A Report by the Assessment Panel of the

	 	 Defense Acquisition Performance

	 	 Assessment Project

	 	 For the Acting Deputy Secretary of Defense

	 Defense Acquisition

Performance Assessment

Executive Summary

December 2005

Panel

Lieutenant General Ronald Kadish, USAF (Ret) 

Panel Chairman

Dr. Gerald Abbott

Mr. Frank Cappuccio

General Richard Hawley, USAF (Ret)

Gerneral Paul Kern, USA (Ret)

Mr. Donald Kozlowski

Advisors

Dr. Francis W. Ahearn

Dr. Linda S. Brandt

Ms. Judy A. Stokley

Staff

Mr. J. David Patterson, Project Director

Ms. K. Eileen Giglio, Deputy Project Director

Mr. Alfred G. Hutchins, Jr.

Colonel Alan Boykin, USAF, Diretor of Staff
ii Defense Acquisition Performance Assessment Summary
Defense Acquisition Performance Assessment Summary iii

Foreward

On the surface, defense acquisition appears to have little in common with commercial acquisition. For starters, 

defense acquisition occurs in a monopsony. Further, it is replete with mini-monopolies. (From how many places 

could one have purchased, say, an additional B-2?). Defense acquisition also operates in a governmental system 

that intentionally traded optimal efficiency for strong checks and balances – such as those implicit in separating the 

Legislative and Administrative branches. Nonetheless, there are certain fundamentals of sound management which 

are applicable virtually everywhere, including in the defense acquisition process. They are just much more difficult 

to apply in government, where the stakes are higher, authority less hierarchical, and the spotlight much brighter.

The problems in defense acquisition – and there are many – tend to be widely misunderstood. Outright 

dishonesty, for example, is extraordinarily rare...but when it occurs its impact is particularly devastating. Over the 

years, toilet seats, coffee pots and screwdrivers have also received an abundance of ink, but they are not the problem 

either.

A number of studies of the defense acquisition process have been conducted since the genre was born with the 

Hoover study in 1949. There is remarkable agreement as to the problems which need to be addressed. The 

difficulty resides in having the will to do anything about those problems.

Gil Fitzhugh’s study in 1966 observed that a fundamental problem is that everyone is responsible for everything 

and no one is responsible for anything. Dick DeLauer’s study in the 1970’s concluded that the problem was 

“turbulence” – perpetually changing budgets, schedules, requirements and people. Dave Packard’s somewhat 

more recent study pointed to the shortage of experienced managers as the root cause of many problems. And in 

a particularly indiscreet moment, I once described the defense acquisition process as “the epoxy that greases the 

wheels of progress.”

But it is important to note that in spite of such criticisms, the Department of Defense’s acquisition process has 

provided our armed forces with the equipment that is the envy of the world’s military forces. It’s just that it could, 

and should, do even better.

The present review, requested by Secretary England (himself deeply experienced in acquisition management), 

affords a relatively unique opportunity. Change is almost always the result of a culmination of pressures, and rarely 

are those pressures greater than today as our nation conducts multiple combat operations, recovers from hurricanes, 

counters terrorist threats here at home, and endures intense budgetary demands.

Experience suggests that promising areas to look for progress include seeking experienced, capable managers; 

supporting basic research; starting fewer and finishing more projects; reducing turbulence; assigning clear 

responsibilities; providing financial reserves; incrementally budgeting to milestones; accepting prudent risks; 

controlling cost; disciplining requirements; utilizing appropriate contractual and competitive instruments; 

emphasizing reliability; creating fast-tracks; and, as always, insisting on ethical comportment.

Our nation’s military forces may be called upon to fight outnumbered, to fight at great distances from home, and 

to win with very few casualties. Only with a properly functioning defense acquisition process can this be possible. 

The present review, as was the case with its predecessors, will ultimately be judged not by how well it identified 

the problems, or even how well it points to the solutions. It will be judged by what it (the DAPA Project) actually 

makes happen.

 Norman R. Augustine
iv Defense Acquisition Performance Assessment Summary
Defense Acquisition Performance Assessment Summary
vi Defense Acquisition Performance Assessment Summary
Defense Acquisition Performance Assessment Summary vii

Index

Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Major Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Integrated Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Performance Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Perspective and Commitment . . . . . . . . . . . . . . . . . . . . . . . . 15
viii Defense Acquisition Performance Assessment Summary
Defense Acquisition Performance Assessment Summary 

Executive Summary

Context

For nearly 60 years the Department of Defense has been 

engaged in a continuing self assessment process to identify 

and improve the way it acquires weapon systems. There 

have been frequent major acquisition reform initiatives 

responding to concerns that acquisition costs are too high, 

that the Department is buying the wrong things, or that the 

organization’s process is too slow.

During Secretary of the Navy Gordon England’s confirmation 

hearings to become Deputy Secretary of Defense, discussion 

with Senators on the Senate Armed Services Committee 

highlighted the main issue, that both Congress and 

Department of Defense senior leadership have lost confidence 

in the Acquisition System’s ability to determine what needs 

to be procured or to predict with any degree of accuracy what 

things will cost, when they will be delivered, or how they will 

perform. The House and Senate Fiscal Year 2006 Defense 

Authorization Committee Reports raised concerns about the 

ability of the Department’s Acquisition System to develop and 

deliver required capabilities when needed and at predictable 

costs. These reports further state that addressing symptoms 

one program or one process at a time is unlikely to result in 

substantial improvement. 

Task

On June 7, 2005, the Acting Deputy Secretary of Defense, 

Gordon England, authorized a sweeping and integrated 

assessment to consider “every aspect” of acquisition, giving rise 

to the Defense Acquisition Performance Assessment Project. 

The centerpiece of the project is a panel governed by the tenets 

of the Federal Advisory Committee Act of 1972 (Public Law 

92-463).

“The committee is concerned

that problems with organization

structure, shortfalls in acquisition

workforce capabilities, and

personnel instability continued

to undermine the performance of

major weapons systems programs. 

...Problems occur because

Department of Defense’s weapon

programs do not capture early on

the requisite knowledge that is

needed to efficiently and effectively

manage program risks....The

committee believes that one answer

can be found in the inability of

the Department to address the

budget and program stability issues. 

....Funding and requirements

instability continue to drive up

costs and delays the eventual

fielding of new systems.”

Senate Report 109-069 - S1042

Title VIII Acquisition Policy,

Acquisition Management and

Related Matters - p. 341

May 17, 2005

“... The committee is concerned

that the current Defense

Acquisition Management

Framework is not appropriately

developing realistic and achievable

requirements within integrated

architectures for major weapons

systems based on current technology,

forecasted schedules and available

funding .....”

House Conference Report #

109-89 - HR- 1815 Title VIII

- Acquisition Policy, Acquisition

Management, and Related

Matters p. 355 May 20, 2005
 Defense Acquisition Performance Assessment Summary

How We Approached the Task

The task assigned to the panel, “to consider every aspect of acquisition and to develop a 

recommended acquisition structure and processes with clear alignment of responsibility, authority 

and accountability”-- is difficult and complex. 

One hundred and twenty-eight prior studies have been done over many years to address perceived 

problems with the system and to prevent fraud, waste and abuse. In fact, we observed historical 

evidence that cost and schedule instability has been a problem in past system acquisitions, since 

the Revolutionary War. We see some of the same issues that the Packard Commission saw 20 

years ago as problems today. We asked the obvious question -- why?

We concluded that the problems were deeply embedded in many of the management systems 

we use in DoD, not just the traditional acquisition process. We need a radical approach to 

improvements that would make the process better and adapt these improvements to the new 

security environment of the 21st century. This assessment outlines our approach.

Detailed assessments are complicated by the absence of a standard, consistent and coherent cost 

tracking system to add clarity to analysis. Proposing change to improve performance is not 

without risk. The existing Acquisition System is the product of over 50 years of continuous 

focus on fielding systems with the best possible performance. Despite its flaws, this system 

has produced the finest military equipment that the world has known. It has delivered the 

foundation for today’s military and, in the process it has become an important element of US 

strategic advantage. Therefore, when proposing improvements or modifications to the existing 

Acquisition System, the potential for unintended consequences must be considered carefully. 

But failing to improve will have other unintended consequences, and they are potentially more 

problematic.

We conducted a comprehensive review to form the basis of our assessment that integrated all 

the parts of the process. We reviewed over 1,500 documents to establish a baseline of previous 

acquisition reform recommendations, held open meetings and operated a public web site to 

obtain public input, heard from 107 experts, received over 170 hours of briefings, conducted a 

detailed survey and interviews of over 130 government and industry acquisition professionals, and 

subsequently developed 1,069 observations. 

From these observations, we identified 42 areas of interest to focus our work. In addition to 

creating an integrated assessment of defense acquisition performance, we developed eight specific 

performance integrated assessments, grouped into six broad areas: Organization, Workforce, 

Budget, Requirements, Acquisition and Industry. From these specific assessments, we identified 

necessary performance improvements and defined implementation criteria for each area of 

improvement.
Defense Acquisition Performance Assessment Summary 

Understanding the Complexity of the Acquisition System

The Acquisition System is believed to 

be a simple construct reflecting efficient 

integration of three interdependent 

processes, termed “Big A”. The processes 

are budget, requirements, and acquisition. 

Our observations showed the processes to 

be a highly complex mechanism that was 

fragmented in its operation. Further, the 

observations indicated that differences 

in the theory and practice of acquisition, 

divergent values among the acquisition 

community and changes in the security environment have driven the budget requirements, and 

acquisition processes further apart and inserted significant instability in the process.

In theory, new weapon systems are delivered as the result of the integrated actions of the three 

interdependent processes whose operations are held together by the efforts of the organization, 

workforce, and the industrial partnerships that manage them. However, in reality and practice, 

INTEGRATED LOOK AT KEY ISSUES

42 Issue Areas

PPBE

Process

Acquisition

Strategy

Program

Structure

Complex

Acquisition

System

Requirement

Process

Joint

Requirement

Development

Need for

Leadership

Process

Discipline

Oversight

Industry

Motivation &

Behavior

PM

Expertise

RAA

Allocation

Acquisition

Career Path

Number of Observations

BIG “A” 

ACQUISITION PROCESS

EFFECTIVE INTERACTION

ESSENTIAL FOR SUCCESS

LITTLE “a”

ACQUISITION PROCESS

(MOST PREVIOUS EFFORTS

FOCUSED HERE)

JOINT

CAPABILITIES 

INTEGRATION &

DEVELOPMENT

SYSTEM (JCIDS)

PLANNING, 

PROGRAMMING,

BUDGETING AND

EXECUTION

DoD 5000.2

ACQUISITION

PROCESS

THE ACQUISITION SYSTEM
 Defense Acquisition Performance Assessment Summary

these processes and practitioners often operate independent of each other. Actions in each of the 

processes cause unintended negative consequences that magnify the effects of perturbations in any 

one area.

Incompatible actions are often caused by differences in organizational values among process 

owners and participants. 

• Organizations providing oversight and coordination of “little a” acquisition activities 

value compliance, consistency of approach and control of program activities. 

• The workforce is incentivized by job satisfaction, the opportunity for continuous 

training and stability in the process. 

• The budget process values how much and when to buy and focuses on control and 

oversight to balance the instability that advocacy creates. 

ORGANIZATIONAL VALUES DIFFER

In Practice, Disconnected and Unstable (government induced)

WORKFORCE

ORGANIZATION

INDUSTRY

REQUIREMENTS

BUDGET

ACQUISITION

HOW MUCH AND WHEN TO BUY

CONTROL, OVERSIGHT AND BALANCE 

INSTABILITY THAT ADVOCACY CREATES

WHY AND WHAT TO BUY

• MISSION SUCCESS AT LOWEST COST IN 

LIFE

• SERVICE ADVOCACY

HOW TO BUY

• BALANCE OF COST, SCHEDULE AND 

PERFORMANCE

• TECHNOLOGY AVAILABLE vs. 

PERFORMANCE, COST AND TIME TO NEED

• STABILITY

• TRAINING

• JOB SATISFACTION

• EXPERIENCE

• SURVIVAL

• PREDICTABILITY

• STOCKHOLDER VALUE

• VENDOR BASE VITALITY

• COMPLIANCE

• CONSISTENCY

• CONTROL

• OVERSIGHT

There are fundamental disconnects in DoD management systems and Congressional oversight driven by 

competing values and objectives that create government-induced instability in our acquisition programs
Defense Acquisition Performance Assessment Summary 

• The requirements process values the “why” and “what to buy” issues, focusing on obtaining 

the ability to achieve mission success at lowest cost in lives. 

• The “little a” acquisition process values “how to buy”. It strives to balance cost, schedule and 

performance. 

For industry the critical issue is survival followed by predictability in the defense market 

segment and achieving stockholder confidence. 

While each of these sets of values is legitimate, pursuing them without consideration for their impact 

in other processes adds instability to the overall acquisition process.

These factors are exacerbated by changes in the international security environment. Although the 

operational environment faced by the US armed forces has changed significantly since the Cold 

War, the system that we use to design, develop and deliver the systems they need has not changed. 

Further, efforts to improve the performance of this system have focused almost entirely on only one 

of part of the process, namely “little a” acquisition.

Major Findings

Several major findings became obvious as we assessed defense acquisition performance and 

documented the integrated nature of the process. Technology exploitation is a key US strategic 

MAJOR FINDINGS

For incremental improvement (applied solely to the acquisition process)

 to achieve success, DoD processes must be stable – they are not

• Strategic technology exploitation - key US 

advantage

• The world has changed

 - Goldwater-Nichols era (post 1986)

 • 20+ primes, 

 • multiple new starts 

 • huge annual production runs (585 aircraft, 

2,031 vehicles, 24 ships, 32,714 missiles)

 - Today 

 • Six primes DoD can’t live without

 • Few new starts 

 • Low rates of production (188 aircraft, 190 

combat vehicles, 8 ships/subs, 5,702 missiles)

 • Plus a need to be agile 

• The acquisition system must deal with external 

instability, a changing security environment and 

challenging national issues

• DoD management model based on lack of trust 

- oversight is preferred to accountability

• Oversight is complex, it is program focused - 

not process focused

• Complex acquisition processes do not promote 

success – they increase cost and schedule

• DoD elects short term savings and flexibility at 

the expense of long term cost increases
 Defense Acquisition Performance Assessment Summary

advantage. The fundamental nature of defense acquisition and the defense industry has changed 

substantially and irreversibly over the past twenty years. The dynamics of the system have changed 

the acquisition reforms envisaged in the Goldwater-Nichols Act. In 1985, defense programs were 

conducted in a robust market environment where over 20 fully competent prime contractors 

competed for multiple new programs each year. The industrial base was supported by huge annual 

production runs of aircraft (585), combat vehicles (2,031), ships (24) and missiles (32,714). 

Most important, there were well-known, well-defined threats and stable strategic planning by the 

Department. Today, the Department relies on six prime contractors that compete for fewer and 

fewer programs each year. In 2005 reductions in plant capacity have failed to keep pace with 

reduction in demand for defense systems, (188 aircraft, 190 combat vehicles, 8 ships, and 5,072 

missiles). The world has changed!

The Acquisition System must deal with external instability, a changing security environment and 

challenging national security issues 

• No longer is there a single well-defined threat. Instead, the Department must be agile to 

an unprecedented degree to respond quickly to urgent operational needs from across the 

spectrum of potential conflicts. 

• Although the Department mandates the use of a single, serial acquisition process that 

requires extended planning horizons, the Department’s financial model is based on shortterm decision making in which long term cost increases are accepted to achieve short 

term budget “savings” or “budget year flexibility”. 

• The Department compounds the chaotic nature of its budgeting process with a program 

oversight philosophy based on lack of trust. Oversight is preferred to accountability.

• Oversight is complex, and it is program -- not process focused. Effective oversight has 

been diluted in a system where the quantity of reviews has replaced quality, and the 

tortuous review processes have obliterated clean lines of responsibility, authority, and 

accountability. The oversight process allows staffs to assume de facto program authority, 

stop progress and increase program scope. Because the process is focused on programs, 

not on improving and standardizing the process of acquisition, it inhibits rather than 

promotes steady improvement in achieving program success.

Complex acquisition processes do not promote program success. They increase costs, add to 

schedule and obfuscate accountability. 

• Over the past twenty years many acquisition reform recommendations have focused on 

making incremental improvements to a narrowly defined acquisition process. If these 

incremental improvements to the acquisition process are to achieve success in improving 

program cost and schedule performance, then all of the processes external to acquisition 

must operate in a stable and predictable manner. These external processes include, oversight, 
Defense Acquisition Performance Assessment Summary 

budget and requirements as well as organizations that contribute to these processes, to 

include the Department’s leadership, industry, the workforce, and the Congress. They are 

not stable and predictable today. 

• The Department of Defense needs a new Acquisition System that is able to deal with an 

unstable external environment, diverse and rapidly changing security environments, and 

challenging national issues that are emerging with the expansion of the global marketplace.

Integrated Assessment

We concluded that an effective Acquisition 

System requires stability and continuity that 

can only be developed through integration of 

the major elements upon which it depends: 

• Organization - that structures 

the processes,

• Workforce - that provides the 

human capital to make the whole 

system operate,

• Budget - that allocates and 

prioritizes resources among 

competing needs,

• Requirements – that define the 

needs that the Acquisition System 

must satisfy,

• Acquisition - the processes that 

manages the creation of new 

military capabilities, and,

• Industry - that actually develops 

and produces new capabilities for 

the force.

Ideally, all of these entities must work in harmony to provide a stable and predictable environment 

that will ensure an effective, efficient Acquisition System. In practice, there are fundamental 

disconnects in the Department of Defense management systems and Congressional oversight. 

Competing values and objectives create unrecognized government-induced instability in our 

acquisition process.

OUR INTEGRATED ASSESSMENT

The Government Induced Cycle of Instability

OUR INTEGRATED ASSESSMENT

Because our major processes are not well integrated:

we have an unrecognized, government-induced and 

long-standing cycle of instability

which causes unpredictable cost, schedule and performance

that ultimately result in development programs that span 

15-20 years with substantial unit cost increases

leading to loss of confidence in the DoD Acquisition Systems

Budget and

Program Instability

Unpredictable

Program Cost,

Schedule,

Performance

Leadership Loses 

Confidence in

Acquisition

System

More

Intervention

More Oversight

Applied

Budget, Schedule 

Requirements

Adjustments Made
 Defense Acquisition Performance Assessment Summary

In an unstable Acquisition System, process owners and practitioners take actions without considering 

the impact these actions will have on the rest of the system. Requirements developers often mandate 

systems that are technologically unrealistic or unable to be delivered within the “time-to-need” that 

is desired by Combatant Commander. Program teams often allow requirements to escalate without 

discipline, driving costs beyond baseline budget and schedule. Those who hold the budget purse 

strings in the Department of Defense look dispassionately on the system and often reduce annual 

program budgets to fit within the “top-line” of the President’s Budget by trading-off some programs 

to “fix” others.

This cycle of government induced instability creates a situation in which senior leaders in the 

Department of Defense and Congress are unable to anticipate or predict the outcome of programs 

measured by cost, schedule and performance. When Defense and Congressional leaders are surprised 

by unanticipated cost overruns and failure to meet expected schedule and system performance, they 

lose confidence in a system that is expected to provide those capabilities. Leaders and staffs at all 

levels react by becoming more involved, applying more oversight and often making budget, schedule 

or requirements adjustments that significantly lengthen development and production cycles and add 

cost.

Performance Improvements

We recommend reducing government-induced instability through an integrated transformation 

of the major elements of the larger Acquisition System that can reduce cost, enhance acquisition 

 PERFORMANCE IMPROVEMENTS PERFORMANCE IMPROVEMENTS

For incremental improvement (applied solely to the acquisition process)

 to achieve success, DoD processes must be stable – they are not

Organization

• Realign authority, accountability and 

responsibility at the appropriate level and

streamline the acquisition oversight process.

Workforce

• Rebuild and value the acquisition workforce and 

incentivize leadership.

Budget

• Transform the budgeting process and establish 

a distinct Acquisition Stabilization Account to 

add oversight throughout the process.

Requirement – Process 

• Replace JCIDS with COCOM-led requirements 

procedures in Services, and DoD agencies 

must compete to provide solutions.

Requirements – Management and Operational Test 

• Add an “operationally acceptable” test evaluation category. Give 

program managers explicit authority to defer requirements

Acquisition – Strategy

• Shift to time-certain development procedures. 

• Adopt a risk-based source selection process

Acquisition - Time Ceratin Development

• Developmental programs must change from a focus on 100 

percent performance in the first production lot to a focus on 

delivering useful military capability within 6 yeas of Milestone A. 

Industry

• Overcome the consequences of reduced demand by sharing long 

range plans and restructuring competitions for new programs 

with the goal of motivating industry investments in future 

technology and performance on current programs.
Defense Acquisition Performance Assessment Summary 

performance and accelerate by years the delivery of key capabilities. 

These key performance improvements involve the same six broad areas: Organization, the 

Workforce, Budget, Requirements, Acquisition and Industry. 

Organization

We recommend that the Department fully implement the intent of the Packard Commission by 

creating a streamlined acquisition organization with accountability assigned and enforced at each 

level.

• The Secretary of Defense should direct the Service Chiefs of Staff/Chief of Naval 

Operations to establish Four-Star Service Systems Commands that report to the Service 

Chiefs of Staff /Chief of Naval Operations and the Service Acquisition Executives. These 

Four-Star Service Systems Commands will be responsible for aligning the acquisition 

workforce to include requirements and acquisition budget personnel, by establishing 

appropriate certification requirements based on formal training education and practical 

experience. This organization provides advocacy for the acquisition workforce and will 

institute formal and informal mentoring of program managers. It will enhance program 

execution by overseeing day-to-day integration of the acquisition workforce from 

program initiation at Milestone 0 up to the end of series production. They will direct 

and manage the preparation of Service Materiel Solution proposals and advocate for the 

future technology requirements of the Services.

• The Secretary of Defense should elevate both the Service Acquisition Executives 

Service Under Secretaries to Executive Level 3. Service Acquisition Executives will be 

accountable for overseeing day-to-day execution and integration of programs through the 

Service Systems Commands, from the Milestone B decision through final production. 

This action will ensure that clear lines of responsibility, accountability, and authority 

for program execution are established and maintained during the system design, 

development and production phases of major acquisition programs.

• The Secretary of Defense should designate the Under Secretary of Defense for 

Acquisition, Technology and Logistics as a full member of the Joint Requirements 

Oversight Council and delegate authority to the Under Secretary of Defense for 

Acquisition, Technology and Logistics to budget and program for a newly created 

“Acquisition Stabilization Account.” These actions will re-enforce the Under Secretary of 

Defense for Acquisition, Technology and Logistic’s authority and add stability to major 

defense acquisition programs.

• The Secretary of Defense should assign responsibility for establishing and operating 

a Materiel Solution Development Process to the Under Secretary of Defense for 

Acquisition, Technology and Logistics to be responsive to the capability needs of the 
10 Defense Acquisition Performance Assessment Summary

Combatant Commands as identified in a new time-phased and fiscally informed Joint 

Capabilities Acquisition and Divestment Plan. After a Service is selected to deliver a 

material Solution (Milestone 0) decision authority for (Milestone B) and beyond is 

nested in the Service Acquisition Executive.

• The Under Secretary of Defense for Acquisition, Technology and Logistics should 

disestablish the Acquisition Integrated Product Teams and replace the current oversight 

process with a small staff focused on decision-making to support joint programs. This 

will ensure that the accountability of Service Acquisition Executives, Program Executive 

Officers and Program Managers is not diffused.

Workforce

We recommend that the Department realign responsibility authority, and accountability at the 

lowest practical levels by reintegrating the Services into the acquisition management structure.

• The Secretary of Defense should seek legislation establishing the Service Acquisition 

Executives as Five-Year Fixed Presidential Appointments renewable for a second five-year 

term. This will add leadership continuity and stability to the acquisition process.

• The Secretary of Defense should request that the White House Liaison Office create a 

pool of White House pre-cleared, non-career senior executives and political appointees to 

fill executive positions to provide leadership stability in the acquisition process.

• The Secretary of Defense should seek legislation to retain high performance military 

personnel in the acquisition workforce to include allowing military personnel to remain 

in uniform past the limitations imposed by the Defense Officer Personnel Management 

Act and augment their pay to offset the “declining marginal return” associated with 

retired pay entitlement.

• The Secretary of Defense should direct that the number of federal employees, focused 

on critical skill areas, such as program management, system engineering and contracting, 

should be increased immediately. The cost of this increase should be offset by reductions 

in funding for contractor support.

• The Under Secretary of Defense for Acquisition Technology and Logistics, working 

with the Service Secretaries should establish a consistent definition of the acquisition 

workforce to include all acquisition-related budget and requirements personnel.

• The Under Secretary of Defense for Acquisition Technology and Logistics should 

establish and direct standard and consistent training, education, certification and 

qualification standards for the entire acquisition workforce including requirements and 

budget acquisition personnel. 
Defense Acquisition Performance Assessment Summary 11

Budget

We recommend that the Department transform the Planning, Programming, Budgeting and 

Execution process and stabilize funding for major weapon system development programs.

• The Secretary of Defense should establish a separate “Acquisition Stabilization Account” 

to mitigate the tendency to stretch programs due to shortfalls in the Department of 

Defense non-acquisition accounts that ultimately increases the total cost of programs. 

This will substantially reduce the incidence of “breaking” programs to solve budget year 

shortfalls and significantly enhance program funding stability.

• The Secretary of Defense should create a Management Reserve in this account by 

holding termination liability at the Service level. Availability of a Management Reserve 

will substantially reduce the impact of unexpected technical upsets during program 

execution and thus stabilize the contract management and execution process.

• The Secretary of Defense should direct the Under Secretary of Defense for Acquisition, 

Technology and Logistics to adjust program estimates to reflect “high confidence” -- 

defined as a program with an 80 percent chance of completing development at or below 

estimated cost -- when programs are base lined in this account.

Requirements

We recommend that transforming the requirements process to adapt to the new security 

environment by including the Combatant Commanders as the driving force for requirements and 

by changing the operational test process. 

• The Secretary of Defense should task each of the Combatant Command Commanders to 

prepare extended planning annexes to each of their operational and contingency plans, to 

be updated on a two-year cycle that will provide a fifteen-year forecast of both capability 

gaps and excesses, relative to mission requirements.

• The Chairman of the Joint Chiefs of Staff should replace the Joint Capabilities 

Integration and Development System by designating the Joint Chiefs of Staff/J-8 to 

lead the integration of the Combatant Commands’ extended planning annexes into 

a Department wide, time-phased, fiscally-informed and prioritized Joint Capabilities 

Acquisition and Divestment plan, to be reviewed and updated on a two-year cycle. This 

plan will define the capabilities for the new Materiel Solutions Development Process 

satisfy the Services and DoD Agencies will compete to provide solutions to capability 

gaps identified in the Joint Capabilities Acquisition and Divestment plan. This will 

provide a Time Certain Development process to identify, prioritize and act on the 

warfighters’ evolving needs. It will also allow better rationalization and balancing of 
12 Defense Acquisition Performance Assessment Summary

requirements. This will add stability to the program initiation process. We have outlined 

a description of this system and an implementation plan to support “new starts” in Fiscal 

Year 2008 programs.

• The Secretary of Defense should submit legislation and direct development of 

implementation Instructions to establish fiscal and time-constraints for Initial 

Operational Test and Evaluation. Systems would be evaluated as “Operationally 

Acceptable” when the system performance is not fully adequate when tested against 

criteria established by the Director, Operational Test and Evaluation, but when 

the Combatant Commander has determined that the system as tested provides an 

“Operationally Useful” capability and the Combatant Commander desires immediate 

fielding of the capability as tested. This will ensure that operational testing focuses on 

testing in the most likely environments. It will reduce funding instability at the critical 

transition when programs go to the production phase.

• The Secretary of Defense should seek legislation and direct development of 

implementation Instructions to create an “Operationally Acceptable” evaluation 

testing category. This will limit the additional requirements during testing for system 

performance beyond the levels established at program initiation and therefore add 

stability to development and provide for the transition to production.

• The Under Secretary of Defense for Acquisition, Technology and Logistics should 

delegate to Service Acquisition Executives, (and through them and the Program 

Executive Officers to Program Managers,) explicit authority to reschedule achievement of 

non Key-Performance-Parameter requirements to future production blocks or program 

spirals. This will assist maintaining Time Certain Development delivery requirements 

and will limit the time that systems are in development, thereby reducing program cost 

risk and enhancing the ability to meet Combatant Commander capability needs in a 

timely manner.

• The Under Secretary of Defense for Acquisition, Technology and Logistics should direct 

the Deputy Director for Research and Engineering to coordinate Service Science and 

Technology transition plans and actively participate in the Joint Capabilities Acquisition 

and Divestment process to reemphasize “technology push” initiatives. This will mitigate 

the risk that pursuing a knowledge base approach to system development, and adopting a 

time certain development acquisition process, could constrain the introduction of “game 

changing” technologies.

Acquisition

We recommend that the Department change its preferred acquisition strategy for developmental 

programs that focus on delivering 100 percent performance. The new standard should focus on 

delivering useful military capability within a constrained period of time -- normally within six 
Defense Acquisition Performance Assessment Summary 13

years from Milestone A. Thus, time becomes a Key Performance Parameter. 

• The Under Secretary of Defense for Acquisition, Technology and Logistics should direct 

changes to the DoD 5000 series to establish Time Certain Development as the preferred 

acquisition strategy for major weapon system development. These strategies will require 

delivery of the first unit to operational forces within approximately six years of the 

Milestone A decision. Through early fielding of a basic capability, operational users will 

gain a clearer understanding of requirements that should be incorporated during future 

block or spiral upgrades, and technologies will mature that will enable producers to 

satisfy those requirements. 

• Time Certain Development differs from “evolutionary acquisition” in that a 

specific time frame is established in which useful military capability will be fielded. 

Technology readiness levels for the entire capability will support the fielding of the 

capability in the specific time frame. 

• The time frame will not be adjusted to accommodate new requirements or capability 

enhancements prior to fielding the useful military capability. “Evolutionary 

acquisition” and “spiral development” allow for inclusion of enhancements and 

increased requirements prior to the originally established Initial Operational 

Capability. 

• Time Certain Development and program management will substantially reduce time 

in development for systems, reducing pressure on investment accounts and increasing 

funding stability for all development programs.

• The Under Secretary of Defense for Acquisition, Technology and Logistics should submit 

proposed changes to the Defense Supplement to the Federal Acquisition Regulations 

to formalize a risk-based source selection process in which cost proposals are replaced 

by industry and government agreements on most probable cost. An affordability 

determination is then made to determine when proposals are within the competitive 

range. Subsequent to the affordability determination, evaluation factors should be 

heavily weighted in the areas of technical risk and prime contract and subcontractor 

management. This will reduce contract performance and cost risk, incentivize industry 

investment in research and development and capital equipment and add stability to 

program execution.

• The Under Secretary of Defense for Acquisition, Technology and Logistics should direct 

conformance with the provision in the Defense Acquisition Guidebook to require that 

the Test and Evaluation Plan be approved as part of the Milestone B decision and realign 

the Milestone B decision to occur at Preliminary Design Review. At this stage sufficient 

information is available and technology maturity and system design are sufficiently 

mature to set high confidence cost, schedule, and performance thresholds that will meet a 
14 Defense Acquisition Performance Assessment Summary

Time Certain Development acquisition timeline. This will substantially reduce program 

cost, schedule and technical performance risk and substantially increase program stability.

• The Under Secretary of Defense for Acquisition, Technology and Logistics should 

direct changes to the DoD 5000 series to require the Test and Evaluation Master Plan 

and the Initial Operational Test and Evaluation Plan to be completed and signed prior 

to Milestone B. This will reduce the opportunity for operational testing to generate 

requirements late in the development phase, thereby increasing program stability.

• The Under Secretary of Defense for Acquisition should direct the Service Acquisition 

Executives to appoint program managers to be held accountable for each baseline with 

tenure from Milestone B through delivery of the Beyond Low Rate Initial Production 

Report. This will increase stability of acquisition leadership.

• The Under Secretary of Defense for Acquisition, Technology and Logistics should direct 

changes to the DoD 5000 series to move Milestone B to after Preliminary Design Review 

is completed. This will stabilize program cost, schedule, and performance expectations.

Industry

We recommend that the Department share long range plans with industry and restructure 

competitions for new programs with the goal of motivating industry investments in future 

technology and performance on current programs.

• The Deputy Secretary of Defense should establish and host regular roundtable events 

for discussions with executives from Industry. Chief Executive officers of the six defense 

industry prime contractors and first tier sub-contractors should be invited to participate 

in these roundtables to share Joint Capabilities Acquisition and Divestment plans and 

align industry and defense strategic planning. This will encourage industrial investment 

in areas of importance to the Department and ensure that a robust industrial base 

responds to the Department’s needs.

• The Under Secretary of Defense for Acquisition, Technology and Logistics should 

direct changes to the DoD 5000 series to require government insight and favor formal 

competition over “make/buy” decisions for major subsystems where a Lead System 

Integrators acquisition strategy is involved. Lead System Integrator acquisition strategies 

reduce subcontractor opportunities to compete and impact the viability of the vendor 

base, thereby increasing the risk that the Department cannot achieve its required 

capabilities. For all acquisition category one programs, how Lead System Integrator, 

prime contractors or original equipment manufacturers select or compete the selections 

of subcontractors should be a critical element of the source selection competition. 
Defense Acquisition Performance Assessment Summary 15

Additionally, management of subcontractors should be a significant evaluation factor in 

Contractor Performance Assessment Reports.

Aside from this specific recommendation, we propose that the DoD and the Congress take on 

an evaluation of the impact of industrial consolidation and its unintended effects. Such a review 

should be conducted with a view toward our current security environment and the nature of our 

fundamental assumptions about the industry upon which our policy, laws and regulations are based.

Our Perspective and Commitment

To achieve success for incremental improvements that are applied solely to the acquisition process, 

DoD acquisition processes must be stable – they are not. We concluded that the problems we face 

are deeply imbedded in many DoD management systems. We therefore need a radical approach to 

improvements to stabilize the processes and adapt them to the new security environment.

One thing is clear -- the larger acquisition process was designed and optimized to respond to a 

security environment dominated by a single strategic threat, the former Soviet Union. The security 

environment is very different today -- therefore, acquisition processes need to meet the demands of 

this new environment. We must have the flexibility and agility to respond to more dynamic security 

challenge and rapidly changing needs.

The hours we spent were rich in providing an opportunity to view the entire spectrum of issues 

--past and present, and to look through a prism to the future. Implementation is about the future. 

Implementation is about putting everything in focus. 

The performance improvements we propose will significantly enhance the Department’s ability to 

deliver capabilities to the warfighter by stabilizing and integrating key elements of acquisition. Taken 

together our recommended performance improvements represent a significant transformation of the 

Acquisition System and are designed to address the sources of instability and lack of accountability. 

We believe we have offered an integrated set of performance improvement, to reduce government 

instability and complexity. Implementation will require leaders to make hard choices, but the 

potential payoff is the Acquisition System that reformers sought for decades - on Acquisition System 

that delivers to its commitments.

It is one thing to create and establish vision and to recommend focusing on change – it is quite 

another to understand the unity of purpose required to achieve success and to ensure that the 

stakeholders understand not only what is written and said but what we “meant to write and say” 

about these ideas and issues. We tried to be as clear and unambiguous as time and talent allowed, 

but this subject is extremely complex. We understand that there will be a need to clarify, interpret, 

dialogue and explain our effort. 

Because these are hard choices with potential unintended consequences, implementation should be 

approached rigorously. Coincident with meeting the implementation criteria, we recommend that 
16 Defense Acquisition Performance Assessment Summary

the Department do “strategic gaming” on the changes to get better insight and confidence is the 

intended outcome. We recommend that the Department do “strategic gaming” on the changes to 

get better insight and confidence is the intended outcome. Our legacy of “war gaming” has served us 

well in operations. We should use this war gaming approach to manage change in out Acquisition 

System.

The timing for change has never been better. The abiding interest of Congress in ensuring that the 

funding it provides is turned into usable and effective military capability, the Secretary of Defense’s 

dedication to transforming the way the Department of Defense does its acquisition business, and the 

Quadrennial Defense Review challenge to improve the acquisition process all combine to create a 

very fertile ground for change. The Defense Acquisition Performance Assessment Panel is committed 

to the validity of its assessment and the value of its recommendations for improvement.