dramatically

- Testing is a major part of EMD effort

-- Both development and Operational Test and Evaluation (DT&E, OT&E) testing takes place

-- Bulk of testing is OT&E

- Low rate initial production occurs during this phase, if it occurs at all

• Milestone III: Production/Deployment Approval

- Process of Milestone approval similar to Milestone I and II

- Appropriate approval authority approves production of a weapon system deployment of an information system, an updated APB

- Exit criteria for Phase III is established

• Phase III: Production Fielding Deployment and Operational Support

- Bulk of funds are expended during this phase

- Production line is hot

- Products are delivered

- Products become operational

-- They are maintained, overhauled and if required are modified

- Life of a system is finite, but life can be extended if modifications and other product improvements are made

Extracted from "Acquisition Reform: It's Not as Easy as It Seems", by Mark Cancian. The article discusses the different objectives that the acquisition system is designed to achieve, the priorities of the different players, the trade-offs among the priorities, and finally looks at future reform prospects.

- Different players of the acquisition process have different goals and priorities. The current system represents trade-offs among many competing, often contradictory goals

- Before going further it is worthwhile reminding ourselves how the defense industry is different.

• There is one buyer-a monopsony-and hence no true market.
• For any particular item, there is often only one or at most a very few sellers.
• The user's "bottom line" is not financial but performance. Competition therefore strongly emphasizes performance over price.
• Major contracts are signed years before actual results are available and therefore must be based on estimates of cost, schedule, and performance.
• Performance is difficult to judge, and is often judged subjectively, except for the rare occasions when the nation actually uses military force on a large scale.
• The enterprise operates with public funds, the use of which is held to a different standard than private funds.
• Decisionmaking power is diffuse, being shared between the executive branch and the legislative branch (with its many committees and subcommittees).
• Decisions and operations are conducted in the open, under great public scrutiny.
  

- So what are the competing goals that the system is trying to accomplish? The number of items could be virtually infinite, but the list below is a good start.

• Performance (Faster, Higher, Farther)-There is always pressure to push the envelop of technology. Sometimes this is in response to a particular threat. At other times it is a more general desire to gain a battlefield advantage against potential opponents.
• Cost Minimizing-Obviously, the less something costs, the more you can buy.
• Schedule-Anything worth having is worth having immediately.
• Risk-Minimizing the possibility that something goes wrong.
• Control-Allowing senior officials adequate warning of possible problems and the means to intervene to correct them.
• Jointness and Interoperability-Able to be used by more than one service and to interact with the equipment of other services.
• Industrial Base-Ensuring that the defense industry stays in business and can produce needed equipment in the future.
• Fairness and Propriety-Treating all participants properly. Because this is a public, very open process, all decisions and procedures must be justified, not only to the few involved but to the public and its representatives.
• Socioeconomic-Advancing certain national goals such as encouraging small businesses, promoting minority- and women-owned businesses, strengthening unions, and buying US products. These goals are often regarded as illegitimate by people inside the system because they have no direct bearing on national security or on acquisition.

- The essence of acquisition is a trade-off among desirable goals. Three high visibility examples here make the point.

Black programs (requiring very high security, special access)

• The acquisition system for black programs is attractive to some because many of the reviews, analyses, and outside interference of the traditional system are removed.
• Black programs trade off control and frequently cost for an accelerated schedule and a much higher acceptance of technical risk.
• They can have tremendous successes. The F-117, for instance, was a black program. It was developed quickly and overcame large technical problems (e.g., two of the first prototypes crashed) that might have terminated an open program.
• However, there is a downside, as the A-12 experience showed. Here the lack of visibility into the program, the lack of reviews and analysis (among other managerial failings) and the compartmentation of information allowed serious problems to develop and grow. When they became known, it was more attractive to cancel the program than to try to save it. The result was a severe blow to naval aviation.

Dual use technologies and commercial off-the-shelf (COTS) technologies

• They offer the prospect of using a much larger industrial base and of harnessing the vitality and drive of the commercial sector. Foe certain kinds of products where technology is moving rapidly, commercial products give both lower price and higher performance. Commercial products, even with their limitations, come from processes that are much more agile than the defense acquisition system. However, in other areas commercial products often involve a trade-off.
• Cost may be lower, and schedule may be faster. However, performance, broadly defined, is also often lower. Commercial products are not built to the demanding environmental and stress standards attained by military articles.
• COTS equipment will frequently lack all the features that the military desires. A large-scale example would be buying commercial aircraft like the 747 instead of the C-17. The 747 has impressive capabilities and is much cheaper. However, it lacks a wide range of capabilities that the C-17 has, for instance: the ability to handle oversized and outsized cargo, the ability to land on short and rough fields, self-protection capabilities, the ability to back up on an incline, and many others.
• Military Specification (milspec) items are, by definition, interoperable with other military items. COTS items may not be interoperable if there is no industry-wide standard.
• Finally, commercial products rarely come with the documentation and support that milspec items do.
• None of this means that COTS acquisition is not worth doing. It does mean there is a trade-off that is often unrecognized. Indeed, this is particularly true with COTS because the implication is often made that the department can get the same equipment for less money. This is rarely true. The department can get different, often less capable, equipment for less money.

• Reductions in oversight, the essence of many reform notions, mean that more things will go wrong and that they will remain unseen longer.
• If viewed from purely a cost-effectiveness standpoint, however, one could easily believe that less oversight would be more effective.
• But as the earlier analysis of system goals and players' values indicated, cost effectiveness is only one criterion. Public visibility and fiduciary responsibility to the taxpayers also count heavily.
• The perception of fairness and of propriety are also important for public endeavors and an elaborate system of controls helps to ensure this.

AFROC

JROC

Validation is the formal review process of the Mission Need Statement (MNS) by an operational authority other than the user to confirm the identified need and operational requirement.

A Mission Need Statement is required for all potential materiel acquisition programs.

- Chiefs of the Military Services, Heads of Defense Agencies, and Commanders in Chief of Unified Commands validate and approve their own Mission Need Statements for potential ACAT II and III programs. In the Air Force, the Air Force Requirements Oversight Council (AFROC) reviews all AF MNS and Operational Requirements Document s(ORDs).

- The Joint Requirements Oversight Council, chaired by the Vice Chairman of the Joint Chiefs of Staff, is the Mission Need Statement validation and approval authority for potential ACAT I programs.

- For ACAT IA programs, the Office of the Secretary of Defense Principal Staff Assistant5 or the Joint Requirements Oversight Council may be the validation authority

The Operational Requirements Document (ORD) is usually validated and approved by the same operational validation authority that reviewed the Mission Need Statement.

- However, the Joint Requirements Oversight Council normally delegates Operational Requirements Document validation and approval for ACAT I and IA programs to the service chiefs.

- Normally, Operational Requirements Documents are first submitted to the operational validation authority at Milestone I, and updated for each subsequent milestone.

- The Operational Requirements Document is used to update the program baseline and develop performance specifications for the contract during each acquisition phase.

- All Operational Requirements Document key performance parameters are validated by the operational validation authority and included in the Acquisition Program Baseline starting at Milestone I.

1. Comprehend the capabilities and limitations of US military forces across the range of military operations, to include command relationships, force development and organization, and the concepts of deployment, employment, sustainment, and redeployment (OPMEP Learning Area 1).

2. Comprehend the systems and understand the processes supporting 21st century battlespace and how they are integrated to achieve operational-level joint force missions (OPMEP Learning Area 5).

READINGS

1. Cochrane, Charles B., Defense Acquisition Policy--A More Flexible Management Approachî (os513r1.doc). OS Coursebook
2. Cancian, Mark, Acquisition Reform: It's Not As Easy As It Seems (os513r2.doc). OS Coursebook
3. Requirements Generation Briefing by BGen Claude M. Bolten Jr. (os513dla.ppt)
4. Acquisition Toolbook (acqustn.tbk)

READING RATIONALE

• Cochrane, in "Defense Acquisition Policy--A More Flexible Management Approach," provides an overview of the DOD acquisition system, its policy, and procedures.
• Cancian's article examines the actors in the acquisition system, their differing motives and goals, and the tradeoffs that result.
• General Bolten's "Requirements Generation" presentation describes how requirements are generated for weapon systems, which initiates the acquisition cycle and ultimately results in new or improved weapon systems.
• The Acquisition Toolbook presents the basic information about the phases and milestones of the acquisition cycle.

Thesis: The DOD acquisition system is a complex array of actors, laws, and regulations; heavily influenced by domestic and foreign policy; and fed by US tax dollars, which turns concepts into weapon systems. This acquisition process is an extension of the National Security Policy.

Main Point I: The acquisition process is how the DOD buys material (and services) for t