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September 24, 2018 By AMK

Federal circuit court confirms agencies’ obligations to prioritize commercial solutions

Palantir USG v. United States may prove to be one of the most significant procurement precedents of the decade.

Affirming the Court of Federal Claims, the Federal Circuit breathed new life into the government’s obligations under the Federal Acquisition Streamlining Act (FASA) to prioritize, to the maximum extent practicable, the acquisition of commercial and nondevelopmental solutions.

Weaning agencies off their historic preference for developmental solutions is critical now more than ever, as it is readily apparent that maintaining the United States’ technological and battlefield superiority depends on its ability to harness technologies from the commercial sector and become a more commercial-friendly business partner.

The decision will have the practical impact of requiring agencies to more carefully document their market research. Palantir will also provide useful leverage for companies seeking to eliminate (whether by negotiation or protest) solicitation provisions that are not accommodating to commercial vendors.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=737610

Filed Under: Government Contracting News Tagged With: acquisition reform, Army, COFC, commercial item, commercial off-the-shelf, commercial products, FASA, Federal Acquisition Streamlining Act, innovation, market research, nondevelopmental, procurement reform, Section 809 Panel, streamlined acquisition process

July 21, 2016 By AMK

Improving acquisition from within: Suggestions from DoD’s Program Executive Officers

This year I asked all of our Program Executive Officers (PEOs) to provide short assessments and recommendations to me directly.
Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics.
This article was written by Frank Kendall, DoD’s Under Secretary of Defense for Acquisition, Technology and Logistics, and appeared in the July-August issue of Defense AT&L magazine.

The result, as it was for the Program Manager Assessments I’ve received for the last 2 years, has been a treasure trove of observations and recommendations covering a wide range of topics. I thought it would be useful and insightful for the entire workforce to see some of these professional, and very frank, comments. I’ve removed most inputs that were about specific programs and edited lightly to make some of the inputs less Service specific. Arranged alphabetically by topic, and presented without comment, here is a sampling of the topics on our senior line managers’ minds as they confront the many challenges we face.

Acquisition Education: Cybersecurity requirements continue to grow impacting virtually everything we do in acquisition from daily workplace activities, to Enterprise Resource Planning (ERP) system development, to weapon system development. Additionally, the Department of Defense (DoD) is required to certify audit readiness in Fiscal Year (FY) 2017. Audit readiness affects every career field in acquisition, not just financial management professionals. Ensure that the Defense Acquisition University curriculum is updated to reflect audit readiness and cybersecurity considerations and requirements for all of the career fields.

Also, an executive-level Acquisition seminar for our senior General/Flag Officers, especially those assigned in the Pentagon, would advance acquisition reform. We consistently find ourselves answering questions to our Service Chiefs and members of Congress that are far outside of acquisition responsibilities. This is a team sport, and DoD would be better served if all of our most senior leaders had a basic understanding of the Defense Acquisition process and their respective roles in it.

Business Cases and AoAs (Analysis of Alternatives): Why would we do both? There is too much complexity and lack of clarity between the Deputy Chief Management Officer and the role of the Office of Acquisition, Technology, and Logistics.

Clinger-Cohen Act (CCA) Compliance: CCA mandates the completion and approval of numerous other programmatic documents as supporting documentation before a program’s CCA can be certified. The Army Chief Information Officer (CIO)/G6 estimates the staffing and approval for a program CCA compliance determination to take up to 120 days to complete. Two supporting documents required for submission for a CCA compliance determination are (1) Test and Evaluation Master Plan (TEMP) and (2) Acquisition Program Baseline (APB). Because of the potential lead time required to support a CCA determination (120 days), we recommend that draft versions of the TEMP and APB be authorized for submission for CCA compliance purposes. We also recommend that significant programmatic changes identified during documentation staffing that would alter the CCA compliance determination be presented during an abbreviated and accelerated update to allow programs to simultaneously staff critical documents without delaying program schedules.

Configuration Steering Boards (CSBs) and Testing: CSBs have been especially helpful in adjusting requirements (both to provide a forum for the deliberate addition of some requirements as well as removing some requirements where they don’t make sense). This process should be extended to include using the CSB process to adjust test plans and requirements as well rather than allowing independent members of the test community virtually unlimited authority to commit programs to cost and schedule of tests that the operational leaders of the Service do not believe are warranted. Similarly, it would provide a forum for those same uniformed leaders to insist on testing that might otherwise be overlooked.

COTS and NDI Acquisition: Financial Management Regulation must be clarified to provide consistent guidance on the use of procurement funds in lieu of research, development, test and evaluation (RDT&E) funds to test Commercial Off the Shelf (COTS) and Non-Developmental Items (NDI). This has tremendous impacts across my portfolio, which is heavily reliant on COTS/NDI and could mitigate additional funding stability risks if properly clarified where both the budget analysts and the lawyers agree on the flexibility to use either procurement or RDT&E to test COTS/NDI.

atl-jul16-article-1-secondaryCyber Security Testing: Cyber testing and the ability to achieve a “Survivable” rating in an official operational test environment continues to be nearly impossible for a Program of Record (POR) to achieve. Test criteria are not well defined and, even if requirements are met, the standards and scope is “independently” determined by the OTA or DOT&E for success. The threat portrayal often exceeds the capabilities of a Blue Force Team (i.e., nation-state threat going against a brigade-level formation), focuses more on “insider” threat of unreasonable proportions, and minimizes the importance of “defense in depth” approach. Recommend better definition for standard cyber rules of engagement at operational test, the allowance for external cyber protection teams, and that test reports focus on the program under test (not the overall “network”).

Fiscal Law Constraints: It is likely pie in the sky, but to operate with a single color of money would greatly improve our efficiency and effectiveness. We spend far too much time trying to discern the gray areas that exist between the appropriations. Functioning with Operation and Maintenance dollars during periods of continuing resolutions and severe cash distribution challenges, makes continuity of support a challenge and results in all sorts of bizarre contract actions. If we operated primarily in an Other Procurement world with narrow definition on true RDT&E (introduction of truly new functional envelopes), we would be much more efficient and effective stewards.

Funding Concerns (10 USC Section 2282): I continue to bring this up to anyone who will listen to me. This pseudo-Foreign Military Sales (FMS) funding is an excellent tool in that it allows us to deliver capability and build Combat Command (COCOM) military partnerships, particularly in countries that can’t afford to invest in our weapon systems. That said, the funding is restrictive in that we need to figure out what we’re going to buy, put together an acquisition strategy, and get it on contract in the year appropriated (which drives some bad acquisition behaviors). The biggest challenge is that we can only use Section 2282 funding to sustain the system for 2 years. After that, the receiving country must create/fund an FMS case or the COCOM must provide funding. Bottom line is that there is a high risk that these great capabilities will be left to rot and quickly become useless.

Funding Stability and Flexibility: For the last several years, we have started each fiscal year under Continuing Resolution Authority (CRA) for 3 to 4 months before the budget is enacted and funding begins to flow. The CRA creates instability in the year of execution because we can’t have any new start programs and the amount of funding available under CRA typically is some percentage of our prior year funding. This instability is exacerbated by the fact that our funding execution is measured against the Office of the Secretary of Defense (OSD) obligation and expenditure goals that do not take into consideration the delay in receipt of funding caused by operating under a CRA. As a result of missing OSD execution goals, funding often is rephased in the out-years, which perpetuates the situation as the cycle has consistently repeated itself and is likely to do so in the future. It would be helpful if the OSD Comptroller could adjust the OSD obligation and expenditure goals to “start the 12-month clock” when the Defense budget is actually passed and not on Oct. 1, as they do now.

Hiring Authority: The agility of a PEO to support its portfolio with appropriate personnel is not adequate with the formal billeting and staffing process and needs to move to a management to budget construct that allows the hiring of additional government personnel.
Human Capital: As the military service begins to reduce force structure, similar reductions are taking place across the civilian workforce. Additionally, there is pressure from Congress to reduce the number of support contractors across DoD. My workforce is comprised of military members (4 percent), core DoD civilians (15 percent), matrixed DoD civilians—combining the traditional and product organization structure—(46 percent) and support contractors (35 percent). With all of these components being driven to reduce numbers and no relief from the mission requirements and expectations, my PEO organization will be challenged severely, even after realizing process efficiencies, to effectively perform the mission unless some portion of the workforce can be stabilized.

atl-jul16-article-1-quote-1Innovation: In intelligence, surveillance and reconnaissance and in working with Special Operations Forces, we are working hard at giving people the tools to bring out their innovative side and give them the confidence to be creative. It is probably the most enjoyable part of my job. I have numerous examples of recent initiatives, but will mention just two of them. First, the Rapid Development and Integration Facility (RDIF) continues to grow as a place where government program managers (PMs) and engineers (sometimes in partnership with small business) are rapidly modifying everything from gunships to B-2s to helicopters. They are taking back the technical baseline, learning how to innovate and growing confidence in our government teams. Second, is the Revolutionary Acquisition Techniques Procedures and Collaboration (RATPAC) forum run jointly between the Air Force and Special Operations Command. Twice a year we select about 50 junior acquisition professionals to attend an intense week of engagement with our most innovative acquisition, warfighter and congressional thinkers. They leave RATPAC fired up to be acquisition combat enablers, and it is really special to see.

Obsolescence: We face an ever-growing challenge dealing with obsolete parts when we build on a COTS-based infrastructure. Components over the life cycle of our programs become obsolete when supply chain providers move on to next efforts or divest in the business area. We have seen cases where we are replacing obsolete components on a system prior to fielding the initial capability. Many vendors are updating their products at an increasing rate and do not maintain or support older versions of their equipment. This is true for both software and hardware. Programs need to ensure they adequately budget for these activities and have the correct personnel to address these issues throughout the life cycle of programs. We also need to engage with vendors early to ensure we have long term sustainment strategies that may include extended lifetime buys for key components early in a program to ensure long-term supportability as well, and address the ability to upgrade at the component level to meet any potential obsolescence issues. Help is needed in supporting continuous low-level modification lines to deal with obsolescence issues.

Protests: I recommend that there be a penalty for protesting to discourage weak protests. Example: paying the DoD’s legal costs, or paying some penalty for the program disruption.

Quality and Clarity of High Level Taskers: I would like to address the quality of taskers or assignments received at my level. Often a broad-based tasker is issued and, as it flows down the chain of command, it is interpreted in various ways by a number of different people to the point where nobody really understands what information is required. These taskers should be clear and concise from the beginning and follow established staffing chains to ensure that we are not wasting precious resources (time, money and people) providing data and information that does not properly respond to the issue.

Quick Reaction Capabilities: This year alone, I had 42 Quick Reaction Capabilities (QRCs) that I managed and reviewed as separate programs and resolved that 5 be closed, had 10 pending closure once 100 percent accountability of assets is resolved, 7 transitions to existing Programs of Records (PORs), and 20 that will continue to be managed as stand-alone QRCs. Note that no QRC comes with organic personnel resources and must be managed with allocated POR resources and the heavy use of matrix and contractor support. This is not a sustainable model. The military Service is working the requirements process that supports these transitions.

However, the alignment with the Program Objectives Memorandum (POM) process inherently results in a 2-year gap that we have only been able to solve because of the availability of supplemental appropriations. If supplemental dollars did not exist, we would have been unable to transition and/or retain QRC capabilities to the degree we have successfully done to date.

atl-jul16-article-1-quote-2The delay in obtaining updated requirements documents hinders the ability to compete in the POM process and exacerbates the gap. A second issue with QRC transitions is balancing the adequacy of testing to support POR transition and milestone decisions. In many cases, these capabilities have been operated effectively for thousands of hours in combat—meeting requirements as specified for military utility, which ought to be the goal of an Operational Test event. Testing a QRC now for integration into a POR, should only verify any changes caused by modifying/integrating on platforms or needed changes to address usability/human factors of the system when we transition from contractor to green suit sustainment/operations. In many cases, we are spending extensive resources (time, money, test ranges, personnel expertise) to retest basic sensor performance on capabilities which have been operating in combat for more than 10 years as a QRC. The Service Test and Evaluation Organization, the OSD Offices of Developmental Test and Evaluation and of Operational Test and Evaluation need to adjust to a more continuous evaluation process and away from the big bang, all-inclusive testing. Finally, overall, the DoD Instruction (DoDI) 5000 series guidance does not address the process of the transition of QRCs to PORs. For example, personnel Concept Plans to support program office manning take forever, material release tailoring is all but nonexistent to deal with COTS, and timely requirements documentation and integratiion of funding into the appropriate Program Evaluation Groups/base are challenging tasks. The aforementioned conditions cause PMs to focus on near-term resourcing and not effective/efficient program management. Help is needed from an institutional perspective to take lessons learned and update policies and provide tailoring procedures for improved transitions.

Reprogramming Authority: Another way to provide additional flexibility would be to allow greater reprogramming thresholds (this requires approval from Congress). Higher Below Threshold Reprogramming limits go hand in hand with giving PEOs/PMs greater authority to move cost savings realized from successful Better Buying Power (BBP) initiatives within our funding lines. This would also act as a strong incentive for the Defense Acquisition Workforce to inculcate BBP principles into our programs.

Requirements Process: I suggest that both the operational and acquisition communities focus serious attention at the most senior levels on implementing a simplified requirements process which better facilitates the rapid technology/threat cycles within the cyber domain.

Risk Management Framework (RMF): The construct has added time to the process with, in my opinion, no added benefit to date. This process needs quick efficiency reviews and updating. Help is needed in making the RMF more efficient and shorter.

The new RMF process (which replaced the DoD Information Assurance Certification and Accreditation Process), providing for certification and accreditation of weapon systems, has been too unwieldy for the speed and agility needed in approving cybersystem solutions. Specifically, we have identified the following issues with the RMF process as applied to cyber weapon systems:

  • RMF levies heavy requirements for monitoring, software updates and policy controls that are less bound by operational concerns than previous systems.
  • RMF causes a large resource burden of time and manpower. With the volume of work entailed in RMF, it is difficult to make consistent progress or to develop reliable schedules to inform our operational user. Additionally, the unplanned burden on program offices to apply RMF is taking resources from fixing user issues and addressing modernization needs.

There was little structure put into phasing the RMF requirement into weapon systems. The full requirement was mandated with less than 2 years to prepare, with limited waiver opportunities provided.

While new systems in development can accommodate RMF during the design process, legacy systems were not designed with RMF security controls in place, so there are significant programmatic and operational impacts to meeting the RMF controls. Thus, applying RMF to currently fielded operational systems puts undue burden on the operational user.

Control of and accountability for system cybersecurity is spread over numerous organizations and is poorly integrated, resulting in diminished accountability and unity of command and control for cybersecurity. These overlapping roles create ambiguity regarding whether the commander or the authorizing official can make the final decisions regarding risk to a mission.

The coordination process for RMF approval packages continues to evolve. Changes in expectation, standards and formats are not communicated well, and this often creates much rework, further delaying approval and impacting program cost and schedule.

The vast majority of our systems currently are accredited under the old structure and the RMF process does not allow previous accreditations to be easily absorbed into the new structure.
There has been a shift in focus from simply managing risk to now ensuring all facets of system vulnerabilities are addressed. While this will improve cybersecurity, there is simply not enough manpower to adequately perform all of the required processes, specifically within the Approving Official and the Security Compliance Assessor communities.

atl-jul16-article-1-quote-3Approving Officials have not been issuing Plans of Actions and Milestones during this transition process, which has led to an expiration of Authority To Operate during the lengthy process.

In considering improvement opportunities since RMF has been in use and lessons learned have become available, I suggest that the application of RMF to currently fielded cyber weapon systems be re-examined and tailored to reduce heavy RMF resource demands and impact to the operational user. In addition, as stated earlier, it is imperative that the acquisition and life-cycle management tools and processes for both new and fielded cyber weapons systems be streamlined to maximize speed and agility within reasonable levels cybersecurity risk.

Sustainment in DoDI 5000.02: I see a difference between a system in the sustainment phase and a sustainment program. Because DoDI 5000.2 is silent on sustainment programs, we sometimes treat sustainment programs the same as efforts to modernize a program in the sustainment phase, in terms of systems engineering, milestones and documentation.

Modernizing a program in the sustainment phase usually fits pretty clearly into one of the “Defense Acquisition Program Models.” But a sustainment program such as a Service Life Extension Program, Diminishing Manufacturing Sources Program or a Contractor Logistics Sustainment Program doesn’t fit well within those models. Yet there are some nuances, best practices and common tailoring that could apply to these types of programs. I thought the “model” concept was a great addition to the DoDI 5000 series, so I think adding a model for sustainment type programs would be helpful. I have also recommended this at the military Service level to address in our documents. I see a lot of teams struggle in this area.

Tailoring: However, although you and other senior leaders continue to reinforce the importance of tailoring the acquisition process to the specific and unique characteristics of the product being acquired, the rules and policy are frequently interpreted as inflexible and prescriptive. As additional acquisition reform provisions are considered, we should look for ways to better institutionalize the expectation for tailoring, particularly as it applies to the acquisition of non-developmental or minimally modified COTS systems.

Workforce Development Ideas

Acquisition “Whiteboard” Sessions: I found that often when I received milestone packages through the staffing process, the acquisition strategies weren’t tailored to the most effective approach to develop or acquire the system. In order to prevent frustration of the workforce and get the top level concepts right from the beginning, I began hosting “Whiteboard” sessions to ensure everyone had a common understanding of the strategy. I run these much like the military Service runs After Action Reviews by serving as a facilitator—asking shaping level questions of the program stakeholders (from the PM, legal, contracting, etc.) and allowing them to shape the strategy through their answers. The level of innovation and quality of the milestone packages has dramatically improved. I’ve received very positive feedback on the learning value of these sessions and encouraged my subordinates to replicate the process at lower levels.

atl-jul16-article-1-quote-4Acquisition Categories II and III Configuration Steering Boards (CSBs): Much of the equipment we acquire is commercial or commercially based. On several occasions, we received approved requirements documents that specified requirements substantially outside commercially available features. Our engineers conduct industry Requests for Information, coordinate with commercial testing facilities, and employ analytical tools to identify requirements that are driving cost and risk. We then organize a CSB with the appropriate one-star level operational community proponent, along with virtual representation from the Service staff to review the data analysis. In each case, we’ve been able to temper the requirements to only the critical capabilities, thereby reducing programs’ costs and technical risks while allowing them to move forward without risking lost funding or schedule delays.

Junior Employee Shadowing Program: Each PM within the PEO nominates high potential GS-12/13 employees to shadow me for 2 weeks. These employees can attend all meetings that the PEO participates in and get a good sense of how to think critically about the unique facets of each program and how these considerations shape acquisition strategy, contract type, contract incentives, and source selection approaches. To date, I have had 24 shadow participants, and I have already seen evidence of grassroots movement inside their home organizations in taking more innovative approaches to acquisition strategies.

Topical Town Hall Meetings: I have held town hall meetings quarterly, and I always highlight a number of innovative accomplishments in acquisition from several of our individual PMs. As an overarching theme, I’ve suggested that our acquisition professionals should treat every decision they make as if it was their own money. I’ve continued to encourage them to challenge requirements and approaches that don’t make sense based on their personal experiences both in acquisition and in their daily lives.

Conclusion

As with the Program Manager Assessments, I have responded to each of the PEOs individually. In addition, I have asked some of the writers to work on follow-up actions to explore solutions to the problems they raised, or to implement their specific suggestions. My last article and e-mail to the workforce talked about how real acquisition reform has to come from within and it has to take the form of continuous improvement on many fronts. This is one more example of what that looks like in practice.


To print a PDF copy of this article, click here.

Filed Under: Government Contracting News Tagged With: acquisition reform, acquisition workforce, AT&L, continuing resolution, cybersecurity, DoD, flexibility, innovation, nondevelopmental, obsolescence, OSD, procurement reform, professional education, protest, quick reaction capabilities, risk

September 4, 2015 By AMK

DoD’s use of commercial acquisition practices — When they apply and when they do not

The Department of Defense (DoD) generally buys major weapon systems through the defense acquisition system, a process that is highly tailorable but still built around the assumption that the DoD will compensate suppliers for product development, contract through Defense Federal Acquisition Regulations (DFARS) and be heavily involved in all aspects of the product life cycle.

A number of organizations—including the Defense Business Board, some think tanks and some in Congress — have encouraged or recommended greater use of commercial practices. There are indeed times when using more commercial practices makes sense, and we should be alert to those opportunities — in any aspect of defense procurement.

The author of this article is Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics.
The author of this article is Frank Kendall, Under Secretary of Defense for Acquisition, Technology and Logistics.

There are three aspects of “going commercial” that I would like to address — first, purchases based on the fact that an item is offered as a commercial product; next, the need to access cutting-edge commercial technologies; and, finally, those cases where we can take advantage of private investments to develop products we might traditionally have purchased through the normal multi-milestone acquisition system.

Our policies and regulations try to strike the right balance between taking the steps needed to protect the taxpayer from overpaying while simultaneously avoiding discouraging commercial firms from doing business with DoD by asking for more information than they are willing to provide. For purely commercial items widely and competitively sold on the open market, this is easy. For thousands of items, from office furniture to cleaning supplies to laptop computers, the DoD pays commercial prices (subject to negotiated adjustments for quantity-based discounts, etc.) without inquiring as to the costs to produce the products. Other items are more clearly and purely military products, such as a replacement part for a howitzer or a low observable fighter component. The gray area between these extremes represents a problem in first determining that a product can be considered commercial, and, then, if there is no competition for setting the price for that product, obtaining adequate information from the supplier and other sources to determine that the price charged is fair and reasonable. We are working to expedite these processes, make them more predictable, and provide technical support to the procuring officials who must make these difficult determinations. I’m afraid that we will never be perfect at this, given the vast number of items the DoD procures and our limited resources, but we must and will improve our performance while preserving a reasonable balance.

It is clear that in many areas of technology the commercial market place is moving faster than the normal acquisition timeline for complex weapon systems. Examples include information technology, micro-electronics, some sensor technologies, some radio frequency devices and some software products. In most cases, these technologies will enter our weapon systems through one of our more traditional prime contractors. Our prime contractors and even second- and lower-tier suppliers are looking for a competitive advantage, and, when commercial technologies can provide that advantage, they will embed them in their products.

Competition among primes can give us access to current commercial technologies early in a program, but we often move to a sole-source situation when we down-select for Engineering and Manufacturing Development (EMD), reducing the incentives for inserting state-of-the-art commercial technologies. We can sustain these incentives by insisting on modular designs and open systems, both emphasized under the Better Buying Power initiatives. As part of this process, we also must manage intellectual property so we don’t experience “vendor lock” in which we cannot compete upgrades without going through the original contractor.

Accessing Commercial Technology

The DoD also is taking other steps to improve our access to commercial technology. These include opening the Defense Innovation Unit–Experimental (DIU-X), in Silicon Valley, investments through In-Q-Tel and increased emphasis on the productivity of programs like the Small Business Innovative Research program. The DoD also is evaluating the Congressionally-sponsored Rapid Innovation Fund (RIF) and will make a decision this year as to whether to include a request for funds for a Reduction in Force in the Fiscal Year 2017 President’s Budget. All these steps are designed to open the DoD to more timely and broad commercial technology insertion.

The last of the three “going commercial” topics I would like to cover involves situations in which the DoD substitutes a more commercial acquisition model for the ones depicted and described in DoD Instruction (DoDI) 5000.02. In some cases, industry, traditional defense contractors and others will invest to bring a product to the DoD market, without DoD shouldering the direct cost of product development. The critical motivation for these independent businesses decisions is the prospect of reasonable returns on the corporate investment.

Cost Sharing

Sometimes, especially when there is a mixed DoD and commercial market for the product, a cost-sharing arrangement may be appropriate in a public private “partnership” for development. DoD acquisition professionals need to be alert to these opportunities and prepared to analyze them and act on them where they benefit the government. When we do this, we may need to be innovative and think “outside the box” about business arrangements and contract structures. In these cases, the structure and processes in DoDI 5000.02 may be highly tailored or even abandoned. I’ll illustrate this concept with a few real-life examples.

As we moved down the path of DoD-funded research and development for tactical radios under the Joint Tactical Radio Systems program, we discovered that in parallel with the DoD-funded programs of record, some companies had invested their own money to develop and test products that used more advanced technologies than the Programs of Record. These essentially commercial product development efforts offered the prospect of cheaper and higher performance systems, without a DoD-funded development program. As a result of this, we changed the acquisition strategy to allow open competitions and stressed “best value” source selections so we could take advantage of the most cost-effective radios available.

Our “system” had a little trouble adjusting its planning to this type of acquisition. The Developmental Testing people wanted to perform a standard series of developmental tests, even though the development was complete. Operational Test people wanted to test each competitor—before source selection. Program oversight people wanted to do Milestone (MS) A and B certifications, even though there was no reason to have an MS A or B.

What we needed, and where we ended up, was a competitive source-selection process for production assets that included an assessment of bidder-provided test data, laboratory qualification testing, and structured comparative field testing to verify the offered products met DoD requirements. There were minimum requirements that had to be met; once that was established, a bidder would be in a “best value” evaluation for source selection for production. It was a little surprising to me how wedded our workforce, in both the Service and the Office of the Secretary of Defense, was to the standard way of doing business—even when it didn’t really apply to the situation.

The next example involves space launch. The DoD is working to bring competition into this market. That opportunity exists because multiple firms have been investing development funds in space launch capabilities for both commercial and DoD customers. We acquire space launch as a service; there is no compelling reason for DoD to own launch systems. What we need is highly reliable assured access to space for national security payloads, which can be acquired as a service. For some time, we have been working to certify a commercial launch company to provide national security launches. That milestone recently was achieved for the first “new entrant” into national security launches in many years. The DoD did not fund the development of the new entrant’s launch system, but it did provide support through a Cooperative Research and Development Agreement for the certification process.

More recently, the need to remove our space launch dependency on imported Russian rocket engines has caused the DoD to evaluate options for acquiring a new source of reliable competitive launch services. Through market research, we know there are options for private investment in new launch capabilities but that industry’s willingness to develop the needed products may depend on some level of DoD funding. The DoD intends to ask for industry bids in a very open-ended framework for whatever financial contribution would be necessary to “close the business case” on the guaranteed provision of future space launch services. This novel acquisition approach will work only if the combined commercial, other government customer, and military launch demand function can provide enough anticipated launch opportunities to justify industry investment. This effort is a work in progress, and we don’t know if it will prove successful. If it does succeed, it will provide for the continuing viability of two competitive sources of space launch services—without the need for DoD funding and executing a new standard DoD development program for a launch or propulsion system.

Another example from the space area is the Mobile Ground User Equipment (MGUE) for GPS III. These GPS receiver electronics “chips” will be ubiquitous in DoD equipment and munitions. The technology also will be relevant to commercial GPS receivers that will be embedded in millions of commercial devices. Here, also, the DoD has been proceeding with a standard DoD-funded development program with multiple vendors developing MGUE risk reduction prototypes leading up to an EMD program phase. The combined market for this capability is so great that the competitors proceeded with EMD on their own, without waiting for a DoD MS B or contract award. They did this so successfully that the EMD phase of the program was canceled in favor of a commercial approach that limits the DoD’s activities to compliance testing of the MGUE devices and integration of those devices into pilot platform programs.

The final example I’ll cite is the Marine Corps decision to defer the program to acquire a new design amphibious assault vehicle in favor of a near-term option to acquire a modified nondevelopmental item (NDI). The Marine Corps concluded, I believe correctly, that the technology was not mature enough to support the Corps’ desired performance levels and that a new product would be unaffordable. As a result, the Marine Corps opted to first evaluate and then pursue a competitively selected near-NDI alternative. This is more military than commercial off-the-shelf, but the principle remains the same. This program does include some modest DoD-funded development to, for example, integrate U.S. communications equipment and test for compliance with requirements, but it is a highly tailored program designed to move to production as quickly as possible and with minimal DoD costs.

The Common Thread

What all these examples have in common is the DoD’s recognition that an alternative path—outside the normal DoDI 5000.02 route—was available and made sense from both a business and an operational perspective. Once such an opportunity is recognized, a more commercial approach can be adopted, but this requires some novel thinking and open-mindedness on the part of the DoD acquisition team. We cannot “go commercial” for all of our acquisitions or even most of our weapons systems. The normal process works best for the standard low-volume, highly specialized, cutting-edge and uniquely military products that populate the DoD inventory. The business case simply isn’t there for industry to develop and offer these types of products without DoD development funding. In all standard DoD acquisitions, however, we need to proactively look for ways to embed or insert the most current commercial technologies. Where commercial approaches are justified, we need to spot and capitalize on the opportunity.

This article was reprinted from the September-October 2015 issue of Defense AT&L Magazine.  To print a PDF copy of this article, click here.

 

Filed Under: Government Contracting News Tagged With: acquisition planning, acquisition strategy, AT&L, Better Buying Power, commercial item, commercial products, cost-sharing, DFARS, DoD, DoDI 5000.02, market research, nondevelopmental, product development, R&D, SBIR

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