ProgramManagers

ToolKit

SixteenthEdition(Ver.1.0)

January2011

Author:WilliamParker

DEFENSEACQUISITIONUNIVERSITY
DAU PROGRAM MANAGERS TOOL KIT

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DAU PROGRAM MANAGERS

TOOL KIT

Sixteenth Edition (Ver. 1.0)

January 2011
DAU PROGRAM MANAGERS TOOL KIT

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For sale by the

U.S. Superintendent of Documents, Government Printing Office

Internet: http://bookstore.gpo.gov/ Phone: 202-512-1800 Fax: 202-512-2250

 Mail Stop: SSOP, Washington, DC 20402-0001

ISBN 978-0-16-087469-7, Stock Number 008-020-01604-7 
DAU PROGRAM MANAGERS TOOL KIT

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PREFACE

This Sixteenth Edition (version 1.0) of the DAU Program Managers Tool 

Kit contains a graphic summary of acquisition policies and managerial skills frequently required by DoD program managers. It is a current 

version of a “Tool Box” that was first developed by Charles F. Schied 

of the Defense Acquisition University (DAU) Program Management 

Course (PMC) 92-1. The information in the Tool Kit is extracted from 

DAU course material and is based on DoDD 5000.01 (May 12, 2003), 

DoDI 5000.02 (December 8, 2008), the Defense Acquisition Guidebook (DAG), (August 5, 2010), CJCSI 6212.01E (December 15, 2008), 

CJCSI 3170.01G (March 1, 2009), the Joint Capabilities Integration 

and Development System Manual (July 31, 2009), and the Weapon 

Systems Acquisition Reform Act of 2009. Material from the DAU Acker 

Library and Knowledge Repository was also used.

Since the DAU Program Managers Tool Kit is a compilation of classroom presentation and teaching materials used in a number of different 

courses at DAU, the charts and tables vary in look and feel. 

Users of the Tool Kit are reminded that this summary is a guide only 

and should not be used as a substitute for official policy guidance. Periodic review of official policy guidance is recommended. 

An e-Toolkit has been developed which contains current updated acquisition guidance and direction (https://pmtoolkit.dau.mil). This (“hardcopy”) Tool Kit is current as of January 1, 2011 and is extracted from 

the e-Tool Kit. The hard copy Tool Kit can be found at http://www.dau.

mil/pubscats/pages/tool%20kit.aspx.
DAU PROGRAM MANAGERS TOOL KIT

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DAU PROGRAM MANAGERS TOOL KIT

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ACKNOWLEDGMENTS

As sponsor of the Tool Kit, the Learning Capabilities Integration Center 

(LCIC) recognizes the following members of the DAU staff and faculty 

for their input to this Sixteenth Edition (Version 1.0): 

•	 Bill Bahnmaier, formerly of DAU’s Program Management and

Leadership Department, Capital and Northeast Region, for 

coordinating the input and editing the material received.

•	 Chuck Cochrane, formerly the DAU Program Management Center

Director and currently a DoD contractor supporting DAU, for his 

significant contributions regarding current DoD acquisition policy.

•	 Mike Dorohovich, CSC Corporation contractor supporting DAU, for

his contribution regarding the DAU knowledge sharing systems.

•	 Andrea Reese, CSC Corporation contractor supporting DAU, for her

efforts in developing and updating the e-Tool Kit.

•	 The Defense Systems Management College – School of Program

Managers (DSMC-SPM) for input, including Duane Tripp, international 

acquisition policy and guidance; Al Moseley, Diamond Card and 

Probability of Program Success Model; and Roberta Tomasini and 

John Krieger, budgeting and finance issues.

•	 The Learning Capabilities Integration Center and its Center Directors

and Performance Learning Directors, including Sharon Jackson, 

Robert Pratt, Leslie Deneault, Bill Kobren, John Claxton, John 

Snoderly, George Prosnik, Bill Motley, and Larry Baker. 

•	 Marty Sherman, DAU West Region, for his contribution regarding the

Continuous Process Improvement/Lean Six Sigma processes.

•	 The Visual Arts and Press Department, including Miracle Riese for

layout/graphics, Debbie Gonzalez for editing, and Frances Battle for 

serving as liaison with the printers. 

Other significant contributors from the DAU faculty were John Kelley of 

the Program Management Department; Robert Carlson, Kim Hunter, 

Bob Gustavus, Gerry Land, and Miriam Cohe of the Business, Cost 

Estimating, and Financial Management Department; Tom Simcik of the 

Logistics Management Department; and Randy Zittel of the Engineering and Technology Department. Dr. Paul Alfieri, professor for T&E also 

provided valuable information on test and evaluation processes.

Tim Shannon

Director, Learning Capabilities

Integration Center 

William Parker

Director, Center for 

Acquisition Management
DAU PROGRAM MANAGERS TOOL KIT

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TABLE OF CONTENTS

Preface ...................................................................................................................................iii

Acknowledgments .................................................................................................................. v

CHAPTER 1—ACQUISITION PROCESS AND RESOURCES ............. 1

The Program Manager’s Bill of Rights and Responsibilities........................................... 2

Defense Acquisition Management System ..................................................................... 3

Acquisition Categories (ACAT)........................................................................................ 4

Acquisition Strategy Considerations................................................................................ 5

Acquisition, Technology and Logistics (AT&L) Knowledge

Management System .........................................................................................6–8

Defense Acquisition Portal (DAP) ...............................................................................6

Ask A Professor (AAP) ........................................................................................... 6

Acquisition Community Connection (ACC) ........................................................... 6

Defense Acquisition Guidebook (DAG) ................................................................. 7

ACQuipedia ............................................................................................................ 7

Integrated Defense AT&L Life Cycle Management System Chart ....................7–8

AT&L ACQuire ........................................................................................................ 8

Best Practices Clearinghouse (BPCh)................................................................... 8

Performance Learning Tools .................................................................................. 8

Defense Acquisition Board Timeline Milestones B, C, and FRPDR............................... 9

Milestone Decision Information—A Possible Construct.................................................. 9

Requirements for Milestone/Decision Reviews........................................................10–11

Interoperability Certification........................................................................................... 12

S&T Linkage to Defense Acquisition Process............................................................... 13

Joint Capabilities Technology Demonstration (JCTD)................................................... 14

Acquisition Program vs. ATD and JCTD ....................................................................... 15

Program Structure ......................................................................................................... 16

INTERNATIONAL ACQUISITION ............................................ 17–18

DoD International Armaments Cooperation Policy ....................................................... 17

The Scope of Defense Cooperation.............................................................................. 17

Defense Sales vs. Cooperative Acquisition................................................................... 18

International Activities Associated with Defense Acquisition Phases........................................18

FUNDS MANAGEMENT .......................................................... 19–33

Resource Allocation Process—Overlap ........................................................................ 19

PPBE—Planning Phase ................................................................................................ 20

PPBE—Program/Budget Review.................................................................................. 20

Resource Allocation Process......................................................................................... 21

Congressional Enactment Timetable ............................................................................ 22

Procurement Appropriations (Account Numbers and Budget Activities) ................ 23–24

Research, Dev., Test, and Eval. (RDT&E) Appropriations (Account Numbers)................. 25

RDT&E Appropriations (Relationship Between MFP 6 R&D

Categories and RDT&E Appropriations Budget Activities) ................................... 25
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CHAPTER 1—ACQUISITION MANAGEMENT (CONTINUED)

Sample Navy Appropriations and Budget Activities ...................................................... 26

Appropriation Life........................................................................................................... 27

Below Threshold Reprogramming Actions.................................................................... 27

Life Cycle Cost Composition ......................................................................................... 28

Product Improvements .................................................................................................. 28

Cost Estimating.............................................................................................................. 29

Cost Estimating Relationships (CER)—Parametric ...................................................... 29

Cost Estimating Requirements...................................................................................... 30

Program Cost and Schedule Breach Parameters......................................................... 31

Earned Value Management “Gold Card”................................................................. 32–33

CONTRACTING ....................................................................... 34–38

Contracting—Components of Contract Price................................................................ 34

Types of Contracts......................................................................................................... 34

Contract Type Features ........................................................................................... 35–36

Pre-Solicitation Process ................................................................................................ 37

Post-Solicitation Process............................................................................................... 37

Other Ways to Buy......................................................................................................... 38

DEFENSE INDUSTRY BUSINESS MANAGEMENT ............... 39–45

Contractor Profitability Ratios........................................................................................ 39

Aerospace/Defense Industry Contractor Profitability Ratios......................................... 40

Lockheed Martin Corp.—Dupont Formula Analysis (An Example)................................... 41

Cash Cycle..................................................................................................................... 42

Contractor Financing and Payments............................................................................. 42

Direct and Indirect Costs ............................................................................................... 43

Assigning Indirect Costs................................................................................................ 43

Life Cycle of Indirect Cost Rates ................................................................................... 44

Contractor’s Cost Proposal ........................................................................................... 44

Contractor Business Planning Process Outputs........................................................... 45

LOGISTICS .............................................................................. 46–54

Life Cycle Logistics........................................................................................................ 46

Principal Life Cycle Logistics Goals/Objectives ............................................................ 46

Goal 1: Life Cycle Sustainment Metrics ..........................................................46–47

Goal 2: Affordable System Operational Effectiveness (SOE) ................................ 48

Goal 3: DoD Product Support Strategy Process Model ..................................48–49

Goal 4: Integrated Product Support Elements ................................................ 49–50

Goal 5: Product Support Business Model (PSBM) ............................................... 51

The Sustainment Chart.................................................................................................. 52

Logistics Management Community of Practice (LOG CoP) ......................................... 52

Life Cycle Logistics Linkage to Defense Acquisition Process....................................... 53

Defense Acquisition Guidebook—Life Cycle Logistics...................................... 54

Life Cycle Logistics References and Guidance ........................................................... 54
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CHAPTER 1—ACQUISITION MANAGEMENT (CONTINUED)

ORGANIZATION ...................................................................... 55–56

Program Office Organization Structures (Examples) ............................................. 55–56

“Traditional” or Functional Structure ....................................................................... 55

“Pure” Product Structure ......................................................................................... 55

Matrix Structure........................................................................................................ 56

Integrated Product Teams........................................................................................ 56

MANUFACTURING .................................................................. 57–61

The Role of Manufacturing in the Acquisition Process ................................................. 57

Common Production Risks That Greatly Impact Cost, 

Schedule, and Performance.................................................................................... 57

Producibility..............................................................................................................58–61

Producibility (Defense Acquisition Guidebook) ............................................................ 58

Quality Management Systems (Defense Acquisition Guidebook) ........................... 59

Key Characteristics and Variation Reduction......................................................59–60

Production Readiness Review (PRR)....................................................................... 61

Additional Manufacturing Information Sources ......................................................... 61

TEST AND EVALUATION ........................................................ 62–67

Test and Evaluation (T&E)—Types and Tasks .............................................................. 62

Test and Evaluation Nomograph .............................................................................63–64

Modeling and Simulation (M&S) Planning .................................................................... 65

Hierarchy of Models and Simulations............................................................................ 66

The Evolution of Modeling and Simulation.................................................................... 67

PLANNING AND CONTROL TOOLS ....................................... 68–75

Gantt Chart (Example)................................................................................................... 68

Milestone Chart (Example)............................................................................................ 68

Network Schedules.................................................................................................. 69

Network Schedules—General ................................................................................. 69

Arrow Diagramming Method (ADM)........................................................................ 69

Precedence Diagramming Method (PDM).............................................................. 69

Network Schedules (Example)...................................................................................... 70

Examples of Network Scheduling Software.................................................................. 71

Schedule Development ................................................................................................. 72

Lead Time Chart ............................................................................................................ 73

Line of Balance Technique ............................................................................................ 74

Acquisition Program Baseline ....................................................................................... 75

RISK MANAGEMENT .............................................................. 76–79

Program Manager’s Checklist for Review of Tradeoff 

Planning and Studies.............................................................................................................76

Technical Performance Measurement .......................................................................................76

DoD Risk Management Process Model ........................................................................ 77

Root Cause Analysis...................................................................................................... 77

Risk Management Process—Details............................................................................. 78

Program Success Metrics Model * Summary ............................................................... 79
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CHAPTER 1—ACQUISITION MANAGEMENT (CONTINUED)

SYSTEMS ENGINEERING ....................................................... 80–98

What is Systems Engineering? ..................................................................................... 80

Systems Engineering Processes .................................................................................. 80

Systems Engineering Policy in DoD.............................................................................. 80

Systems Engineering Process—Technical Management Processes..................................81

Defense Acquisition Management System—Technical “V” Activities............................ 82

Materiel Solution Analysis Phase Systems Engineering SE Activities.......................... 83

Technology Development Phase SE Activities.............................................................. 83

Engineering and Manufacturing Development Phase (SE) Activities .............................. 84

Production and Deployment Phase—SE Activities............................................................ 85

Operations and Support Phase—SE Activities ............................................................. 85

Requirements (User Needs) Analysis Questions.......................................................... 86

Attributes of a Well-Defined Requirement..................................................................... 86

Systems Engineering Design Process Illustrated......................................................... 87

Specification Development and Technical Reviews...................................................... 88

Technical Management Processes Key Questions....................................................... 89

Technical Review Definitions................................................................................... 90–91

Technical Review Best Practices................................................................................... 92

Program-Unique Specifications..................................................................................... 93

Performance vs. Detail Specifications........................................................................... 94

Configuration Management........................................................................................... 95

Interface Management................................................................................................... 96

Interface Control Concept.............................................................................................. 96

Work Breakdown Structure (WBS)................................................................................ 97

How to Create a Work Breakdown Structure................................................................ 98

Basic Purposes of WBS ................................................................................................ 98

SOFTWARE ............................................................................ 99–102

Software Development—Technical Review Relationships ........................................... 99

Software Development—Key Life Cycle Review Factors........................................... 100

Candidate Software Measures (Metrics)..................................................................... 101

Quality Events for Software......................................................................................... 101

Software Management Best Practices........................................................................ 102

Software Acquisition Worst Practices.......................................................................... 102

CHAPTER 2—LEADERSHIP AND MANAGERIAL SKILLS.............. 103

Management and Leadership...................................................................................... 103

Program Management “Diamond Card”..............................................................104–105

Management.......................................................................................................... 104

Leadership ............................................................................................................. 104

Technology Readiness Levels ............................................................................... 105

Empowerment, Delegation, and Coaching .........................................................106–107

Coaching Skills ........................................................................................................... 107

Generic Integrated Product Team (IPT) Process ....................................................... 108

Formula for Effective Team Performance.................................................................... 109

Team Charter............................................................................................................... 110
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CHAPTER 2—LEADERSHIP AND MANAGERIAL SKILLS (CONTINUED) 

Working Groups....................................................................................................111–112

Team Development Wheel .....................................................................................111

Typical Working Groups......................................................................................... 112

Management Tradeoffs for Working Groups ......................................................... 112

Team Performance Model ........................................................................................... 112

Team Decision Making ................................................................................................ 113

Effective Meetings ....................................................................................................... 114

Decision Briefing.......................................................................................................... 115

Communications...................................................................................................116–118

Counseling ............................................................................................................. 118

Time Management....................................................................................................... 119

Management Tools and Techniques....................................................................120–121

Continuous Process Improvement/Lean Six Sigma (CPI/LSS).................................. 122

CHAPTER 3—PROBLEM-SOLVING TOOLS .................................... 123

Brainstorming.......................................................................................................123–124

Cause-and-Effect Diagram ......................................................................................... 125

Force Field Analysis .................................................................................................... 126

Histogram .................................................................................................................... 127

Scatter Diagram .......................................................................................................... 128

Surveys........................................................................................................................ 129

Affinity Diagram ........................................................................................................... 130

Pairwise Ranking.................................................................................................131–132

Pareto Chart................................................................................................................. 133

Benchmarking.............................................................................................................. 134

Flowcharting ........................................................................................................135–136

Deployment Flowcharts............................................................................................... 137

Nominal Group Technique (NGT)........................................................................138–139

Creative Problem Solving............................................................................................ 140

Responsibility Assignment Matrix (RAM).................................................................... 141

Knot Chart.................................................................................................................... 142

Qualitative Problem Solving ........................................................................................ 143

Gantt Chart .................................................................................................................. 144
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CHAPTER 1 

ACQUISITION PROCESSES AND RESOURCES

•	 Things that make you go “Hmmm?...”

4 The only thing most auditors fix is the blame. 

4 Experience is something you got just after you needed it.

4 People are smarter than they look; listen to them.

4 The last 10 percent of the performance sought generates onethird of the cost and two-thirds of the problems.

4 Never open a can of worms unless you want to go fishing.

4 Those who believe it cannot be done, will you please get out of 

the way of those who are busy doing it?

•	 Things we should always remember.

4 Be honest in everything you say, write, and do.

4 Be good to your people, and they will be good to you.

4 Forgiveness is easier to obtain than permission.

4 Keep everyone informed; when in doubt, coordinate.

4 Be the first to deliver bad news.

4 Bad news does not get any better with time.

4 If you are sitting at your desk, you are not managing your 

program.
DAU PROGRAM MANAGERS TOOL KIT

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THE PROGRAM MANAGER’S BILL OF RIGHTS

AND RESPONSIBILITIES

Rights:

Program Managers have the RIGHT to: 

•	 a single, clear line of authority from the Defense Acquisition

Executive;

•	 authority commensurate with their responsibilities;

•	 timely senior leadership decisions;

•	 be candid and forthcoming without fear of personal consequences;

•	 speak for their program and have their judgments respected;

•	 receive the best available training and experience for the job; and

•	 be given adequate financial and personnel resources.

Responsibilities:

Program Managers have the RESPONSIBILITY to: 

•	 accept program direction from acquisition executives and implement

it expeditiously and conscientiously;

•	 manage their programs to the best of their abilities within approved

resources;

•	 be customer-focused and provide the user with the best, most costeffective systems or capabilities;

•	 innovate, strive for optimal solutions, seek better ways to manage,

and provide lessons-learned to those who follow;

•	 be candid about program status, including risks and problems as

well as potential solutions and likely outcomes;

•	 prepare thorough estimates of financial and personnel resources

that will be required to manage the program; and

•	 identify weaknesses in the acquisition process and propose

solutions.
DAU PROGRAM MANAGERS TOOL KIT

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DEFENSE ACQUISITION MANAGEMENT SYSTEM

(DoDI 5000.02)

A

B

C

Pre-Systems Acquisition

User Needs

Production 

&

Deployment

Operations & 

Support

Engineering and

Manufacturing Development

FRP

Decision

Review

Systems Acquisition Sustainment

• The Milestone Decision Authority will determine the 

 initial phase of entry at the Materiel Development Decision.

• Entrance criteria must be met before entering phase.

• Evolutionary acquisition or single-step strategy is used

to obtain full capability.

Materiel Solution

Analysis

Material

Development

Decision

Program Initiation

Technology

 Development

Te

chnology Opportunities & Resource

s

Post-PDR

Assessment

Post-CDR

Assessment

LRIP & IOT&E SCMPD ISD

Life Cycle

Sustainment Disposal

Decision Point Milestone Decision Point if PDR is not conducted before Milestone B.

IOC FOC

LEGEND:

CDR—Critical Design Review

FOC—Full Operational Capability

FRP—Full-Rate Production

IOC—Initial Operational Capability

IOT&E—Initial Operational Test & EvaluationISD—Integrated System DesignLRIP—Low-Rate Initial ProductionPDR—Preliminary Design Review 

SCMPD—System Capability & Manufacturing  Process Demonstration
DAU PROGRAM MANAGERS TOOL KIT

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ACQUISITION CATEGORIES (ACAT)

l DAB Review 

l Designated by USD(AT&L) 

l Decision by USD(AT&L)

l Component Review 

l Designated by USD(AT&L) 

l Decision by Component Head/CAE

l ITAB Review

l Designated by USD(AT&L)*

l Decision by USD(AT&L)*

 

l Component Review 

l Designated by USD(AT&L)* 

l Decision by Component Head/CAE

l Does Not Meet ACAT I Criteria 

l Designated by Svc Sec/CAE 

l Decision by Svc Sec/CAE 

 

l Does Not Meet ACAT I, IA, or II 

Criteria 

l Designated IAW Component 

Policy

l Decision IAW Component Policy

l Not otherwise designated ACAT I, 

IA, II, or III 

l Designated IAW Navy Policy 

l Navy/USMC ACAT IVT/IVM 

l Decision at lowest appropriate level 

ACAT ID:

ACAT IC:

ACAT IAM:

ACAT IAC:

ACAT II:

ACAT III:

ACAT IV:

Major

Defense

Acquisition 

Programs

Major AIS

Acquisition 

Programs

Major

Systems

All Others

(except 

Navy and 

USMC)

Navy

USMC

SECNAVINST 5000.2_ 

No Fiscal Criteria

$140M RDT&E or 

$660M Procurement 

(FY 00 Constant $)

$378M Life Cycle Cost or 

$126M Total Program Cost 

or $32M Program Cost in 

any single year 

(FY 00 Constant $) 

$365M RDT&E or $2.190B 

Procurement 

(FY 00 Constant $)

* May be delegated

LEGEND:

ACAT— Acquisition Category

AIS— Automated Information System

CAE— Component Acquisition Executive

DAB— Defense Acquisition Board

ITAB— Information Technology Acquisition Board

RDT&E— Research, Development, Test, and Evaluation

USD(AT&L)— Under Secretary of Defense 

(Acquisition, Technology and Logistics)
DAU PROGRAM MANAGERS TOOL KIT

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ACQUISITION STRATEGY CONSIDERATIONS

(Defense Acquisition Guidebook, Chapter 2)

NOTES: 1) The content of the Technology Development Strategy (TDS) due at Milestone A is very similar 

to the Acquisition Strategy due at Milestone B. 2) In addition to the Acquisition Strategy, there are five plans 

required: Acquisition Plan (FAR/DFARS), Program Protection Plan (PPP), Test and Evaluation Master Plan 

(TEMP) (DoDI 5000.02), Information Support Plan (ISP) (CJCSI 6212.01E ), and Systems Engineering Plan 

(DoDI 5000.02).

•	 Acquisition Approach

— Modular Open Systems Approach 

Summary 

— Tailoring

•	 Source & Related Documents

•	 Capability Needs

•	 Top-Level Integrated Schedule

— EMD Top-Level Schedule *

— MS C & FRP Top-Level Schedule *

•	 Program Interdependency & Interoperability

Summary

•	 International Cooperation

— Test Requirements for Export of 

Defense Systems

•	 Risk & Risk Management

•	 Technology Maturation

•	 Industrial Capability & Manufacturing

Readiness 

— Industrial Capability 

— Elevating Industrial Capability Issues 

— Industrial & Manufacturing Readiness

— Sustaining Industrial Capabilities 

•	 Business Strategy

— Small Business & Small Business 

Innovation Research 

◆ Subcontracting Plan/Small Business 

Participation

◆ Performance Measurement

◆ Small Business Innovation Research 

Considerations

— Contract Approach 

◆ Performance-Based Business 

Strategy 

– Modular Contracting

◆ Contracting Bundling or Consolidation 

◆ Major Contract(s) Planned

– Contract Type Selection

– Sustainment Procurement Strategy 

◆ Multi-Year Contracting 

◆ Contract Incentives 

◆ Warranties 

◆ Leasing

◆ Developmental Testing Requirements

◆ Incorporation of Systems Engineering 

Requirements

•	 Market Research

•	 Competition

•	 Resource Management

— PM Office Staffing & Support 

Contractors

— Cost & Funding 

— Cost Control & CAIV Plan 

— Earned Value Management 

— Advanced Procurement

•	 Program Security Considerations

— Information Assurance 

— Critical Program Information & Program 

Protection Plan Summary 

— Anti-Tamper Measures

— Supply Chain Risk Management Key 

Practices

•	 Test and Evaluation

•	 Data Management

— Data Management & Technical Data 

Rights 

— Integrated Data Management

•	 Life-Cycle Sustainment Planning

— LCSP Executive Summary for 

Acquisition Strategy

•	 Life-Cycle Signature Support Plan

•	 Chemical, Biological, Radiological and

Nuclear Survivability

•	 Human Resources Integration

•	 Environment, Safety and Occupational

Health (ESOH)

•	 Military Equipment Valuation &

Accountability 

— Proper Financial Accounting Treatment 

for Military Equipment 

— Accounting Review

•	 Corrosion Prevention & Control Plan/

Strategy
DAU PROGRAM MANAGERS TOOL KIT

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ACQUISITION, TECHNOLOGY AND LOGISTICS 

(AT&L) KNOWLEDGE MANAGEMENT SYSTEM

< https://acc.dau.mil/at&lkm >

(Composed of the following subsystems)

Defense Acquisition Portal (DAP)

The Defense Acquisition Portal (DAP) <https://dap.dau.mil/> 

was launched to replace the AT&L (Acquisition, Technology, and 

Logistics) Knowledge Sharing System (AKSS). Like its predecessor, DAP continues to provide acquisition information for all DoD service 

components and across all functional disciplines. DAP serves as the central 

point of access for all AT&L resources and information, and to communicate 

acquisition reform. As the primary reference tool for the Defense Acquisition workforce, it provides a means to link together information and reference assets from various disciplines into an integrated, but decentralized, 

information source. Information is organized under eight major tabs: Home, 

Acquisition Process, Workforce, Policy, Communities of Practice, Training 

and Education, Industry, and DAU. DAP is one part of the AT&L Knowledge 

Management System (AKMS). 

A major feature in DAP is the Acquisition Career Gateways <https://dap.

dau.mil/career/Pages/Default.aspx>, where each acquisition career field 

provides specific career, training, and job-specific information and resources. To tie it all together, the Search feature has been reengineered to make 

it easier to find specific learning assets or job support tools in the Portal. 

Ask A Professor (AAP)

Ask a Professor (AAP) <https://akss.dau.mil/aap> is a service 

offered as part of AKMS. Users submit acquisition-related questions and receive formal responses. In addition, the AAP contains 

a database of questions and answers that are categorized by subject area 

and can be browsed or searched. 

Acquisition Community Connection (ACC)

The ACC <https://acc.dau.mil/> is the collaborative component of 

the AKMS that focuses on acquisition-related topics and disciplines such as contracting, logistics, program management, and 

risk management. It consists of Communities of Practice, Special Interest 

Areas, and collaborative workspaces that: 

•	 connect people with know-how across DoD organizations and industry;
DAU PROGRAM MANAGERS TOOL KIT

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•	 enable members to interact and share resources, ideas, and

experiences to support job performance and avoid duplication of effort; 

and

•	 identify partnership development opportunities.

Members may request workspaces in ACC, which provide a way for physically dispersed individuals to centrally locate and share documents and 

references as well as manage team projects. To learn more, go to the ACC 

<https://acc.dau.mil/> and take the online virtual tour. 

Defense Acquisition Guidebook (DAG)

The DAG <https://acc.dau.mil/dag> provides links to policy, law, 

and useful content housed in communities of practice. It allows 

users to navigate through the DAG via a document index, graphical interface (Life Cycle System), or a search by topic. 

ACQuipedia

The ACQuipedia <https://acquipedia.dau.mil/> is your acquisition encyclopedia for common defense acquisition topics. Each 

topic is identified as an article; each article contains a definition, a 

brief narrative that provides context, and links to the most pertinent policy, 

guidance, tools, practices, and training. Articles aggregate the most relevant 

references and learning assets to narrowly focus users and quickly provide 

high-value content. 

Integrated Defense AT&L Life Cycle Management 

System Chart

(See next page for details)
DAU PROGRAM MANAGERS TOOL KIT

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This chart <https://acc.dau.mil/ifc> is a pictorial road map of key 

activities in the systems acquisition process. Users navigate 

through a graphical model of the three major acquisition process 

areas: Joint Capabilities Integration and Development System (JCIDS); Defense Acquisition; and Planning, Programming, Budgeting, and Execution 

(PPB&E). The short title for this chart is Integrated Life Cycle (ILC) Chart. 

 

AT&L ACQuire

ACQuire <https://acquire.dau.mil/> is a search tool focused on the 

specific needs of the Defense Acquisition Workforce. It uses the 

DAU acquisition taxonomy, trusted acquisition sites, and selected 

AT&L resources to enhance searches and derive better results. Searches 

can be conducted by individual or multiple sites; document titles; topic; content, via an index of major categories; and subcategories. 

Courseware is also searchable via ACQuire. Users can suggest additional 

AT&L sites that should be included in ACQuire crawls. 

Best Practices Clearinghouse (BPCh)

The BPCh <https://bpch.dau.mil/Pages/default.aspx> is an innovative “clearinghouse” approach that will improve all DoD acquisition processes by helping AT&L professionals select and implement proven practices appropriate to the individual program needs. Initially, 

the BPCh will focus on software acquisition and systems engineering. 

The Clearinghouse provides: 

•	 an authoritative source for practices, lessons learned, and risks to

avoid;

•	 validated practices with consistent, verifiable information;

•	 an active knowledge base to help with practice questions;

•	 an intelligent front-end to quickly get to answers;

•	 useful information and tools to help find, select, and implement

practices appropriate to specific programs; and

•	 living knowledge through a constantly updated, expanded, and refined

database.

Performance Learning Tools

Performance Learning Tools (PLTs) link learning and job support assets to 

complicated process flow to help users create plans and other AT&L products accurately and efficiently. The following PLTs have been developed: 

•	 Pricing Support Tool <http://pricingtool.dau.mil/>

•	 Performance-Based Logistics Toolkit <https://acc.dau.mil/pbltoolkit>
DAU PROGRAM MANAGERS TOOL KIT

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OIPT

Review

OIPT

Review

Defense Acquisition Board Timeline

25 DAYS

2 WEEKS 20 DAYS

15 DAYS

10 DAYS

5 DAYS Milestone

45 DAYS

40 DAYS

DAB DAB

21 DAYS

6 MONTHS

Final Document

Check for OIPT Final Document to OSD

AoA Results to

Dir, CAPE Final CCP

to CAPE CAPE Briefs Final

ICE to PM CAPE briefs

Preliminary

ICE to PM

Draft

CARD

to CAPE

10 DAYS

3 DAYS

DAB

ReadAhead

LEGEND: 

CAPE—Cost Assessment & Program Evaluation

CARD—Cost Analysis Requirements Description

CCE—Component Cost Estimate 

DAB—Defense Acquisition Board

ICE—Independent Cost Estimate 

JROC—Joint Requirements Oversight Council 

DAB Readiness

Meeting

DAB

Planning

Meeting

JROC

Review

OIPT

Report

 CAPE

Report to

OIPT

DEFENSE ACQUISITION BOARD TIMELINE —

MILESTONES B, C, AND FRPDR

MILESTONE DECISION INFORMATION — 

A POSSIBLE CONSTRUCT 

1

• Have I presented all necessary information?

• Does the information flow logically?

2 WHAT?

• Requirement

• Analysis of Alternatives

3 HOW?

• Acquisition Strategy

RISKS?

• Risk Management Plan

• Test & Evaluation Plan

• Test & Evaluation Results

4 COSTS?

• CAIV Objectives

• Life Cycle Cost Estimate

• Independent Cost Estimate

5 MANAGEMENT?

• Program Management Office Structure

• Integrated Product Team

• WIPT—OIPT Structure

6

AGREEMENT?

• Acquisition Program Baseline

• Acquisition Decision Memorandum

• Exit Criteria

7

WHY?

• Threat

• Capability

• Is the information clear and accurate?

• Is it concise, executive-level information?

LEGEND:

CAIV—Cost as an Independent Variable

OIPT—Overarching Integrated Product Team

WIPT—Working-Level Integrated Product Team
DAU PROGRAM MANAGERS TOOL KIT

10

REQUIREMENTS FOR MILESTONE/DECISION REVIEWS

See encl 4, DoDI 5000.02

Milestone/Decision Point

Requirement MDD A B P-CDRA C FRP

Acquisition Decision Memorandum5 X X X X X X

Acquisition Program Baseline5 X X X

Acquisition Strategy5 (see Page 5) X X X

Acquisition Information Assurance Strategy (all IT incl NSS) X X X X

Affordability Assessment X X

Alternate LF T&E Plan (programs with waiver from 

full-up LFT&E)2 X 

Analysis of Alternatives (AoA)3,5 X X X X

AoA Study Guidance X 

Benefit Analysis & Determination1,8 (bundled acquisitions) X 

Beyond LRIP Report 2 (incl MDAPs that are also MAIS) X

Capability Development Document (CDD)5 X 

Capability Production Document (CPD) X

Clinger-Cohen Act (CCA) Compliance5,7 X X X X

Competition Analysis1,8 (depot-level maintenance rule) X 

CIO Confirmation of CCA Compliance

(DoD CIO for MAIS and MDAP) X X X X

Component Cost Estimate5,9 (MAIS; optional MDAP) X X X

Consideration of Technology Issues (MDAP & MAIS) X X X

Cooperative Opportunities1 X X X

Core Logistics/Source of Repair Analysis1,8 X X

Corrosion Prevention Control Plan1 X X

Cost Analysis Requirements Description5,9 (MDAP & MAIS) X X X

Data Management Strategy1 (MDAP, MAIS & ACAT II) X X X X

Economic Analysis (MAIS)7 (may be combined w/AoA at MSA) X X X

Exit Criteria5 X X X X

Industrial Base Capabilities1 (MDAPs only) X X X

Independent Cost Estimate (ICE)5,10,15 (MDAPs only) X X X X

Independent Technology Readiness Assessment 11 X X

Information Support Plan1,5 X X X

Initial Capabilities Document (ICD)4,5 X X X X

Initial Operational Test & Evaluation Completed (ACAT I & II) X

Item Unique Identification (IUID) Plan (Part of SEP) X X X

Joint Interoperability Test Certification (IT & NSS) X

Life-Cycle Signature Support Plan5 X X X

Life-Cycle Sustainment Plan1 X X X

LF T&E Waiver2 (covered systems) (n/a MAIS) X 

LF T&E Report2 (covered systems) (n/a MAIS) X
DAU PROGRAM MANAGERS TOOL KIT

11

Milestone/Decision Point

Requirement MDD A B P-CDRA C FRP

LRIP Quantities MDAP & ACAT II (n/a AIS) X 

Manpower Estimate (MDAPS only)5 X X X

Market Research X X 

Milestone Decision Authority (MDA) Certification (MDAPs only)4 X X X

MDA assessment of chem, bio, rad, and nuc survivability X X

Military Equipment Validation1 X X

Net-Centric Data Strategy5,12 X X X

Operational Test Agency Report of OT&E Results X X X

Preliminary Design Review (PDR) Report16 X 

Post-Critical Design Review (CDR) Report X 

Post Implementation Review X

Program Protection Plan (PPP)1 X X X

Prog Environment, Safety & Occup Health Evaluation (PESHE)5 X X X

Replaced System Sustainment Plan5 (MDAPs only) X 

Selected Acquisition Report (SAR)4,13 

Spectrum Supportability Determination8 X X

System Threat Assessment (STA) (ACAT II)5,14 X X

System Threat Assessment Report (STAR) (ACAT I)5,6 X X

Systems Engineering Plan (SEP) X X X

Technology Development Strategy (TDS) X X X

Technology Readiness Assessment (TRA)5 X X

Test & Evaluation Master Plan (TEMP) X X X

Test & Evaluation Strategy (TES) X 

1

Part of TDS or Acquisition Strategy

2

OSD T&E Oversight Programs

3

MDAP: A,B,C; MAIS: A, B, FRP

4

Milestone C if Program Initiation

5

Program Initiation for Ships

6

Validated by DIA for ACAT ID; AIS use DIA validated capstone info/ops Threat Assessment Decision

7

Milestone C if equivalent to FRP

8

Milestone C if no Milestone B

9 MAIS whenever an economic analysis is required

10May be CAIG Assessment at Milestone A

11ACAT ID only if required by DDR&E

12Summarized in TDS; details in ISP

13SAR at program initiation; annually thereafter

14Validated by Component; AIS use DIA validated capstone info/ops Threat Assessment Decision

15 MDA may request cost assessment at Milestone A

16 If PDR is after Milestone B, MDA will conduct a post-PDR assessment review
DAU PROGRAM MANAGERS TOOL KIT

12

IT and NSS employed by U.S. Forces shall, where required (based on capability context), interoperate with existing and planned, systems and equipment, of joint, combined and coalition forces and with other U.S. Government Departments and Agencies, as appropriate. 

DoD Directive 4630.08

Service/

Agency

USJFCOM reviews NR-KPPs & solution architectures 

J-6 Interoperability and Supportability Certification

Joint

Staff

Joint

Staff Combatant Commands

JITC Interoperability Test Certification

• JITC witnesses/conducts interoperability tests, and• Provides Joint Interoperability Test Certification valid for 4 years or until

changes occur that affect interoperability of the certified capability

Certification TEMP/ Test Results JITC

CDD

CPD

ISP*

LEGEND:CDD — Capability Development Document CPD — Capability Production Document 

J-6

Certification*

Service/

Agency

ISP — Information Support Plan JITC — Joint Interoperability Test Command 

INTEROPERABILITY CERTIFICATION 

(CJCSI 6212.01E)

TEMP — Test and Evaluation Management Plan *NR-KPP certification
DAU PROGRAM MANAGERS TOOL KIT

13

(1) (2) (2) (3) (4) (3)

Warfighting Needs

&

R&D Objectives

Systems

S&T

Tech Base

Adv Tech

Dev

• Basic Research

Applied Research •

• Joint Capabilities Tech Demo

Advanced Technology DemoLab/field DemoWarfightingExperiments

•••

STOP

STOP

Oversight

Panel Oversight

Panel

Options:(1) Develop concepts for new systems.

(2) Insert into ongoing systems 

development.

(3) Upgrade system in production/out

of production or fielded systems.

(4) Improve sustainment or demilitarize/

dispose.

Production &

Deployment

Operations & 

Support

Engineering &

Manufacturing Development

Materiel Solution

Analysis

Technology

 Development

A B C

FRP

Decision

Review

Material

Development

Decision

Post-PDR

Assessment

Post-CDR

Assessment

IOC FOC

LRIP FRP&D ISD Life Cycle

Sustainment

Disposal

SCMPD

MDA

DECISION

LRIP—Low-Rate Initial ProductionMDA—Milestone Decision AuthorityPDR—Preliminary Design ReviewSCMPD—Syst Capability & Manuf Proc Demo

LEGEND:CDR—Critical Design ReviewFOC—Full Operational CapabilityFRP—Full-Rate ProductionIOC—Initial Operating CapabilityISD—Integrated Systems Design

S&T LINKAGE TO DEFENSE ACQUISITION PROCESS
DAU PROGRAM MANAGERS TOOL KIT

14

JOINT CAPABILITIES TECHNOLOGY 

DEMONSTRATION (JCTD) 

JCTD EXECUTION APPROACH

Annual call for proposals; proposals submitted at any time 

•	 Candidate projects identified by Combatant Commands, Services and

Agencies, Interagency or Coalition Partners, and industry

•	 Joint/Interagency Government-led teams build proposals

•	 Technical manager from Service or Agency

•	 Operational manager from Combatant Command chain-of-command

•	 Transition manager from Acquisition Community

•	 USD(AT&L) approval of recommended new starts

•	 Congressional Notification

•	 DDR&E/Rapid Fielding Directorate oversight during project execution

•	 Operational demonstration and rigorous assessment

•	 Continuous transition of capabilities demonstrating required

capabilities

Beginning in FY10: 

•	 Quarterly Candidate Decision Boards to recommend new starts,

chaired by DDR&E, co-chaired by Joint Staff Deputy J8

•	 Quarterly Review Boards to review ongoing projects

•	 More short projects (1 year or less); fewer long-term projects (more

than 1 year)

•	 All projects structured for deliverables in first year, with annual review

•	 JROC validation following first year of execution

CDB &

(DDR&E

Approval)

USD (AT&L)

Approval

Notify

Congress

CDB &

(DDR&E

Approval)

USD (AT&L)

Approval

Notify

Congress

JCTD Project Review Boards

Annual Review and Approval for New Fiscal Year Starts

JCTD Identification, Selection, and Review

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Now Dec

CNB

PRB

New JCTD

Proposals

PRB PRB PRB

Rack &

Stack

CDB &

DDR&E

Approval

CDB &

(DDR&E

Approval)

USD (AT&L)

Approval

Notify

Congress

USD(AT&L)

Approval

Notify

Congress

Legend:

CDB — Candidate Decision Board

CNB — Candidate Nomination Board 

PRB — Project Review Board 
DAU PROGRAM MANAGERS TOOL KIT

15

 ACQUISITION PROGRAM vs. ATD AND JCTD

• Gain understanding of and Implementation Directive/FAR/OTA

evaluate utility prior to acquisition decision

• Develop concepts of 

operation and doctrine

JROC Approval and Prioritization

MotivationDocumentedNeedOversight FundingACATConfiguration and TestingRulesRole of User

Fully FYDP Funded

Acquisition

Program

• Develop, produce, 

and field system

• Cost, schedule, 

performance

ICD/CDD/CPDMilestone Decision AuthorityAll ACATSystem/Subsystem Prototypes DT/OTDoD 5000 Series/FAR Max Involvement

Advanced Technology

Demonstration (ATD)

• Demonstrate feasibility Not ACAT Effort 

and maturity

• Reduce technical risks 

and uncertainties at relatively low cost

Not Required

Service-Level Labs/R&D Centers

RDT&ETechnology DemonstrationsInformal/FAR/OTASome Involvement

Joint Capability Tech 

Demonstration (JCTD)

DDR&E Oversight Panel with Joint StaffRDT&E (2 years in field)Not ACAT EffortTech Demonstrations in Field Environment/MUAMax Involvement

LEGEND:ACAT—Acquisition Category CDD—Capability Development DocumentCPD—Capability Production DocumentDDR&E—Director, Defense Research & Engineering

DT/OT—Developmental/Operational Testing FAR—Federal Acquisition Regulation FYDP—Future Years Defense Program ICD—Initial Capabilities Document

MUA—Military Utility Assessment
DAU PROGRAM MANAGERS TOOL KIT

16

PROGRAM STRUCTURE (Example—No Streamlining)

Milestone

Reviews &

Phases

Contract

Award

(Increment 1)

Technical

Reviews

(Increment 1)

Testing

(Increment 1)

LFT&E

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

Deliveries

(Increment 1) EDM LRIP Production

EOA OA

B

FRP IOC

Increment 2

B C IOC

MSA Tech Dev

RDT&EProcurementO&M

MILCON

TD

Increment 3

B C

Full-Rate Prod & Depl

Full-Rate Prod & Depl

A

PostCDR A

PostCDR A

LRIP PROD MSA EMD

A

Production & Deployment

FRP

C

Eng & Manuf Development

ISD SCMPD

PostCDR A

(Eng Dev Models)

Prototype

Competition

MDD

FOT&E

IOT&E

A

FRP IOC

LRIP Full-Rate Prod & Depl Operations & Support

PostPDR A

DT&E
DAU PROGRAM MANAGERS TOOL KIT

17

DOD INTERNATIONAL ARMAMENTS 

COOPERATION POLICY

“PMs shall pursue international armaments cooperation to the 

maximum extent feasible, consistent with sound business practice 

and with the overall political, economic, technological, and national 

security goals of the United States. International agreements for 

international armaments cooperation programs shall complete the 

interagency consultation and Congressional notification requirements 

contained in 10 U.S.C. 2350a, Section 2751 of the Arms Export 

Control Act, and 10 U.S.C. 2531.”

— DoDD 5000.01 (Para E1.1.1)

Production and

RDT&E Procurement Follow-on Support

Information Foreign Military Sales Cooperative Logistics

Exchanges Supply Support

Engineer and Direct Commercial Sales Mutual Support

Scientist Exchanges Exchanges

Cooperative R&D Cooperative Production Logistics Support

(Joint Funds)

Comparative or Coproduction/Licensing Host Nation Support

Joint Testing (Foreign Funds) Defense Industrial

Base

Standardization Reciprocal Procurement

 The Program Manager’s Focus

THE SCOPE OF DEFENSE COOPERATION
DAU PROGRAM MANAGERS TOOL KIT

18

INTERNATIONAL ACTIVITIES ASSOCIATED WITH 

DEFENSE ACQUISITION PHASES

DEFENSE SALES vs. COOPERATIVE ACQUISITION

They are Different

•	 Defense Sales

–	 Any Nation

–	 U.S. Contracts (FMS)

–	 U.S. Manages (FMS)

–	 Production and Support

–	 Dept. of State or Dept.

of Commerce + DoD 

(USD(Policy))

–	 Foreign Initiated

–	 Foreign Funds (or U.S.

Credit/Grants)

•	 Cooperative Acquisition

–	 Allied or Friendly

–	 U.S., Ally or NATO

–	 Jointly Managed

–	 All Acquisition

–	 DoD (USD(AT&L)) +

Dept. of State and 

Dept. of Commerce

–	 U.S. and/or Foreign Initiated

–	 Foreign + U.S. Funds

LEGEND:

DEA—Data Exchange Agreement

EMD—Engineering & Manufacturing Development

IEP—Information Exchange Project

S&E—Science and Engineering

Cooperative Production

Coproduction

 Licensed Production

 Production Sharing

Foreign Military Sales 

Technology Opportunities

and User Capability Needs

NATO Forums

DEAs/IEPs

Staff Talks

S&E Exchanges 

Cooperative Development

International Testing

Materiel Solution Analysis

and

Technology Development

System Capability and 

Manufacturing Process 

Demo of EMD Phase

Production 

and

Deployment, 

Sustainment
DAU PROGRAM MANAGERS TOOL KIT

19

RESOURCE ALLOCATION PROCESS—OVERLAP

FY11FY12FY13FY14FY15

CY11 CY12 CY13

Enactment Execution Planning

Programming &

Budgeting Enactment Planning

Enactment Execution

Execution

Programming &

Budgeting Planning

FY12 

FY11 & prior 

FY12 & prior 

FY13 FY13 & prior 

DPPG FY14–18

POM FY13–17BES FY13

FY14 FY14 &

prior

DPPG FY15–19

DPPG FY13–17

POM FY14–18BES FY14

LEGEND:DPPG—Defense Planning & Programming Guidance PB—President’s BudgetPOM—Program Objectives Memorandum BES—Budget Estimate Submission 

J F M A M J A S O N D J

Execution

J F M A M J A S O N D J J F M A M J A S O N D J

POM FY15–19BES FY15

Programming &

Budgeting

PB

PB

PB
DAU PROGRAM MANAGERS TOOL KIT

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PPBE—PLANNING PHASE 

PPBE—PROGRAM/BUDGET REVIEW

LEGEND:

CPR—Chairman’s Program Recommendation 

CJCS—Chairman, Joint Chiefs of Staff

DPPG—Defense Planning & Programming Guidance

QDR—Quadrennial Defense Review

FEB

President

National

Security

Strategy

National

Defense

Strategy

National

Military

Strategy

Joint Strategy Review(Joint Staff, Combatant Commands, Military Departments) 

National Security Council

National Strategy Documents

Provide Input to PPBE

MAR APR MAY JUN

SECDEF

Joint Staff/OSD

CJCS

Joint Staff

Components

Military Departments

Defense Agencies

Unified Commands

every 4 

years SECDEF QDR

CPR

DPPG

Front End Assessments

DEC FEB

SECDEF

CPA

POM

BES

Components

Components (PEO/PM)

Budget Review

Program Review

SECDEF Option

President’s

Budget

Major Budget

Issues

Updates

FYDP

Updates

FYDP

Military Departments

Defense Agencies

Unified Commands

Resource

Management

Decisions

OSD/OMB

OSD/3-Star Programmers/DAWG

Answer questions / Reclama decisions

OSD Budget Execution & Program Performance Review

Front End Assessments

CJCS

JUL AUG OCT NOV

LEGEND:

BES—Budget Estimate Submission

CPA—Chairman’s Program Assessment

DAWG—Deputy’s Advisory Working Group

FYDP—Future Years Defense Program

POM—Program Objectives Memorandum
DAU PROGRAM MANAGERS TOOL KIT

21

RESOURCE ALLOCATION PROCESS

Phase II:

Phase I:

Testimony Appeals

Phase III:Phase IV

Allocation/Execution

:

Congress

Enactment

BudgetCommittees

President’sBudget

PPBE

President& OMB

DoD

AuthorizationCommittees

Authorization/AppropriationActs Passed

AppropriationCommittees

Apportionment
DAU PROGRAM MANAGERS TOOL KIT

22

CONGRESSIONAL ENACTMENT TIMETABLE

15 15

^

^

BUDGETRESOLUTIONAUTHORIZATIONAPPROPRIATION

JAN FEB APR MAR MAY JUN JUL AUG SEP OCT

“TARGET”

FISCAL

YEAR

PRESBUDGET

COMMITTEEINPUTS

HOUSESENATEHOUSESENATE

ACT

CONF/

REPT

CONF/

REPT

FLOOR

FLOOR

FLOOR

FLOOR

FLOOR

HRNGS MARKS FLOOR

BILL/RPT

BILL/RPT

BILL/RPT

BILL/RPT

HOUSESENATE

 RESOLUTION CONF

HRNGS MARKS FLOOR

HASC HRNGS MARK-UP FLOOR

SASC HRNGS MARK-UP FLOOR

HAC HRNGS MARK-UP FLOOR

SAC HRNGS MARK-UP FLOOR

ACT

^

FLOOR

^
DAU PROGRAM MANAGERS TOOL KIT

23

PROCUREMENT APPROPRIATIONS

(Account Numbers and Budget Activities)

Appropriation Budget Activity

Army (21 -)

Aircraft - 2031 1 Aircraft

2 Modification of Aircraft 

3 Spares and Repair Parts 

4 Support Equipment and Facilities

Missile - 2032 1 Not Used

2 Other Missiles 

3 Modification of Missiles

4 Spares and Repair Parts

5 Support Equipment and Facilities

Weapons and Tracked - 2033 1 Tracked Combat Vehicles 

Combat Vehicles 2 Weapons and Other Combat Vehicles 

3 Spares and Repair Parts

Ammo - 2034 1 Ammo 

2 Ammo Production Base Support

Other - 2035 1 Tactical and Support Vehicle 

2 Communications and Electronics 

3 Other Support Equipment 

4 Initial Spares

Navy (17 -)

Aircraft - 1506 1 Combat Aircraft 

2 Airlift Aircraft 

3 Trainer Aircraft 

4 Other Aircraft 

5 Modification of Aircraft 

6 Aircraft Spares and Repair Parts 

7 Aircraft Support Equipment and Facilities

Weapons - 1507 1 Ballistic Missiles 

2 Other Missiles 

3 Torpedoes and Related Equipment 

4 Other Weapons 

5 Not Used 

6 Spares and Repair Parts

Ammo, Navy and - 1508 1 Ammo, Navy

Marine Corps 2 Ammo, Marine Corps

Shipbuilding - 1611 1 Not Used

and Conversion 2 Other Warships

3 Amphibious Ships 

4 Not Used 

5 Auxiliaries, Craft, and Prior-Year Program Costs

Other - 1810 1 Ships Support Costs

2 Communications and Electronics Equipment 

3 Aviation Support Equipment 

4 Ordnance Support Equipment 

5 Civil Engineering Support Equipment

6 Supply Support Equipment
DAU PROGRAM MANAGERS TOOL KIT

24

PROCUREMENT APPROPRIATIONS

(Account Numbers and Budget Activities) (Continued)

Other (continued) -1810 7 Personnel and Command Support Equipment 

8 Spares and Repair Parts

Marine Corps (17 -)

Procurement - 1109 1 Not Used

2 Weapons and Combat Vehicles

3 Guided Missiles and Equipment

4 Communications and Electronics Equipment

5 Support Vehicles

6 Engineering and Other Equipment

7 Spares and Repair Parts

Air Force (57 -)

Aircraft - 3010 1 Combat Aircraft 

2 Airlift Aircraft 

3 Trainer Aircraft 

4 Other Aircraft

5 Modification of In-Service Aircraft

6 Aircraft Spares and Repair Parts 

7 Aircraft Support Equipment and Facilities

Missile - 3020 1 Ballistic Missiles

2 Other Missiles

3 Modification of In-Service Missiles

4 Spares and Repair Parts

5 Other Support

Ammo - 3011 1 Ammo

2 Weapons

Other - 3080 1 Not Used

2 Vehicular Equipment

3 Electronics and Telecommunications Equipment

4 Other Base Maintenance and Support Equipment

5 Spares and Repair Parts

Defense (97 -)

Defense-wide - 0300 1 Major Equipment

2 Special Operations Command

3 Chemical/Biological Defense

National Guard - 0350 1 Reserve Equipment

and Reserve 2 National Guard Equipment

Equipment 

Defense Production - 0360 1 Defense Production Activity Purchases

Activity

Purchase

Chemical Agents - 0390 1 Chemical Agents and Munitions Destruction—O&M

and Munitions 2 Chemical Agents and Munitions Destruction—RDT&E

Destruction 3 Chemical Agents and Munitions Destruction—

 Procurement

Rapid Acquisition Fund -2095 1 Rapid Acquisition Fund

Appropriation Budget Activity
DAU PROGRAM MANAGERS TOOL KIT

25

RDT&E APPROPRIATIONS

(Relationship Between MFP 6 R&D Categories and 

RDT&E Appropriations Budget Activities)

RESEARCH, DEVELOPMENT, TEST, AND EVALUATION 

(RDT&E) APPROPRIATIONS

(Account Numbers)

MFP 6 RDT&E

R&D Budget RDT&E

Category Activity Budget Activity Title

6.1 BA 1 Basic Research 

6.2 BA 2 Applied Research

6.3 BA 3 Advanced Technology Development

6.4 BA 4 Advanced Component Development and 

Prototypes

6.5 BA 5 System Development and Demonstration

6.6 BA 6 RDT&E Management Support 

 --- BA 7 Operational System Development

*NOTE: Although similar, titles of the Major Force Program (MFP) 6 categories (which are not shown above) 

are not exactly the same as titles of the RDT&E Appropriation Budget Activities. In addition, the “Operational 

System Development” Budget Activity for RDT&E BA 7 is not considered MFP 6. While correctly funded 

with RDT&E dollars, these efforts do not fall under a MFP 6 Category; rather, for MFP purposes, the efforts 

are considered part of the MFP that the fielded operational system falls within. Congress calls BA 4, 

Demonstration and Validation, and calls BA 5, Engineering and Manufacturing Development. 

Account 

Appropriation Number

RDT&E, Army	 21 – 2040

RDT&E, Navy	 17 – 1319

RDT&E, Air Force	 57 – 3600

RDT&E, Defense-wide	 97 – 0400

Development T&E, Defense	 97 – 0450

Operational T&E, Defense	 97 – 0460

LEGEND:

BA—Budget Activity

MFP—Major Force Program

R&D—Research and Development

T&E—Test and Evaluation
DAU PROGRAM MANAGERS TOOL KIT

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SAMPLE NAVY APPROPRIATIONS AND 

BUDGET ACTIVITIES

*Below Threshold Reprogramming (BTR) amount limits are cumulative over entire period of time the

 specific fiscal year appropriation is available for obligation purposes (i.e., 1, 2, 3, or 5 years).

**Reference Source: DoD FMR, Volume 3, Chapter 6, a/o September 2010.

PROCUREMENT (Proc.)

SCN-1 Not Used Lesser of Lesser of 5 Full

SCN-2 Ship Conversion—Other Warships +$20M or -$20M or

SCN-3 Ship Conversion—Amphibious Ships +20% of -20% of

SCN-4 Not Used amount amount

SCN-5 Ship Conversion—Auxiliaries, Craft, and appropriated appropriated

Prior-Year Program Costs

WPN-1 Weapons Proc—Ballistic Missiles 3

WPN-2 Weapons Proc—Other Missiles

WPN-3 Weapons Proc—Torpedos and Equipment

WPN-4 Weapons Proc—Other Weapons

WPN-5 Not Used

WPN-6 Weapons Proc—Spares and Repair Parts

OPN-1 Other Proc—Ship Support Equipment (SE)

OPN-2 Other Proc—Comm./Electronics Equip.

OPN-3 Other Proc—Aviation SE

OPN-4 Other Proc—Ordnance SE

OPN-5 Other Proc—Civil Engineering SE

OPN-6 Other Proc—Supply SE

OPN-7 Other Proc—Pers. and Command SE

OPN-8 Other Proc—Spares and Repair Parts

APN-1 Aircraft Proc—Combat Aircraft

APN-2 Aircraft Proc—Airlift Aircraft

APN-3 Aircraft Proc—Trainer Aircraft

APN-4 Aircraft Proc—Other Aircraft

APN-5 Aircraft Proc—Modifications of Aircraft

APN-6 Aircraft Proc—Aircraft Spares and Repair Parts

APN-7 Aircraft Proc—Aircraft SE and Facilities

 

6.1 BA 1 Basic Research Lesser of Lesser of 2 Incremental

6.2 BA 2 Applied Research +$10M or -$10M or 

6.3 BA 3 Advanced Tech. Development +20% of -20% of

6.4 BA 4 Adv. Comp. Dev. and Prototypes amount amount

6.5 BA 5 System Devel. and Demo. appropriated appropriated

6.6 BA 6 RDT&E Management Support 

 (T&E Ranges) (Civilian Salaries)

BA 7 Operational Systems Devel.

 (Post-Production)

Procurement Below Threshold Years Available

Budget Budget Activity Reprogramming Rules for Obligation Funding

Activity Description Max In Max Out Purposes Policy

 (At Line Item Level)

MFP 6 Below Threshold Years Available 

R&D RDT&E Budget Activity (BA) Reprogramming Rules for Obligation Funding

Category Number and Title Max In* Max Out* Purposes Policy

 (At Prog. Element Level)

 Below Threshold Years Available

 Reprogramming Rules for Obligation Funding

Other Appropriations / Titles Max In Max Out Purposes Policy

O&M, N Operations and Maintenance $15M No Congressional 1 Annual

 Restriction 

MILPER, N Military Personnel $10M No Congressional 1 Annual

 Restriction 

MILCON, N Military Construction Lesser of No Congressional 5 Full

 +$2.0M or +25% Restriction 

 Appropriated
DAU PROGRAM MANAGERS TOOL KIT

27

BELOW THRESHOLD REPROGRAMMING ACTIONS

Amounts are Cumulative Over Entire Period of 

Obligation Availability

APPROPRIATION LIFE

Reference Sources: (1) USD (C) Memo; SUBJECT: FY 2006 Below Threshold Reprogramming Authority Policy, 

10 Feb 2006, (2) USD (C) Memo, SUBJECT: DD 1414, Base for Reprogramming Actions, 5 Jan 2010

APPN

RDT&E

PROC

O&M

MILPERS

MILCON 

MAX OUT

Lesser of

-$10M or

-20%

Lesser of 

-$20M or

-20% 

None, Unless

Otherwise

Specified 

No Specific

Congressional

Restriction

No Specific

Congressional

Restriction

OBLIGATION

AVAILABLE

2 Years

3 Years

(Shipbuilding

and Conversion, 

Navy: 5 Years) 

1 Year

1 Year

5 Years

LEVEL OF CONTROL

Program Element

Line Item

Budget Activity (BA)

Some BA 1 Sub-activity

Limitations on Decreases

(Operating Forces)

Budget Activity 

Project

MAX INTO

Lesser of

+$10M or

+20%

Lesser of 

+$20M or

+20% 

+$15M

+$10M

Lesser of

+$2M 

+25%

Current Period: Available for new obligations, obligation adjustments, expenditures, and outlays

Expired Period: Available for obligation adjustments, expenditures, and outlays

Cancelled: Unavailable for obligations, obligation adjustments, expenditures, and outlays

O&M

RDT&E

PROCUREMENT

SHIPS 

MILCON 

MILPERS

 YEARS

1 2 3 4 5 6 7 8 9 10 11 
DAU PROGRAM MANAGERS TOOL KIT

28

LIFE CYCLE COST COMPOSITION

PRODUCT IMPROVEMENTS

Funding Decision Tree

IF . . .

THEN . . . 

AND . . . 

Fund Purchase of the Mod Kits and 

Installation of those Mod Kits on the 

Fielded System with . . . 

Does Proposed

Modification (Mod)

Increase System 

Performance?

Is System

Currently In

Production? 

NO 

Procurement $ O&M $

NO

YES YES

Fund Development 

and Testing with . . . 

(To Include the Mod 

Kits used for Testing)

Is DT or IOT&E 

Required?

Procurement $

YES

RDT&E $ 

NO

RDT&E

Development Costs of

PME and Support Items

Systems Engineering

Program Management

Test and Evaluation

Flyaway Cost

PROCUREMENT

Prime Mission

Equipment (PME)

Weapon System Cost

Procurement Cost

PROCUREMENT

Initial Spares

MILCON

Facilities

Operations and

Support

•O&M, MILPERS

(or others as 

appropriate)

PROCUREMENT

Support Items

Program Acquisition Cost

Life Cycle Cost

Disposal

O&M (or others

 as appropriate)

•

Development Cost
DAU PROGRAM MANAGERS TOOL KIT

29

Estimate Methods Comments

Analogy Comparison to one similar existing system; 

 based on judgments. Little or no data available; 

 relatively quick, easy, flexible. Used in early phases 

 (e.g., Material Solution Analysis and Tech. Dev.)

Parametric Comparison to many similar existing systems;

 based on statistical analysis. Determine 

 primary cost drivers and establish Cost

 Estimating Relationships (CERs). Used in early 

 to mid-phases (e.g., Material Solution Analysis, 

 Tech. Dev., and Engr. and Manufacturing Dev.)

Engineering or Summation of “all” individual items in the system.

“Bottoms-Up” Uses Work Breakdown Structure (WBS) 

 for estimating purposes. Used in mid-phases 

 (e.g., Engineering and Manufacturing Development)

Extrapolation Comparison to historical cost of same system. 

 Based on extrapolation from actuals. Uses 

 Learning Curve Theory. Used in late phases 

 (e.g., Production and Operations/Support)

COST ESTIMATING

Guidelines

1. Make sure cost data are relevant and homogeneous. Caution: Watch out for 

historical data in times of change. Prior actuals may include uncompensated 

overtime or were priced as a “buy-in.”

2. Focus on cost drivers.

3. Test sensitivities and data relationships.

COST ESTIMATING RELATIONSHIPS (CER)—

PARAMETRIC

Regression Line

Cost ($)

Predicted

Cost with

Parameter

(size)

Parameter

(e.g., size, wt., etc.)

= Similar Systems
DAU PROGRAM MANAGERS TOOL KIT

30

COST ESTIMATING REQUIREMENTS

POE

CARD

CCE

ICE

ACAT IC and ID (MDAP)

Program initiation & all subsequent 

milestones, including FRP DR

Program initiation & all subsequent 

milestones including FRP DR

•	 Draft: 180 days prior to OIPT

•	 Final: 45 days prior to OIPT

MS A and all subsequent milestones

including FRP DR

ACAT IAM and IAC (MAIS)

Program initiation & all subsequent

milestones

Program initiation & whenever 

Economic Analysis is required

•	 Draft: 180 days prior to OIPT

•	 Final: 45 days prior to OIPT

MS A and whenever an Economic

Analysis including is required

LEGEND:

AFCAA—Air Force Cost Analysis Agency

CAE—Component Acquisition Executive

CAPE—Cost Assessment & Program Evaluation

CARD—Cost Analysis Requirements Description

CCE—Component Cost Estimate

DASA-CE—DepAsst Sec of Army (Cost & 

Economics)

FRP DR—Full Rate Production Decision Review

ICE—Independent Cost Estimate

MAIS—Major Automated Information System

MDA—Milestone Decision Authority

MDAP—Major Defense Acquisition Program

NCCA—Naval Center for Cost Analysis

OIPT—Overarching Integrated Product Team

POE—Program Office Estimate

USD(AT&L)—Under Secretary of Defense 

(Acquisition, Technology, & Logistics)

ACAT II & ACAT III: POE (and, at MDA discretion, an 

independent cost estimate prepared by the component cost 

agency) at program initiation and all subsequent milestones

Required by law for all MDAP programs *

• Prepared by OSD CAPE for ACAT ID, and ACAT ICat discretion of USD (AT&L)

• Prepared by component cost agency (AFCAA,DASA-CE, NCCA) for ACAT IC (if no

CAPE estimate)

• In advance of any certification under Title 10, U.S.C., Section 2366a (MS A) and

Section 2366b (MS B)

• In advance of any decision to enter low-rate initial production (LRIP) (MS C) or

full-rate production (FRP DR)

• In advance of any certification of MDAPs that experience critical cost growth (Title

10, U.S.C., Sec 2433a)

• In advance of any report of Critical Program Changes for MAIS (Title 10, U.S.C.,

Sec 2445c(f))

*ICE statutory requirement (Title 10, US Code, Sec 2434) and P.L. 111-23, May 22, 2009

Source: DoDI5000.02, December 2008 and Weapon Systems Acquisition Reform Act of 2009
DAU PROGRAM MANAGERS TOOL KIT

31

PROGRAM COST AND SCHEDULE BREACH PARAMETERS

ScheduleMilestonesCost Reports Required if Breach Occurs 

SAR

(Title 10, U.S.C., Sec 2432)

6 month slip from previous SAR15/30% PAUC Growth(Current/Original)15/30% APUC Growth(Current/Original)Quarterly SAR

 Unit Cost Report (UCR)

(Title 10, U.S.C., Sec 2433) (Nunn-McCurdy)

N/A15/30% PAUC Growth(Current/Original)15/30% APUC Growth(Current/Original)Quarterly/Exception DAES Service notifies Congress (≥15/30%) SecDef Certification (≥25/50%)

 APB

(Title 10, U.S.C., Sec 2435)

Slip beyond threshold date

* Default threshold = objective plus

6 months; MDA discretion

15/30% PAUC Growth 15/30% APUC Growth(Current/Original)* RDT&E Growth* Procurement Growth* MILCON or O&M Growth* 10% default; MDA discretionProgram Deviation Report(PM notifies MDA)

Applicable to Major Defense Acquisition Programs (MDAPs)

ACAT II and III: 15/30% PAUC/APUC APB breach parameters are N/A; actual breach parameters at MDA discretion

Critical Cost Growth (APB/SAR/UCR)PAUC or APUC increases of 25% of current baseline or 50%of original baseline requires Sec Def certification to Congress:— Essential to National Defense— No acceptable alternative capability at less cost— New estimates are reasonable per Dir, CAPE— Program cost growth higher priority than programs providing offsets— Management structure adequate to control costs

Significant Cost Growth (APB/SAR/UCR)PAUC or APUC increases of 15% of current baseline or 30% of original baseline is “reportable” to Congress.

LEGEND :APB—Acquisition Program BaselineAPUC—Average Procurement Unit CostDAES—Defense Acquisition Executive Summary 

Dir, CAPE—Director, Cost Assessment & 

Program Evaluation

PAUC—Program Acquisition Unit Cost 

SAR—Selected Acquisition Report
DAU PROGRAM MANAGERS TOOL KIT

32

Management Reserve

EAC

TAB

BAC

Cost { Variance

Schedule Variance

PMB

ACWP

BCWP

BCWS

Time Time

Now

Completion

Date

$ }

EARNED VALUE MANAGEMENT “GOLD CARD”

VARIANCES Favorable is Positive, Unfavorable is Negative

Cost Variance CV = BCWP – ACWP CV % = (CV / BCWP) * 100

Schedule Variance SV = BCWP – BCWS SV % = (SV / BCWS) * 100

Variance at Completion VAC = BAC – EAC

OVERALL STATUS

% Schedule = (BCWSCUM / BAC) * 100

% Complete = (BCWPCUM / BAC) * 100

% Spent = (ACWPCUM / BAC) * 100

DoD TRIPWIRE METRICS (TW) (TW) Cost Efficiency CPI = BCWP/ACWP Favorable is > 1.0, Unfavorable is < 1.0

(TW) Schedule Efficiency SPI=BCWP/ BCWS Favorable is > 1.0, Unfavorable is < 1.0

(TW) BASELINE EXECUTION INDEX (BEI) (Schedule Metric)

 BEI = Tasks with Actual Finish Date/(# of Baseline Tasks Scheduled to Finish Prior to Status 

 Date + Tasks Missing Baseline Start or Finish Date)

(TW) CRITICAL PATH LENGTH INDEX (CPLI) (Schedule Metric)

 CPLI = (CP Length (Time Now to Contract End) + Total Float (To Contract End Baseline Finish)) / CP Length

HIT/MISS (Month’s Task Completed ON or AHEAD/ Month’s Tasks Scheduled to Complete)

TO COMPLETE PERFORMANCE INDEX (TCPI) # §

TCPIEAC = Work Remaining / Cost Remaining = (BAC – BCWPCUM) / (EAC – ACWPCUM)

ESTIMATE AT COMPLETION# (EAC) (Actuals to Date + [(Remaining Work)/(Performance Factor)]

EACCPI = ACWPCUM + [(BAC – BCWPCUM) /CPICUM ] = BAC/CPICUM

EACComposite = ACWPCUM + [(BAC – BCWPCUM) / (CPICUM * SPICUM)]

#To determine a contract level TCPI or EAC, you may replace BAC with TAB.

§To determine the TCPI BAC or LRE, substitute BAC or LRE for EAC.

 For more information, go to the EVM Home Page at https://acc.dau.mil/evm, e-mail EVM at 

 EVM.dau@dau.mil, or call 703-805-5259 (DSN 655).
DAU PROGRAM MANAGERS TOOL KIT

33

Control

Accounts

Summary Level

Planning Packages

Undistributed

Budget

Work Packages Planning Packages 

OVERRUN AUW 

Control

Accounts

NCC 

OTB 

TAB Profit / Fees 

Summary Level

Planning Packages 

Contract Price 

CBB 

PMB Management Reserve

Undistributed

Budget

EARNED VALUE MANAGEMENT “GOLD CARD” 

(Continued)

TERMINOLOGY

ACWP Actual Cost of Work Performed Cost actually incurred in accomplishing work performed =

 ACTUAL COST

AUW Authorized Unpriced Work Work contractually approved, but not yet negotiated /definitized

BAC Budget At Completion Total budget for total contract thru any given level

BCWP Budgeted Cost for Work Perf. Value of completed work in terms of the work’s assigned budget = 

 EARNED VALUE

BCWS Budgeted Cost for Work Sched. Time-phase Budget Plan for work currently scheduled = 

 PLANNED VALUE

CA Control Account Lowest CWBS element assigned to a single focal point to plan and

 control scope/schedule/budget

CBB Contract Budget Base Sum of NCC and AUW

EAC Estimate At Completion Estimate of total Cost for total contract thru any given level;

 may be generated by Ktr, PMO, DCMA, etc. = EACKTR/PMO/DCMA

LRE Latest Revised Estimate Ktr’s EAC or EACKTR

MR Management Reserve Budget withheld by Ktr PM for unknowns/risk management

NCC Negotiated Contract Cost Contract Price minus profit / fee(s)

OTB Over Target Baseline Sum of CBB and recognized overrun 

PAC Price At Completion NCC Plus Profit or Fee(s)

PMB Perf. Measurement Baseline Contract time-phased budget plan

PP Planning Package Far-term CA activities not yet defined into WPs

SLPP Summary Level Plan. Package Far-term activities not yet defined into CAs 

TAB Total Allocated Budget Sum of all budgets for work on contract = NCC, CBB, or OTB 

TCPI To Complete Performance Index Efficiency needed from ‘time now’ to achieve an BAC, EAC, or LRE

UB Undistributed Budget Broadly defined activities not yet distributed to CAs 

WP Work Package Near-term, detail-planned activities within a CA 

EVM POLICY: DoDI 5000.02, Table E4.T5. EVMS in accordance with ANSI/EIA-748 is required for cost or 

incentive contracts, subcontracts, intra-government work agreements, and other agreements valued

≥ $20M (Then-Yr $). EVMS contracts ≥ $50M (TY $) require that the EVM system be formally validated 

by the cognizant contracting officer. Additional guidance is in the Defense Acquisition Guidebook and the 

Earned Value Management Implementation Guide (EVMIG). EVMS is discouraged on Firm-Fixed Price & 

Time & Material Contracts, & LOE activities regardless of cost. 

EVM CONTRACTING REQUIREMENTS:

FAR EVM Clauses Non-DoD — 52.234-2 for Solicitation (Pre-Award IBR) or 52.234-3 (Post Award IBR) 

 — 52.234-4 Solicitation & Contract

DoD Use DFAR Clauses ( ≥ $20M) — 252.234-7001 “Notice of EVMS” for solicitations 

 — 252.234-7002 “EVMS” for solicitations & contracts

Contract Performance Report — DI-MGMT-81466A* 5 Formats (WBS, Organization, Baseline, Staffing & Explanation) 

Integrated Master Schedule — DI-MGMT-81650* (Mandatory for DoD EVMS contracts)

Integrated Baseline Review (IBR) — Mandatory for all EVMS contracts 

*See the EVMIG for CPR and IMS tailoring guidance.
DAU PROGRAM MANAGERS TOOL KIT

34

CONTRACTING—COMPONENTS OF 

CONTRACT PRICE

TYPES OF CONTRACTS

Cost Family — Appropriate when product not well defined; high risk; 

contractor provides best efforts; government pays all allowable costs. Fee 

varies by type. 

Cost Plus Fixed Fee — Fee same regardless of actual cost outcome. 

Cost Plus Incentive Fee — Actual fee earned computed by applying share 

ratio to over/under run, subject to min/max fee limits. 

Fixed Price Family — Product well defined, low risk; contractor must deliver 

product. 

Firm Fixed Price — Price fixed regardless of actual cost incurred. 

Fixed Price Incentive (Firm Target) — Final price computed by applying 

share ratio to over/underrun, subject to ceiling price limitation. 

Award Fee — Either stand-alone Cost Plus Award Fee or combined with cost 

or fixed price types. Award Fee unilaterally determined by government based 

on subjective evaluation of contractor’s performance.

Fee Limits: Cost Plus Fixed Fee — Fee limited to 15% for R&D; 10% for 

production and services. No statutory or FAR/DFARS regulatory limitation on 

other contract types. 

Contract Price = Cost + Profit / Fee

Other

Direct Cost

Subcontracts

TYPICAL CONTRACT TYPE BY PHASE

MSA TD EMD/ISD EMD/SCMPD PROD

CPFF, FFP CPFF, FFP FPI(F), CPFF, CPIF CPIF, CPAF FPI(F), FFP

FCCM

Engineering

Labor

Manufacturing

Labor

Raw

Material

Purchased

Parts

Engineering

Support

Manufacturing

Support

Material

Handling Standard

Comm

Items Interdivisional

Transfers

G&A

Direct Cost Indirect Cost

Direct Labor Direct Material Overhead

LEGEND:

AF — Award Fee 

CPAF — Cost Plus Award Fee 

CPFF — Cost Plus Fixed Fee 

CPIF — Cost Plus Incentive Fee 

CR — Cost Reimbursement 

EMD — Engineering and Manufacturing 

Demonstration 

FAR/DFARS — Federal Acquisition 

Regulation/Defense FAR Supplement 

FCCM — Facilities Capital Cost of Monies 

FFP — Firm Fixed Price 

FPI(F) — Fixed Price Incentive (Firm Target) 

G&A — General and Administrative (Expense) 

ISD — Integrated System Design 

MSA — Materiel Solution Analysis 

ODC — Other Direct Cost 

PROD — Production 

R&D — Research and Development 

SCMPD — System Capability and Manufacturing 

Process Demonstration

TD — Technology Development 
DAU PROGRAM MANAGERS TOOL KIT

35

CONTRACT TYPE FEATURES

PRICE = COST + FIXED FEE

Cost Plus Fixed Fee (CPFF)

FEE

FIXED

FEE

(SHARE 100/0)

COST ESTIMATED COST

• Risk Highest to the Government

• Obtains Fee Regardless of Cost

FEE

COST TARGET COST

MAX

TARGET

MIN

Cost Plus Incentive Fee (CPIF) 

Share

 Ratio

(Target) PRICE = (Target) COST + (Target) FEE

• All Reasonable Cost Paid

• Shared Risk Between Min/Max Fee

Promise

Contractor Risk

Cash Flow

Progress Payments %

Administration

Fee Limit %

FIXED 

PRICE

COST 

REIMBURSEMENT

Best Efforts

Low

As Incurred

N/A

High

15/10/6 on CPFF

Delivery

High

Delivery

75/90/95

Low

None 
DAU PROGRAM MANAGERS TOOL KIT

36

CONTRACT TYPE FEATURES

(Continued)

Fixed Price Incentive (Firm Target) (FPI(F))

Firm Fixed Price (FFP)

PRICE = COST + PROFIT 

COST

0/100 SHARE

 PROFIT

COST TARGET COST

PTA

Share 

Ratio 

CEILING 

PRICE

PROFIT

TARGET 

PROFIT 

Point of Total 

Assumption = CEILING PRICE – TARGET PRICE + Target Cost 

(PTA) GOVERNMENT SHARE 

(Target) PRICE = (Target) COST + (Target) PROFIT
DAU PROGRAM MANAGERS TOOL KIT

37

PRE-SOLICITATION PROCESS

POST-SOLICITATION PROCESS

Market

Research

Acquisition

Strategy Requirement

Acquisition

Plan

Post Draft RFP

on Electronic

Bulletin Board

FBO/CBD Notice

Advisory Multi-Step

Finalize

RFP 

CBD Notice of

RFP

Release

RFP Release

to Industry

Source

Selection Plan/

Strategy

RFP Release

Briefing to

SSA

LEGEND:

FBO/CBD—FedBizOps/Commerce Business Daily 

RFP—Request for Proposal

SSA—Source Selection Authority

SSAC—Source Selection Advisory Council

SSA

Decision

Receipt of Oral

and Written

Proposals 

Initial Eval Clarifications

Limited Communications

Competitive

Range

Determination

Face-to-Face

Discussions/

Negotiations

Debrief

Unsuccessful

Offerors

Contract Award

(Distribution) 

 Brief

SSAC

Request Final

Proposal

Revision

Receive and

Analyze 

Final Revision 

Brief

SSA

Receive and Analyze

Field Surveys 

(if requested)

Prepare for Discussions

with

Remaining Offerors
DAU PROGRAM MANAGERS TOOL KIT

38

OTHER WAYS TO BUY

•	 GSA Multiple Award Schedules (MAS)

–	General Services Administration contracts for both products and

services—available to all agencies.

•	 Government-Wide Agency Contracts (GWACs)

–	Similar to MAS, but more restricted in products and services available.

•	 Indefinite Delivery/Indefinite Quantity Contracts

–	Task orders (services) and delivery orders (products) issued under

omnibus umbrella contract. 

•	 Other Transactions (OT)

–	Defined: Vehicles used for basic, applied, and advanced research 

projects and prototype development. OTs are not contracts, grants, 

or cooperative agreements.

–	Objective: Attract commercial companies and consortia that 

historically have not done business with the Department of 

Defense because of statutory and/or regulatory requirements. OTs 

are not subject to the Federal Acquisition Regulation. Designed to 

increase DoD access to dual-use technologies.

–	Research Projects:

◆ Where practical, government cost share should not exceed cost 

share of other parties.

◆ Use OT when standard contract, grant, or cooperative agreement is 

not appropriate.

–	Prototype Projects:

◆ Must be directly relevant to weapons or weapon systems 

proposed to be acquired or developed by DoD.

–	Constraints:

◆ At least one nontraditional contractor participating.

◆ If no nontraditional contractor participates, 1/3 of cost paid by 

parties other than federal government or senior procurement 

executive justifies transaction.

– OT Guide for Prototype Projects, January 2001.
DAU PROGRAM MANAGERS TOOL KIT

39

CONTRACTOR PROFITABILITY RATIOS

The basic concept of profitability ratios is to measure net income against revenue or against 

the investment required to produce it. There are three principal profitability ratios with which you 

should be familiar. They are:

1. Return on Sales, which shows what percentage of dollars are left after the company 

has paid for all costs, interest, and taxes. It is expressed as:

Return on Sales = Net Income

 Sales 

2. Return on Total Assets, which looks at the efficiency with which management has used 

its resources, the company’s assets, to generate income. It is computed as:

ROA = Net Income

 Total Assets 

As noted, Return on Assets addresses how well management utilizes the assets of the firm in 

generating income. The ROA formula reflects the combined result of Return on Sales and the 

total asset turnover ratio (total sales/total assets), broken down as follows:

ROA = Net Income X Total Sales

 Total Sales Total Assets

3. Return on Stockholders’ Equity measures the rate of return on the owners’ 

investment—their equity in the company. This is also known as Return on Equity:

ROE = Net Income

 Stockholders’ Equity

ROE can also be broken into two components: return on assets and financial leverage (a ratio 

reflecting the relationship of creditor to owner financing—expressed as total assets/stockholders 

equity). This is shown by:

ROE = Net Income X Total Assets

 Total Assets Stockholders’ Equity

These profitability ratios give three different viewpoints concerning the “bottom line” on the income 

statement—how much net profit is being made on each sale, how much is being made for the 

assets that are employed, and how much is being made for the company owners. Contractor 

profitability ratios for the aerospace/defense industry for the period of 1980 to date are shown 

on page 38.

From an owner’s perspective, another profitability ratio you may be aware of is Earnings Per 

Share:

EPS = 

LEGEND:

EPS—Earnings Per Share ROA—Return on Assets ROE—Return on Equity

Net Income

Number of Shares of Common Stock Outstanding
DAU PROGRAM MANAGERS TOOL KIT

40

AEROSPACE/DEFENSE INDUSTRY 

CONTRACTOR PROFITABILITY RATIOS

Return Asset Return Financial Return

On Sales Turnover On Assets Leverage On Equity

(NI/S) (S/TA) (NI/TA) (TA/SE) (NI/SE)

1980 4.3 1.21 5.2 3.08 16.0

1981 4.4 1.18 5.2 3.06 16.0

1982 3.3 1.12 3.7 3.24 12.0

1983 3.5 1.17 4.1 2.98 12.1

1984 4.1 1.15 4.7 3.00 14.1

1985 3.1 1.13 3.6 3.17 11.1

1986 2.8 1.07 3.1 3.13 9.4

1987 4.1 1.07 4.4 3.32 14.6

1988 4.3 1.02 4.4 3.39 14.9

1989 3.3 1.00 3.3 3.24 10.7

1990 3.4 1.00 3.4 3.38 11.5

1991 1.8 1.06 1.9 3.21 6.1

1992 -1.4 0.86 -1.2 4.33 -5.2

1993 3.6 0.97 3.5 3.80 13.2

1994 4.7 0.92 4.3 3.44 14.8

1995 3.8 0.92 3.5 3.17 11.1

1996 5.6 0.91 5.1 3.35 17.1

1997 5.2 0.92 4.8 3.60 17.3

1998 5.0 0.96 4.8 3.73 18.0

1999 6.5 0.95 6.2 3.52 21.8

2000 4.7 0.91 4.3 3.30 14.2

2001 3.9 0.92 3.6 3.22 11.6

2002 4.1 0.90 3.7 3.16 11.7

2003 3.1 0.84 2.6 3.81 9.9

 AVERAGE 3.8 1.0 3.8 3.4 12.7

Source: Aerospace Industries Association. 

LEGEND:

NI/S—Net Income/Sales

NI/SE—Net Income/Stockholders’ Equity

NI/TA—Net Income/Total Assets

S/TA—Sales/Total Assets

TA/SE—Total Assets/Stockholders’ Equity

Aerospace/Defense Industry Contractor

Profitability Ratios
DAU PROGRAM MANAGERS TOOL KIT

41

LOCKHEED MARTIN CORP.—DUPONT FORMULA ANALYSIS (AN EXAMPLE)

XX

==

4.00%3.00%2.00%1.00%0.00%

-1.00%-2.00%-3.00%-4.00%-5.00%

Return on Sales (%)

(Net Income/Sales) 

1999 2002 2003 2000 2001

5.00%4.00%3.00%2.00%1.00%0.00%

-1.00%-2.00%-3.00%-4.00%-5.00%

Return on Assets (%)

(Net Income/Total Assets)

1999 2002 2003 2000 2001

5.0004.5004.0003.5003.0002.5002.0001.5001.0000.5000.000

Financial Leverage

(Total Assets/Shareholder Equity) 

1999 2000 2001 2002 2003

5.00%4.00%3.00%2.00%1.00%0.00%

-1.00%-2.00%-3.00%-4.00%-5.00%

Return on Assets (%)

(Net Income/Total Assets)

1999 2002 2003 2000 2001

Fiscal

Year

Total Asset

Turnover

Return 

on Assets % 

Financial

Leverage

Return

on Equity 

%

Return on

Sales 

% =

X X 4.757 =

X = X 4.249 =

X = X 4.301 =

X X 4.600 =

1999

2000

2001

2002

2003

1.53%

-2.11%

-4.36%

1.88%

3.31% X

0.826

0.807

0.866

0.985

1.216

1.26%

-1.71%

-3.77%

1.85%

4.02%

1.26%

-1.71%

-3.77%

1.85%

4.02% X 3.874 =

6.01%

7.25%

-16.23%

8.53%

15.59%

Return 

on Assets % X =

=

=

=

X

20.00%15.00%11.00%10.00%

5.00%0.00%

-5.00%

-10.00%-15.00%-20.00%

Return on Equity (%)

(Net Income/Shareholder Equity)

1999 2002 2003 2001 2000

1.41.21.00.80.60.40.2

0

Total Asset Turnover

(Sales/Total Assets) 

1999 2000 2001 2002 2003
DAU PROGRAM MANAGERS TOOL KIT

42

CASH CYCLE

CONTRACTOR FINANCING AND PAYMENTS

— Delivery 

*Internal Contractor Financing — Retained Earnings

— Govt. specified 

— Offer or proposal 

— Interim 

— Advance 

— Private

•	 Trade Credit

•	 Bank Credit

— Revolving Credit 

— Term Loan 

— Government

•	 For Noncommercial

— Progress Payments

•	 Performance-based

•	 Cost Incurred-based

•	 % Complete

–Unusual Progress 

Payments 

–Assignment of Claims 

–Guaranteed Loans 

–Advance Payments 

— Periodic

— Partial

FINANCING (External*) PAYMENTS

Commercial Noncommercial Commercial Noncommercial

Cash

received

Accounts

receivable

Sale

(DD 250) Finished goods

inventory

Raw material

inventory

Contract

award

Cash

disbursed

Cash

disbursed

Wages

payable

Work in process

inventory

Accounts

payable
DAU PROGRAM MANAGERS TOOL KIT

43

DIRECT AND INDIRECT COSTS

ASSIGNING INDIRECT COSTS

Indirect costs are

assigned to 

contracts using

indirect rate(s).

(Traced directly)

(Traced directly) Direct

material

Direct 

labor 

Contract

Calculation of Indirect Rates

Note: See DAU Indirect-Cost Management Guide at

<www.dau.mil/pubs/gdbks/icmguide.asp>.

INDIRECT RATE = Indirect Cost Pool

Allocation Base

Indirect costs

• Costs that can’t be traced

to a single contract

because they are 

associated with

multiple contracts

• Example: Electricity for 

the company’s facilities

Direct costs

• Costs that can be

 traced to a single 

 contract

• Examples: material

and labor to assemble

an aircraft
DAU PROGRAM MANAGERS TOOL KIT

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LIFE CYCLE OF INDIRECT COST RATES

BIDDING ON

CONTRACTS

ADJUSTING

PAYMENT AND

CLOSING

CONTRACTS

PAYING

CONTRACTS

FORWARD 

PRICING 

RATES

BILLING 

RATES

ACTUAL

RATES

Direct material $ 40,000

Material handling 10% 4,000

Direct engineering labor 6,000

Engineering overhead 100% 6,000

Direct manufacturing labor 12,000

Manufacturing overhead 150% 18,000

Other direct costs 6,000

Subtotal 92,000

General and administrative 25% 23,000

Total cost 115,000

Profit 15% 17,250

Cost of money for facilities capital 1,500

Price $133,750

CONTRACTOR’S COST PROPOSAL

EXAMPLE
DAU PROGRAM MANAGERS TOOL KIT

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CONTRACTOR BUSINESS PLANNING

PROCESS OUTPUTS

MANPOWER PLAN

Rates

for

Estimating

SALES

ANNUAL 

OPERATING PLAN

CAPITAL 

INVESTMENT PLAN

PRODUCTION AND

ENGINEERING PLAN

MASTER DELIVERY 

SCHEDULE

IR&D/B&P PLAN

TOP MANAGEMENT 

GOALS, OBJECTIVES, 

STRATEGIES

OVERHEAD 

FORECAST

BUSINESS BASE 

SALES FORECAST

$ $

TREND

LEGEND:

B&P—Bid of Proposal

IR&D—Independent Research and Development
DAU PROGRAM MANAGERS TOOL KIT

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LIFE CYCLE LOGISTICS

The planning, development, implementation, and management 

of a comprehensive, affordable, and effective product support 

strategy, within Total Life Cycle Systems Management. Life Cycle 

Logistics encompasses the entire system’s life cycle, including

acquisition (design, develop, test, produce, and deploy), sustainment 

(operations and support), and disposal.

PRINCIPAL LIFE CYCLE LOGISTICS 

GOALS/OBJECTIVES

•	 Goal 1: Define supportability objectives and establish life cycle

sustainment metrics. 

•	 Goal 2: Influence system design for affordable system operational

effectiveness. 

•	 Goal 3: Design and develop the support system utilizing

performance-based life cycle product support. 

•	 Goal 4: Acquire and deploy efficient and effective product support

to maintain the readiness and operational capability of the system. 

•	 Goal 5: Continuously improve readiness and affordability through

enhanced life cycle management.

GOAL 1: LIFE CYCLE SUSTAINMENT METRICS

Availability Key Performance Parameter (KPP) consists of two components:

 

Materiel Availability Operational Availability

Materiel Availability: 

•	 Development of the Materiel Availability metric is a Program

Manager responsibility 

•	 Addresses the total population of end

items planned for operational use

•	 A measure of the percentage of the

total inventory operationally capable of 

performing an assigned mission

•	 Formula: Number of End Items

Operational ÷ Total Population of End 

Items

Mean

Down

TimeMateriel Reliability

Materiel Availability

Ownership Cost
DAU PROGRAM MANAGERS TOOL KIT

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Operational Availability (Ao): 

•	 Development of the Operational Availability metric is a Requirements

Manager responsibility 

•	 Indicates the percentage of time that a system or group of systems

within a unit are operationally capable

•	 Formula: Uptime ÷ (Uptime + Downtime)

Reliability Key System Attribute (KSA)

•	 Development of the Reliability metric is a Requirements Manager

responsibility 

•	 Measure of the probability that system will perform without failure

over a specific interval

•	 Must support both Availability metrics

Ownership Cost Key System Attribute (KSA)

•	 Development of the Ownership Cost metric is a Program Manager

responsibility

•	 O&S value should cover the planned life cycle timeframe

•	 Balance to the sustainment solution by ensuring O&S costs are

considered

•	 Use the CAIG Cost Estimating Structure

Mean Downtime Sustainment Outcome Metric

•	 Average total Downtime required to restore an asset to its full

operational capabilities

•	 “Umbrella” metric that captures all causes of system Downtime

•	 Formula: Total Downtime for All Failures ÷ Total Number of Failures

Logistics

 Downtime

(LDT)

Corrective 

Maintenance Time Maintenance Time

(CMT)

Administrative

Delay Time

(ADT)

Preventive 

(PMT)

• Parts availability 

 “in the bin”

• Needed items

 awaiting 

 transportation

• Locating tools

• Setting up test 

 equipment

• Finding personnel

 (trained)

• Reviewing manuals

• Complying with

 supply procedures

• Preparation time

• Fault location time

• Getting parts

• Correcting fault

• Test and checkout

• Servicing

• Inspection

AO =

Standby

Time

Operating

Time

Uptime

Uptime + Downtime
DAU PROGRAM MANAGERS TOOL KIT

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GOAL 2: AFFORDABLE SYSTEM OPERATIONAL 

EFFECTIVENESS (SOE)

To achieve Affordable System Operational Effectiveness (SOE), 

the PM should design for the optimal balance between technical 

performance (including Reliability, Availability, and Maintainability 

(RAM)), categories of ownership cost, schedule, and process 

efficiencies. A development program that targets only some 

categories of technical performance capability; or fails to optimize 

system RAM technical performance, risks financial burden during 

operations and support. 

GOAL 3: DOD PRODUCT SUPPORT STRATEGY 

PROCESS MODEL

•	 A product support strategy encompasses the means by which defense system sustainment is to be accomplished. 

•	 The Life-Cycle Product Support Strategy Process Model represents

the major activities required to implement, manage, evaluate, and 

refine product support over the system life cycle. It is not a onetime process, but rather a continuing, iterative process in which the 

sustainment of a system (or systems) is adapted and evolved to 

optimally support the needs and requirements of the warfighter in an 

affordable and effective manner. 

Capabilities

Production

Operations

Life Cycle Cost/Total Ownership Cost

Product

Support

Public Private

Support

Infrastructure

Affordable

System

Operational

Effectiveness

Package Logistics

Maintenance

Support Features

Maintainability

Reliability

Effectiveness

Supportability

Process

Efficiency

Mission

Design

Technical

Performance

Functions
DAU PROGRAM MANAGERS TOOL KIT

49

12-Step Process Model

<https://acc.dau.mil/pbl>

GOAL 4: INTEGRATED PRODUCT SUPPORT 

ELEMENTS

(See next page for details)
DAU PROGRAM MANAGERS TOOL KIT

50

Product Support Management: Plan, manage, and fund weapon system product support across all Integrated Product Support (IPS)

Elements.

Design Interface: Design interface is the integration of the quantitative 

design characteristics of systems engineering (reliability, maintainability, etc.) with the functional logistics elements (i.e., integrated 

product support elements) described below.

Sustaining Engineering: Those technical tasks (engineering and logistics investigations and analyses) to ensure continued operation and 

maintenance of a system with managed (i.e., known) risk. 

 Supply Support: Management actions, procedures, and techniques 

necessary to determine requirements to acquire, catalog, receive, 

store, transfer, issue and dispose of spares, repair parts, and 

supplies. 

Maintenance Planning and Management: Establishes maintenance 

concepts and requirements for the life of the system for both hardware and software. 

Packaging, Handling, Storage, and Transportation (PHS&T): The 

combination of resources, processes, procedures, design, considerations, and methods to ensure that all system, equipment, and 

support items are preserved, packaged, handled, and transported 

properly. 

Technical Data: Represents recorded information of scientific or technical nature, regardless of form or character (such as equipment 

technical manuals and engineering drawings), engineering data, 

specifications, standards, and Data Item Descriptions (DID). 

Support Equipment: Consists of all equipment (mobile or fixed) required to support the operation and maintenance of a system. 

Training and Training Support: The policy, processes, procedures, 

techniques, Training Aids Devices Simulators and Simulations 

(TADSS), planning and provisioning for the training base including 

equipment to acquire, operate, maintain, and support a system. 

Manpower and Personnel: Involves the identification and acquisition of 

personnel (military and civilian) with the skills and grades required 

to operate, maintain, and support systems over their lifetime. 

Facilities and Infrastructure: Consists of the permanent and 

semi-permanent real property assets required to support a 

system, including studies to define types of facilities or facility 

improvements, location, space needs, environmental and security 

requirements, and equipment. 

Computer Resources: Encompass the facilities, hardware, software, 

documentation, manpower, and personnel needed to operate and 

support mission critical computer hardware/software systems. 
DAU PROGRAM MANAGERS TOOL KIT

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GOAL 5: PRODUCT SUPPORT BUSINESS MODEL 

(PSBM)

•	 The PSBM encompasses the overall strategy for product support

planning, implementation, management, and measurement over the 

life cycle of a weapon system component, subsystem, or platform.

•	 A Product Support Manager (PSM) will provide product support

subject matter expertise to the PM for execution of the PM’s

duties as the Total Life Cycle Systems Manager. This PSM will be 

designated as a key leadership position (KLP) for all Major Defense 

Acquisition Programs and designated a critical acquisition position 

(CAP) for all other major weapon systems. Product Support 

Integrators (PSIs) are charged with integrating all sources of product 

support, both public and private, defined within the scope of a 

product support arrangement.

Product Support Business Model 

(PSBM)

Recommendation:Adopt a “product support business model” that drives cost-effectiveperformance 

and capability for the warfighter across the weaponsystem life cycle and enables the most

advantageous use of an integrated defense industrial base.

ProductSupport Integrators

Warfighter

Program Manager (PM)

Product Support 

Manager (PSM)

Product Support Providers

Performance Based Agreement (PBA)

PBA / Partnering Agreement

Defined Performance Outcomes

Inherently

Governmental

Integrated

Industrial Base:

Commercial and 

Government

Accountability

Responsibility / Authority

PSI PSI PSI

Depots DLA ICPs OEMs DPO Tier X
DAU PROGRAM MANAGERS TOOL KIT

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THE SUSTAINMENT CHART

The “Sustainment Chart” is one tool the PM may use for key decision-making 

because it readily identifies a weapon system’s product support business

model and captures its operating and support costs and operational metrics 

data. PMs are required to use the sustainment chart to report status of sustainment planning at OIPT and DAB meetings.

LOGISTICS MANAGEMENT 

COMMUNITY OF PRACTICE (LOG COP) 

Transforming the Way We Work

Where YOU can ....

Find Helpful Tools and Templates

•	 Latest PBL Resources

•	 Supportability Best Practices

•	 Contracting Lessons Learned

Get Ahead In YOUR Career

•	 Logistics Training and Education

•	 Latest OSD Policy and Direction

•	 Logistics Conferences/Events

•	 Link to Top DoD Websites

Connect With Professionals

•	 Share Experiences and Ideas

•	 Start and Join Discussions	 

<http://acc.dau.mil/log>

•	 Locate DoD and Industry Experts 
DAU PROGRAM MANAGERS TOOL KIT

53

LIFE CYCLE LOGISTICS LINKAGE TO DEFENSE ACQUISITION PROCESS

Modifications &

Technology Insertion

Acquisition

Strategy

Support

Strategy

IOC

Sustainment Pre-Systems Acquisition

Produce Product

Produce

Support System

Readiness & Total

Ownership Cost

Objectives

PerformanceBased Logistics

(PBL)

Evaluate Alternative

Logistics

Concepts 

Support

Concepts

IOC

Systems Acquisition

SE Process SE Process

Evaluate

Product Support

Capabilities

Develop Initial

Product

Support Strategy

Product

Support Plan

Demo Product

Support

Capability

PBL & Product

Support

Implementation

PBL & Product

Support

Management

Operations/

Sustainment

Single Step or

Evolution to Full

Capability 

Demil &

Disposal

Demonstrate

Supportability

& Life Cycle

Affordability

Demonstrate

Supportability

& Life Cycle

Affordability

Inputs to:

• CDD • TEMP

• APB • Contract

FACTORY

CLOSED

Influence 

Design for 

Affordable SOE

Design Support 

System Utilizing 

Performance Based 

Life-Cycle Product 

Support

Post-Deployment

Support

Continuously 

Improve Readiness & 

Affordability

GOAL 5

GOAL 2Define Supportability Objectives/

Establish metrics

GOAL 1

GOAL 3

Post-Deployment

Evaluations

Acquire & Deploy

Supportable System

& Product Support

GOAL 4

USER NEEDS

PRODUCTION &

DEPLOYMENT

OPERATIONS & 

SUPPORT

ENGINEERING AND

MANUFACTURING DEVELOPMENT

FRP

Decision

Review

MATERIEL SOLUTION

ANALYSIS

Material

Development

Decision

Program

Initiation

TECHNOLOGY

 DEVELOPMENT

TECHNOLOGY OPPORTUNITIES & RESOURCES

Post-PDR

Assessment

Post-CDR

Assessment

LRIP & IOT&E SCMPD ISD

Life Cycle

Sustainment Disposal

A B C FOC
DAU PROGRAM MANAGERS TOOL KIT

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DEFENSE ACQUISITION GUIDEBOOK

LIFE CYCLE LOGISTICS

<https://acc.dau.mil/dag_5>

LIFE CYCLE LOGISTICS REFERENCES & GUIDANCE

•	 Defense Acquisition Guidebook (DAG) Chapter 5 - https://acc.dau.mil/dag_5

•	 DAU Logistics Community of Practice (LOG CoP) - https://acc.dau.mil/log

•	 Product Support Manager (PSM) Homepage - https://acc.dau.mil/psm

•	 PSM ACQuipedia Site - https://acc.dau.mil/CommunityBrowser.aspx?id=375980

•	 Performance Based Life Cycle Product Support (PBL) Toolkit - https://acc.dau.mil/pbl

•	 Life Cycle Sustainment Plan (LCSP) - https://acc.dau.mil/lcsp

•	 DoD Logistics Human Capital Strategy (HCS) - http://www.acq.osd.mil/log/sci/hcs.html

•	 Life Cycle Logistics ACQuipedia Repository - https://acquipedia.dau.mil/log_lcic.aspx

•	 Life Cycle Logistics Blog - https://dap.dau.mil/career/log/blogs/default.aspx

•	 Recommended Reading List - https://acc.dau.mil/CommunityBrowser.

aspx?id=383460

•	 Logistics Career Field Gateway - https://dap.dau.mil/career/log

•	 DAU Life Cycle Logistics Media Library - http://www.dau.mil/mpi/default.html

•	 Integrated Defense AT&L Life Cycle Framework Chart - https://ilc.dau.mil/

•	 Army Life Cycle Logistics Framework Chart - https://acc.dau.mil/logsa

•	 Joint Life Cycle Logistics Framework Chart - Will be posted on the LOG CoP

• Product Support Manager’s (PSM) Guidebook - Will be posted on the LOG CoP 

•	 Business Case Analysis (BCA) Guidebook - Will be posted on the LOG CoP

•	 Life Cycle Logistics Guidebook - Will be posted on the LOG CoP 
DAU PROGRAM MANAGERS TOOL KIT

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“Pure” Product Structure

PROGRAM OFFICE ORGANIZATION STRUCTURES 

(Examples)

“Traditional” or Functional Structure

Note: Functional divisions shown are notional.

PM

Staff

Engineering Logistics Production Business/

Finance Staff

Note: Functional divisions shown are notional.

Staff

Engr

Functional

Divisions

Engr Log Bus

Functional

Divisions

Engr Log Bus

Functional

Divisions

Log Bus

Staff Staff

Product/

Project

Manager

System A

Product/

Project

Manager

System B

Product/

Project

Manager

System C

PM

LEGEND: 

Engr—Engineering Log—Logistics Bus—Business
DAU PROGRAM MANAGERS TOOL KIT

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PROGRAM OFFICE ORGANIZATION STRUCTURES 

(Continued)

PM

Staff

PM

Program A

Component Head

Engineering Logistics Production Bus/Fin

PM

Program B

PM

Program C

NOTE: Functional divisions shown are notional.

Staff

Staff

Functional Directors 

DPM

Program Manager

APMs Log Eng Test Prod Bus/Fin Contracts

Primary 

Vehicle Logistics SystemsEngineering

Test & 

Evaluation

Frame Engine/Drive

Train

Suspension 

& Steering

Fire

Control

Level 1

IPT

Level 2

IPTs

Level 3

IPTs

Note 1

NOTE 1: Functional titles shown are notional.

Note 2

NOTE 2: IPTs often align with WBS elements.

Matrix Structure

Integrated Product Teams
DAU PROGRAM MANAGERS TOOL KIT

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THE ROLE OF MANUFACTURING IN THE 

ACQUISITION PROCESS

•	 Unstable requirements/engineering changes

•	 Unstable production rates and quantities

•	 Insufficient process proofing

•	 Insufficient materials characterization

•	 Changes in proven materials, processes, subcontractors,

vendors, components

•	 Producibility

•	 Configuration management

•	 Subcontractor management

•	 Special tooling

•	 Special test equipment

COMMON PRODUCTION RISKS THAT GREATLY 

IMPACT COST, SCHEDULE, AND PERFORMANCE

SUSTAINMENT

FULL

RATE MSA TD LRIP DEMONSTRATION

 INTEGRATION

A B C

•	 Execute the Manufacturing Plan

	 –Reflect Design Intent

	 –Repeatable Processes

•	 Continuous Process Improvement

PRODUCTION

•	 Influence the Design

Process

•	 Prepare for Production

RDT&E

• Manufacturing processes have

been demonstrated in a pilot line 

environment

•	 No significant manufacturing risks

EMD EXIT REQUIREMENTS

CURRENT DoD 5000 PROCESS

•	 Uniform, Defect-Free

Product

•	 Consistent Performance

•	 Lower Cost

NET RESULT
DAU PROGRAM MANAGERS TOOL KIT

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PRODUCIBILITY

DEFINITION:

The measure of relative ease of manufacturing a product. The product 

should be easily and economically fabricated, assembled, inspected, 

and tested with high quality on the first attempt that meets performance thresholds.

PRODUCIBILITY ISSUES:

•	 Design engineering, NOT manufacturing, is the technical group

responsible for producibility. Program offices and design engineers 

often dislike producibility because it usually requires performance 

functionality sacrifices (especially if cost is a set value, i.e., CAIV).

•	 Many design engineers do not have proper training or experience in

designing for producibility. Manufacturing facilities must be explicitly 

recognized as a major design constraint. This includes process 

capabilities and rate capabilities at each facility.

The PM is responsible for Producibility

Producibility

(see Defense Acquisition Guidebook)

•	 Producibility: degree to which system design facilitates timely, affordable, optimum-quality manufacture, assembly, and delivery of system.

•	 Producible system design should be a development priority.

•	 Design engineering efforts concurrently develop:

— Producible and testable design;

— Capable manufacturing processes; and

— Necessary process controls to:

u Meet requirements, and

u Minimize manufacturing costs.

•	 PM should use existing manufacturing processes whenever possible.

•	 When design requires new manufacturing capabilities, PM needs to

consider process flexibility (e.g., rate and configuration insensitivity).

•	 Full-rate production necessitates:

— Stable systems design;

— Proven manufacturing processes; and

— Available production facilities and equipment.
DAU PROGRAM MANAGERS TOOL KIT

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Quality Management Systems

(see Defense Acquisition Guidebook)

•	 The PM should allow contractors to define and use their preferred 

quality management system that meets required program support 

capabilities. 

•	 The PM will not require International Standards Organization

(ISO) registration of a supplier’s quality system since there have

been instances where ISO 9001-registered supplier products were 

deficient or life-threatening.

•	 Contractor’s quality management system should be capable of the

following key activities: 

–	Monitor, measure, analyze, control, and improve processes;

–	Reduce product variation;

–	Measure/verify product conformity;

–	Establish mechanisms for field product performance feedback; and

–	Implement an effective root-cause analysis and corrective action

system.

NOTES: ISO 9000 Series International Quality Standard is considered a Basic Quality system, but the 

focus is still on “Document what you do. Do what you document.” 

Advanced Quality Systems (AQS), such as the new SAE AS9100B Aerospace industries’ quality standard, 

focus on achieving customer satisfaction via use of key characteristics identification and control, variation 

reduction of key characteristics, flow-down of similar process control requirements to suppliers, and many 

other advanced process-oriented control and improvement techniques.

Key Characteristics and Variation Reduction

GOAL—Minimize and control variation on both key product characteristics and corresponding key manufacturing process characteristics: 

•	 Key Characteristics: The features of a material, process, or

part whose variation has a significant influence on product fit, 

performance, service life, or manufacturability—per SAE AS9100B. 

•	 Major Sources of Variation: Insufficient design margins, process

(manpower, machinery, methods, etc.), measurement systems, 

supplier’s products. 

WHY: Direct correlation between deviation from nominal value (i.e., 

variation) on key characteristics and product quality and functionality. 

TOOLS: Quality Function Deployment (QFD), Design of Experiments 

(DOE), Statistical Process Control. (See control chart on next page.), 

Continuous Process Improvement (CPI)/Lean Six Sigma (LSS) Program.
DAU PROGRAM MANAGERS TOOL KIT

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Key Characteristics and Variation Reduction (Continued)

The (X bar) and R Control Charts are used to monitor manufacturing processes. Upper 

or Lower Control Limits (UCL or LCL) are NOT design specification parameters. Instead, 

they are predicted boundaries for stable processes, calculated using (X double bar) 

(average of sampled process Means), (R Bar) (the average of the sample Ranges, which 

are the spreads between extreme values per sample), plus the selected data sample size 

and process-keyed statistical formulas. Values outside the UCL and/or LCL indicate possible 

process instability, likely due to uncommon “special” causes of variation. 

Caution: A process in control is desirable because it is predictable, yet it could fail to meet 

design requirements due to inherent “common” variation and/or because the process 

average isn’t centered on the design nominal value.

Reference: The Memory JoggerTM II; ©1994 by GOAL/QPC.

UCL

R (Control Chart)*

UCL

LCL

.40

.30

.20

.10

.90

.85

.80

.75

.70

.65

.60

.55

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

X (Control Chart)

R =

.178

–

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

X

=

*Note: No lower control limit for R chart for sample size below 7.

–
DAU PROGRAM MANAGERS TOOL KIT

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Production Readiness Review (PRR)

WHY WE DO THEM

•	 Risk Management Tool: Identify program risks and issues and opportunities early and often

(small, incremental, proactive vice big, single, reactive). 

•	 Assess capability of contractor (and subcontractor) to deliver a product on time and within cost

that meets performance and quality requirements.

•	 Assess actual contractor performance (metrics).

•	 Assess effectiveness of contractor’s corrective/preventative actions.

•	 Measure improvement of contractor’s performance.

HOW TO DO THEM

•	 Write a charter that the program office and contractor both understand.

•	 Coordinate with the Defense Contract Management Agency (DCMA)—use their capability.

•	 Establish areas of assessment with metrics:

— Producibility;

— Engineering Change Orders (ECO)/design stability;

— Manufacturing process control (key characteristics);

— Cost, time of scrap, rework, and repair;

— Tooling status; and

— Subcontractor management (same metrics as listed above).

•	 Ask questions, touch things, talk to shop floor workers:

—See what is actually happening on the factory floor rather than the conference 

room, i.e., go see and talk to the people doing the work.

WHEN TO DO THEM

•	 Early and often (see Defense Acquisition Guidebook, 4.3.3.9.3, Production Readiness Reviews).

•	 Concurrently with other technical reviews, such as the System Functional Review (SFR),

Preliminary Design Review (PDR), and the Critical Design Review (CDR).

•	 In Systems Integration and Systems Demonstration.

•	 “Final” PRR occurs at end of Systems Demonstration (before Milestone C).

•	 PRRs should be held in LRIP and beyond IF major changes (to design, manufacturing

processes, rates/quantities, etc.) occur during LRIP.

Additional Manufacturing Information Sources

•	 DAU’s Production, Quality and Manufacturing Information Website: 

— Go to <www.dau.mil>; select Knowledge Sharing; select Acquisition Community Connection; 

then see Participate in a Community; and select Production, Quality and Manufacturing. 

— Contains references to subjects including DoD Manufacturing Requirements, and Best 

Business Practices, such as Lean Enterprise, e-Commerce, Six Sigma, Basic and 

Advanced Quality Systems, Supply Chain Management, etc.

•	 Best Manufacturing Practices Center of Excellence—<www.bmpcoe.org>.

•	 Lean Aerospace Initiative (LAI)—<http://lean.mit.edu>.
DAU PROGRAM MANAGERS TOOL KIT

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TEST AND EVALUATION (T&E)—TYPES AND TASKS

T&E Required Before Going Beyond Low Rate Initial Production

• Production Qualification T&E—Verify design article meets spec/PM responsible; performed by contractor and/or Government/DPRO assistance valuable. Readiness for IOT&E.

•	Live Fire T&E (LFT&E)—Vulnerability and Lethality/Developmental Agency fund and 

execute. DOT&E oversight, approval, and Congressional reporting (LFTE Report) for 

ACAT I, II, and selected programs.

•	Initial Operational T&E (IOT&E)—Operational Effectiveness and Suitability/Independent Service OTA plan and manage. DOTE oversight, approval, and Congressional 

reporting (BLRIP Report) for ACAT I and selected systems.

Developmental T&E (DT&E)/Operational T&E (OT&E) Comparisons

OT&E

•	Operational effective/suitable

•	Operational Test Agency (OTA) responsible

•	“Typical” user personnel

•	Many test articles/each test

•	“Combat” environment/threats

•	“Production Rep” test articles

•	Contractor may not be allowed (IOT&E)

DT&E

•	Technical performance measurement

•	Developmental agency responsible (PM)

•	Technical personnel

•	Limited test articles/each test

•	Controlled environment

•	All types of test articles

•	Contractor involved

T&E Tasks and Events

Use Integrated DT/OT—Single integrated contractor/government DT and OT team;

shared test events and test data; independent data analysis and reporting.

ACAT I and II Programs—Require an independent, dedicated IOT&E to proceed beyond Low 

Rate Initial Production (LRIP).

Joint Interoperability Test Certification—All Information Technology and National Security 

Systems must be evaluated and certified by the Joint Interoperability Test Command (JITC) prior 

to (initial or updated) fielding, and periodically during their entire life - as a minimum, every four (4) 

years.

Models and Simulations Used Throughout the Acquisition Process

Test Requirements

• Test Interfaces

• Eval. Strategy

• Systems Engineering

• Design for Test

• S/W Human T&E

• TES/TEMP

• Subsystem T&E

• Software Only T&E

System DT&E

•	Computer Software

Configuration Item T&E

•	Reliability,Availability,

and Maintainability

• Supportability

• Interoperability

• Production Quality

• LF T&E

• Certificate of

Readiness for IOT&E 

 To support T&E during:

 Requirements Definition

 T&E Planning

 Engineering Design

 Fabrication

 Integration

 Systems DT&E

 OT&E

 Training

 Operations

System OT&E

• Effectiveness

• Suitability

	 •	Acceptance Test

	 • 	Manufacturing Test

•	Data Collection

	•	Reporting

PRODUCTION (PAT&E, PQT&E, FOT&E)

INTEGRATION AND TEST

(H/W IN THE LOOP)

OT&E: EOA, OA, IOT&E/OPEVAL

DEPLOY AND OPERATIONAL SUPPORT

FABRICATION AND TEST (BENCH, LAB)

REQUIREMENTS DEVELOPMENT

ENGINEERING DESIGN

DEVELOPMENT T&E: 

QUALIFICATION T&E, 

ACCEPTANCE T&E, LFT&E
DAU PROGRAM MANAGERS TOOL KIT

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What is a nomograph? A two-dimensional graphical representation 

of the cumulative binomial distribution. 

Why use nomograph? It enables a relatively simple solution to a 

complex mathematical calculation. 

What does it do? It allows you to calculate the performance of an 

item with associated statistical confidence. 

When do you use it?

•	 When your requirement includes a “Confidence Level” with a specific

level of performance. For example: THIS missile must hit THAT target 

90 percent of the time with 80 percent statistical confidence? 

• 	When the performance of an item under test can be characterized by

a binomial distribution.

What are the characteristics of a binomial distribution?

•	 Result of each event (firing) is an independent from other events.

•	 Probability of success of each event is constant.

•	 Each event results in a “success” or a “failure.” (In other words, there

are no points for being close; each event must be scored as a hit or a 

miss.)

What are some examples of binomially distributed events?

•	 Coin flip

•	 Missile launch

•	 Rocket firing

•	 Starting a car

BOTTOM LINE: Each of these test events must be graded as “pass” or 

“fail,” and you must determine the success criteria before the test begins.

The nomograph can be used (pre-test) as a test planning device to 

determine how many tests will be necessary to verify that specified 

performance has been met. The nomograph can also be used (posttest) to evaluate test data.

NOTE: There are two axes on the nomograph. One axis is the total number of trials. The other axis in the 

total number of failures. Additionally, the nomograph is non-linear.

TEST AND EVALUATION NOMOGRAPH
DAU PROGRAM MANAGERS TOOL KIT

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0.99

0.98

0.97

0.96

0.95

0.94

0.93

0.92

0.91

0.90

0.85

0.80

0.75

0.70

0.65

0.60

0.55

0.50

0.999

0.995

0.99

0.98

0.95

0.90

0.80

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.05

0.02

0.01

0.005

0.001

1000

700

500

400

300

200

140

100

70

50

40

30

20

10

5

2

0

NUMBER OF TRIALS OR SAMPLE SIZE (n)

FAILURES

(r)

1

2

3

4

5

7

9

RELIABILITY, R

CONFIDENCE LEVEL

How do you get a solution?

•	 From the data, determine the number of trials (total number of coin flips or missile shots, etc.) and locate the appropriate

line on the nomograph.

•	 Determine the number of failures and locate the appropriate line on the nomograph.

•	 Draw a point at the intersection of these two lines on the nomograph.

•	 Any straight line drawn through this point is a valid solution for the data set used.

For example:

•	 Requirement: Your missile must hit the target at least 90% of the time, with at least 80% confidence.

•	 Given: You fired 20 missiles with19 hits and 1 failure.

•	 What is the statistical confidence that you will have 90% success in the field with these missiles fired against THAT target?

Answer: 60% confidence.

•	 Did you meet the requirement? NO, you achieved only 60% confidence of hitting THAT target 90% of the time, and the

requirement was 80% confidence or better. One other way to look at the same data is to say that you did achieve 90% probability of success, but you only had 60% confidence in this result; either way you look at it, you did not meet the requirement.

NOTE: If you had fired 30 missiles and missed only 1 time, you would have achieved the 80% confidence along with the required 

90% performance level.
DAU PROGRAM MANAGERS TOOL KIT

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MODELING AND SIMULATION (M&S) PLANNING

Integrated Digital 

Environment (IDE) Planning

• Establish a business process

improvement team

• Identify high payback process

areas

• Identify potential legacy systems

and data repositories

• Identify user base, including

remote sites

• Capacity of PC workstations

• Bandwidth of communication lines

• Where servers are/will be located

• Identify legacy system host

platforms

HOW DO WE PLAN?—A NOTIONAL APPROACH

Simulation Support Plan (SSP) 

(Required by Army, Marine 

Corps, and Air Force)

• Access your service centers for M&S expertise

• Establish a simulation coordinating group; the EARLIER the better

• Design long-term M&S applications and the Integrated Digital Environment through 

the acquisition strategy, Test and Evaluation Management Plan (TEMP), Source 

Selection Plan (SSP)

• Create constructive, virtual, or live models and simulations

• CONTINUOUS PLANNING PROGRAM PLANNING 

 

 

TEST AND EVALUATION STRATEGY/TEMP

Modeling and Simulation (M&S)

Planning

• Identify high payback process areas

• Identify potential legacy systems,

Service/Joint-standard simulations,

architectures and data repositories

• Identify where user and simulators

are/will be located

• Determine capabilities and architectures 

of existing simulations

• Network bandwidth requirements

• IDE utilization opportunities

• Interoperability/interface/immersion 

requirements

• Required capability cap

• Design M&S architectures

• Establish a Simulation and Verification,

Validation, and Authentication (SVV&A)

planning process

• Establish long-term plan, budget,

document and implement

• Manage, update, and implement the 

SSP
DAU PROGRAM MANAGERS TOOL KIT

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HIERARCHY OF MODELS AND SIMULATIONS

 FUNCTIONS

RESOLUTION SUPPORTED MODELS AND SIMULATIONS FORCE OR SYSTEM LEVEL

Increasing

Resolution 

Actual 

Performance

Increasing 

Aggregation

Comparative 

Results

Test and

Evaluation

Operational Reqts. DevelopmentEffectiveness AnalysisTactics Development Mission Planning and Rehearsal

Design

Manufacturing

Cost

Support

Development

Tech Reqts. Dev.

Joint/Combined 

Forces

Air Wings Battle Groups 

Air Wing

EW A/C

AircraftSystem

Fire Control

Radar

Corps

Air Vehicle

(System/Subsystem/Component)

(One-on-One)

(Many-on-Many)

Theater/

Campaign

Mission/Battle

Engagement

Engineering

(Groups of Systems— 

Force Package)

The Hierarchical Aggregation of Models reduces fidelity 

significantly and must be evaluated—(PM, DIS, and DMSO)

LEGEND:DIS

—Distributed Interactive Simulation DMSO

—Defense Modeling and Simulation Office
DAU PROGRAM MANAGERS TOOL KIT

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THE EVOLUTION OF MODELING AND SIMULATION

Distributed 

Interactive 

Simulation 

(DIS)

Full 

System 

Prototypes

CAD 

CAM 

CAE

CADAM

SimulationBased Design

(Virtual 

Prototyping

with mfg. design,

risk/cost analyses,

mat’l. designation)

CONCEPT DEVELOPMENT

DEPLOYMENT AND SUPPORT

MANUFACTURING 

ENGINEERING DESIGN 

AND ANALYSIS INTEGRATED SYSTEM DATA

TEST AND 

EVALUATION

VIRTUAL PROTOTYPE

PHYSICAL MOCK-UP

FINAL PRODUCT 

Simulation-Based 

Acquisition 

The Advancing Computer and Communications Technology Revolutions
DAU PROGRAM MANAGERS TOOL KIT

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GANTT CHART

(Example)

Planned activity schedule

Status of activity

Forecast completion behind schedule

Forecast completion ahead of schedule

Activity

Preliminary Design

Design Analysis

Define Interfaces

Interface Specs

Preliminary Drawings

NOTE: There is no 

standard set of Gantt 

chart symbols.

Symbol Meaning Current

Date

J F M A M J J A S O

• Shows planned start and finish dates; may also show progress.

• Depicts activities as horizontal bars imposed over a time line.

• Primary strengths are simplicity and depicting overall project plan and status.

• Can show dependencies between activities (can be difficult to read as the

number of activities and dependencies between activities increases).

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Contract Award

IBR

SRR

PDR

CDR

Symbol Meaning

Activity

Planned event completion

Actual event completion

Actual completion behind schedule 

Forecast completion behind schedule

• Shows when key events are scheduled and when they are actually

accomplished.

• Primary strengths are simplicity and depicting information at the “big picture” level.

• Does not show progress related to events or dependencies between events.

MILESTONE CHART

(Example)

Current

Date
DAU PROGRAM MANAGERS TOOL KIT

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Network Schedules—General

•	Graphically portray dependencies and constraints among project activities

and the sequence in which the activities occur.

•	Allows managers to conduct a systematic, disciplined, and thorough review

of the activities required to complete the project.

•	Provides information about early and late start and finish times.

•	Used to determine the project’s critical path, and slack or float in schedule

activities.

•	Generally, there are two types of networks: Arrow Diagramming Method

(ADM) and Precedence Diagramming Method (PDM).

Arrow Diagramming Method (ADM)

•	Also known as Activity-on-Arrow (AOA); information about activities is shown 

above/below the arrows connecting events in the schedules. Events are 

usually shown as circles, squares, or rectangles (see following page).

•	ADM generally treats all relationships (see below) as finish-to-start (i.e., first

activity must finish before the next activity can start). 

•	ADM can show other relationships (e.g., start-to-start, finish-to-finish)

through the use of “dummy” activities.

Precedence Diagramming Method (PDM)

•	Also known as Activity-on-Node (AON); information about activities is shown

in/on the network nodes. Nodes are usually shown as squares or rectangles 

(see following page).

•	Lines connecting the nodes show the relationships between the activities.

•	PDM can show all forms of schedule relationships, including lead and lag

situations (see below).

Finish-to-Start.

Activity “A” must finish

before Activity “B” can

start.

Finish-to-Finish.

Activity “A” must finish

before Activity “B” can

finish.

A Start-to-Start.

Activity “A” must start

before Activity “B” can

start.

A Start-to-Finish.

Activity “A” must start

before Activity “B” can

finish. Rarely used.

B

B

A B

A

B

NETWORK SCHEDULES
DAU PROGRAM MANAGERS TOOL KIT

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NETWORK SCHEDULES (EXAMPLE)

Task ID Duration Predecessor

A 5 --

B 11 AC 12 AD 16 AE 8 BF 9 C, D

G 10 DH 12 E, F

I 10 G, H

J 5

Precedence Diagramming Method (PDM)

or

Activity-on-Node (AON)

Arrow Diagramming Method (ADM)*

or

Activity-on-Arrow (AOA)

*NOTE: Also sometimes referred to as Critical Path Method

(CPM) or Program Evaluation Review Technique (PERT)

Slack = LS – ES or LF – EF

Critical Path

Dummy ActivityTask ID (ES, EF)

Duration (LS, LF)

Task ID

Duration

F (18, 26)9 (18, 26)

H (27, 38)12 (27, 38)

E (17, 24)

8

(19, 26)

G

(22, 31)

10

(29, 38)

B

(6, 16)

11

(8, 18)

D

(6, 21)

16

(13, 28)

A (1, 5)5 (1, 5)

C (6, 17)12 (6, 17)

I (39, 48)10 (39, 48)

J (49, 53)5 (49, 53)

I

A

5

Legend

1 51 5

C

12

6 176 17

F

9

18 2618 26

H

12

I

10

J5

27 3827 38

B

11

6 16

8 18

D

16

6 21

13 28

E

8

17 2419 26

G

10

22 3129 38

39 48

39 48

49 5349 53

ES EF

LS LF

ES = Early StartEF = Early Finish

LS = Late StartLF = Late Finish

Legend

ES = Early StartEF = Early Finish

LS = Late Start

LF = Late Finish

Event Critical Path

NOTE 1: Task ID, Duration, and Predecessor info is

the same for both examples

NOTE 2: Eight-hour clock is used in both examples

NOTE 1

NOTE 2NOTE 2
DAU PROGRAM MANAGERS TOOL KIT

71

EXAMPLES OF NETWORK SCHEDULING SOFTWARE

A5 days

B11 days

C12 days

D16 days

E8 days

F9 days

G10 days

H12 days

I10 days

J5 days

Critical Path

Gantt Chart View

NOTE: 

Network View

Task name, duration, and predecessor information is the same as in Network Schedule on the previous page.
DAU PROGRAM MANAGERS TOOL KIT

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SCHEDULE DEVELOPMENT

IMP PM

Pri Sys

IPT A

Sec Sys SE

IPT D H/W

IPT B IPT E S/W

IPT C IPT F

Program Org Structure

Intermediate Schedule

Master Schedule

Detailed Schedule

Detailed Schedule

Design Engineering

Integration

Assembly

Test and Evaluation

WBS

1.0

1.1

1.1.11.1.21.1.31.1.4

1.3

1.3.11.3.21.3.3

1.4

1.4.11.4.21.4.3

1.4.4

1.5

1.5.11.5.2

1.2

1.2.11.2.21.2.3

SOW,

Specs,

SEP, etc.

Work

Packages

Program

Requirements

Technical

Documents Program Plans

Resource

Planning

Schedules

Task

Lists

ICD,

CDD,

CPD,

etc.

S.E.

Process

IPT C IPT C IPT C IPT C IPT C

Track 1Track 2Track 3Track 4Track 5

Responsibility Matrix

Duration & Resource

Estimates

Network (Task Sequence)

Historical Data

SMEs
DAU PROGRAM MANAGERS TOOL KIT

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26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 0

WORKING DAYS PRIOR TO COMPLETION (LEAD TIME)

(SUBCONTRACT 

PART)

(PURCHASE PART)

(PURCHASE PART) (PURCHASE PART)

(SUBASSEMBLY “B”)

(SUBASSEMBLY

 “A”)

FINAL ASSEMBLY

(FABRICATED PART 

IN-HOUSE)

TEST SHIP

6

8 7 4

1

2

3 5

12 11 10

9

LEAD TIME CHART

(Use with “Line of Balance Technique” on next page.)
DAU PROGRAM MANAGERS TOOL KIT

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80

70

60

50

40

30

20

10

0

80

70

60

50

40

30

20

10

0

O D N F J A M J M J 2 1 4 3 5 6 7 9 8 10 11 21

SHTNOM ORTNOC PL ST IN O

08

07

06

05

04

03

02

01

0

denn la P

l a tu cA

62 25 42 23 22 21 02 19 18 17 16 15 14 13 12 11 1 8 9 0 5 6 7 1 2 3 4 0

N IOTCUDORP DAEL TIME RAHC T 22 KRO W TNO /MSYAD H

0 12

t ohspanS ni e imt 1: a M y

6

1

4 7 8

2

3 5 9

10 11

LINE OF BALANCE TECHNIQUE
DAU PROGRAM MANAGERS TOOL KIT

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•	 Every program must have an APB starting at program initiation (normally Milestone B).

•	 The APB reflects the threshold and objective values for a minimum number of cost,

schedule, and performance parameters that describe the program over its life cycle.

•	 Cost thresholds and objectives reflect major elements of life cycle cost (RDT&E,

procurement, PAUC, APUC, etc.). 

•	 Schedule thresholds and objectives reflect critical events (milestone decisions,

start of DT/OT, first flight, IOC, etc.). 

•	 Performance thresholds and objectives are key performance parameters (KPPs)

extracted verbatim from the CDD/CPD.

•	 The JROC requires KPPs for force protection, survivability, sustainment

(availability), net-ready, and KPPs traceable to the Joint Pub 3-0, Joint 

Operations.

•	 The MDA may add other significant performance parameters if necessary.

•	 The APB is signed by PM, PEO, and CAE, as appropriate, and approved by MDA.

ACQUISITION PROGRAM BASELINE

Key Performance Parameter (KPP)—An Example

Objective

Threshold

X

.85

.80

.75

.70

.65

(Prob)

Exit

Criteria

(.77)

Full-Rate Production

Current

Estimate*

Growth (Maturity) Curve

S

U

R

V

I

V

A

B

I

L

I

T

Y

Exit

Criteria

(.73)

*In this example, the current estimate falls below the threshold—this represents a baseline breach of 

performance.

Integrated

System Design

System Capability and 

Manufacturing Process

Demonstration

Low-Rate

Initial Production

MS B PCDRA MS C FRP DR

Baseline

Values

Engineering and

Manufacturing Development

Production and

Deployment Phase

LEGEND:

APB—Acquisition Program Baseline

APUC—Average Procurement Unit Cost

CAE—Component Acquisition Executive

CDD—Capabilities Design Document

CPD—Capabilities Production Document

DRR—Design Readiness Review

DT/OT—Development Test/Operational Test

FRP DR—Full-Rate Production Design Review

IOC—Initial Operational Capability 

JROC—Joint Requirements Oversight

Council 

MDA—Milestone Decision Authority

MS—Milestone

PAUC—Program Acquisition Unit Cost PCDRA— 

Post Critical Design Review

Assessment 

PEO—Program Executive Officer

PM—Program Manager

RDT&E—Research, Development, 

Test and Evaluation
DAU PROGRAM MANAGERS TOOL KIT

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TECHNICAL PERFORMANCE MEASUREMENT

The Concept

TECHNICAL 

PARAMETER 

VALUE

e.g.,

MTBF

Weight Fuel 

Consumption

Tolerance Band

Threshold

Planned 

 Value 

Current 

Estimate

Variation

Planned

 Profile

Achievement

 to date

Time (Milestones) 

}

1. ARE ALL VIABLE ALTERNATIVES BEING 

EXPLORED?

–	Is each alternative clearly defined?

–	Have the alternatives been

prescreened? How?

–	Are affordability limits established?

–	Can all of the screened-out

alternatives be defended?

2. ARE SELECTION CRITERIA IDENTIFIED?

–	Are all significant criteria identified?

–	Do the criteria discriminate among

alternatives? 

–	Are the criteria measurable?

–	Have the criteria been pre-approved?

3. IS THE CRITERIA WEIGHTING SYSTEM 

ACCEPTABLE?

–	Are rationales for criteria weights

explained?

–	Are criteria weights consistent with

guidance?

–	Are criteria weights consistently

distributed in the tree?

4. ARE UTILITY (SCORING) CRITERIA 

DETERMINED?

–	Is defensible rationale established for

each criterion?

–	Are criteria developed from operational

measures of effectiveness where 

possible?

–	Do all plans use the same numerical

scale?

–	Is the location of the “zero point”

explained?

5. ARE EVALUATION METHODS 

DOCUMENTED?

–	Are test data reliability estimates

(confidence levels) incorporated?

–	Are models validated? When? By whom?

6. HAS SENSITIVITY BEEN ESTIMATED?

–	Are error ranges carried through with

worst-on-worst case analysis?

–	Have the effects of changes in the utility

curve shapes been examined?

–	Have rationales for the limits been

developed?

PROGRAM MANAGER’S CHECKLIST FOR REVIEW 

OF TRADEOFF PLANNING AND STUDIES

Technical Performance Measurement is a graphical depiction of a product design assessment. It 

displays values derived from tests and future estimates of essential performance parameters. It forecasts the values to be achieved through the planned technical program effort, measures differences 

between achieved values and determines the impact of these differences on system effectiveness. In 

the DoD, TPMs are typically related in some way to Key Performance Parameters (KPPs).
DAU PROGRAM MANAGERS TOOL KIT

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A Process, Not an Event

Risk Identification

Risk Analysis

Risk

Tracking

Risk Mitigation

Planning

Risk Mitigation

Implementation

Root cause analysis

of the risks identified

ROOT CAUSE ANALYSIS

•	 Risk identification includes analysis to identify the root causes of the

risks identified.

•	 Root causes are identified by examining each WBS product and

process element in terms of the sources or areas of risk.

•	 An approach for identifying and compiling a list of root causes is to:

– list WBS product or process elements;

– examine each in terms of risk sources or areas;

– determine what could go wrong; and

– ask “why” multiple times until the source(s) is discovered.

•	 A common misconception and program office practice concerning

risk management root cause analysis is to identify and track 

issues (vice risks) and then manage the consequences (vice the 

root causes). Risks should not be confused with issues (realized 

risks). If a root cause is described in the past tense, the root cause 

has already occurred and is, therefore, an issue that needs to be 

resolved but not a risk!

DoD Risk Management Guide

August 2006

DOD RISK MANAGEMENT PROCESS MODEL
DAU PROGRAM MANAGERS TOOL KIT

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PrioritizedList

Avoid Transfer Assume

Quantify Some

Qualify All

Identify

Risk Mitigation—plan and implement

Analyzeprioritize/list Tracking

status toplan

Control

Plan for eachprogram byphase/evaluation

Mitigation Implementation through Integrated Product and Process Development (IPPD) 

Periodic

Update

Raw List

Update asneeded

Integrateinto Program Plans and Control Toolsas necessary

RISK MANAGEMENT PROCESS—DETAILS
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PROGRAM SUCCESS METRICS MODEL* SUMMARY

Colors:

 On Track, No/Minor Issues

 On Track, Significant Issues Off Track, Major Issues

Trends:

Up Arrow—Situation ImprovingDown Arrow—Situation DeterioratingSituation Stability—Number within parenthesis is the number of reporting periods that the item has been stable

PEO

XXX

COL, PM Date of Review: dd mmm yy Program Acrony

m

ACAT XX

Program Life Cycle Phase: ________

Program Success (2)

Contract EarnedValue Metrics (3) 

Program “

Program Parameter

Status (3) DoD Vision (2)

Transformation (2)

Testing Status (2)

Program Risk

Assessment (5)

Contractor Performance (2) 

Contractor Health (2) Fixed Price Performance (3)

Sustainability Risk

Assessment (3)

Joint (3)

Technical Maturity (3)

INTERNAL FACTORS/METRICS EXTERNAL FACTORS/METRICS

10

10

14

33

2228222

7.57.5

Industry (3)

International (3)

*Also known as Probability of Program Success (PoPS) Model; initially developed by Mr. John Higbee at the DAU. For more information on PoPS Model, go to https://acc.dau.mil/CommunityBrowser.aspx?id=24415. 

Manning

Program 

Resources

Army Secretariat

Program

Requirements (3) 

Budget

40 60

Program Scope

Evolution 

Interoperability (3)

Army Vision (4)

OSD (2)

Joint Staff (2)

Warfighter (4)

Program

Execution 20 20 20 15 Fit Capability Vision (2)

2592511

Congressional

100

”

25 Program Advocacy

Current Force (4)

Future Force

UH-60 MODEL SUMMARY CHART—AN EXAMPLE
DAU PROGRAM MANAGERS TOOL KIT

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WHAT IS SYSTEMS ENGINEERING?

Systems Engineering (SE) is an interdisciplinary approach encompassing 

the entire technical effort to evolve and verify an integrated and total life 

cycle balanced set of system, people, and process solutions that satisfy 

customer needs. SE is the integrating mechanism across the technical 

efforts related to the development, manufacturing, verification, deployment, 

operations, support, disposal of, and user training for systems and their 

life cycle processes; and SE develops technical information to support the 

program management decision-making process. (DoD definition)

SYSTEMS ENGINEERING PROCESSES

DoD SE Technical and Technical Management Processes:

Technical Processes: Stakeholder Requirements Definition, Requirements 

Analysis, Architecture Design, Implementation, Integration, Verification, Validation, 

Transition

Technical Management Processes: Decision Analysis, Technical Planning, 

Technical Assessment, Requirements Management, Risk Management, 

Configuration Management, Technical Data Management, Interface Management

SYSTEMS ENGINEERING POLICY IN DOD

(DoD 5000.1 and Encl 12, DoDI 5000.02)

•	 Manage acquisition programs through the application of a SE approach that

optimizes total system performance and minimizes total ownership costs. 

•	 SE Plans (SEPs) are required for each milestone review. SEPs

must describe the overall technical approach; key risks, processes, 

resources, metrics and performance incentives; the timing and content 

of technical reviews (TRs); and item unique identification (IUID) and 

reliability, availability, and maintainability (RAM) summaries.

•	 A lead or chief systems engineer is required at the program executive

officer (PEO) level and is responsible to the PEO for effective application 

of SE processes across the PEO portfolio.

•	 Called out for special emphasis are:

—TRs: Event driven and meeting SEP entrance criteria;

—Configuration management: Required across the life cycle; PM takes 

control of product baseline after critical design review;

—Environment, safety and occupational health: Required to be

integrated into SE processes;

—Corrosion prevention, and control: ACAT I programs require formal plan; 

—A modular, open-systems approach shall be employed, where feasible;

—Data management strategy: Required for all ACAT I and II programs;

—IUID: An implementation plan is required; and

—RAM: A strategy is required to include reliability growth program.
DAU PROGRAM MANAGERS TOOL KIT

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SYSTEMS ENGINEERING PROCESS—TECHNICAL MANAGEMENT PROCESSES

Technical

Planning

Requirements

Management

Configuration

Management

Risk

Management

Interface

Management

Data

Management

Technical

Assessment

Decision

Analysis

Stakeholder

Requirements

Definition

Requirements

Analysis

Architecture

Design

Implementation

Transition

Validation

Verification

Integration

Realization

Processes

Design Processes
DAU PROGRAM MANAGERS TOOL KIT

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DEFENSE ACQUISITION MANAGEMENT SYSTEM—TECHNICAL “V” ACTIVITIES

Technical Activity “V” for Each Phase

Pre-Systems Acquisition

User Needs

Production &

Deployment

Operations & 

Support

Engineering and

Manufacturing Development

FRP

Decision

Review

Systems Acquisition Sustainment

Materiel Solution

Analysis

Materiel

Development

Decision

Program

Initiation

Technology

 Development

Technology Opportunities & Resources

A B C

Post-PDR

Assessment

Post-CDR

Assessment

LRIP & IOT&E SCMPD ISD

Life Cycle

Sustainment Disposal

IOC FOC

LEGEND:

CDR—Critical Design Review

FOC—Full Operational Capability

FRP—Full-Rate Production

IOC—Initial Operational CapabilityIOT&E—Initial Operational Test and EvalISD—Integrated System Design

LRIP—Low-Rate Initial ProductionPDR—Preliminary Design ReviewSCMPD—System Capability and Manufacturing Process Demo
DAU PROGRAM MANAGERS TOOL KIT

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MATERIEL SOLUTION ANALYSIS PHASE 

SYSTEMS ENGINEERING (SE) ACTIVITIES

TECHNOLOGY DEVELOPMENT PHASE 

SE ACTIVITIES •System Allocated Baseline

•PDR Report

•Test Reports

•TEMP •SEP •PESHE •PPP •TRA

•NEPA Compliance Schedule

•Risk Assessment

•Validated Sys Support & Maint 

 Objectives & Requirements

•Inputs to: -CDD -ISP -STA -IBR

 -Acq Strategy

 -Affordability Assessment

 -Cost/Manpower Est.

Interpret User Needs,

Refine System

Performance Specs &

Environmental Constraints 

MTA

FMECA

FTA

LORA

RCM

Trades

Verification

Linkage

Linkage

Verification

Linkage

Verification

Linkage

Validation

Demo & Validate System

& Tech Maturity Versus

Defined User Needs &

Environmental Constraints

Design/Develop System Concepts,

i.e., Enabling/Critical Technologies,

Update Constraints, & 

Cost/Risk Drivers

•ICD and Draft CDD

•Approved Materiel Solution

•Exit Criteria

•Support and Maintenance

•Concepts and Technologies

•AoA •TDS

•T&E Strategy

•System Safety Analysis

Demo/Model

Integrated System Versus

Performance Spec

Demo Enabling/

Critical Technology

Components

Versus Plan

Decompose Functional

Definitions into Critical

Component Definition &

TechnologiesVerification Plan

Demo System &

Prototype

Functionality

Versus Plan

Evolve Functional

Performance Specs into

System Allocated Baseline

Trades

Trades

SRR

SFR

PDR

Interpret User Needs.

Analyze Operational

Capabilities &

Environmental Constraints

Develop System Perf

(& Constraints) Spec &

Enabling/Critical Tech &

Prototypes Verification Plan

Develop Functional

Definitions for Enabling/

Critical Tech/Prototypes &

Associated Verification Plan

Develop System Functional

Specs & Verification Plan to

Evolve System Functional

Baseline

ICD

AoA Plan

Exit Criteria

Alternative Maintenance & 

Logistics Concepts

Prelim Sys Spec

T&E Strategy

SEP

Support & Maintenance Concepts & Tech

Inputs to: -Draft CDD -TDS -AoA -Cost/Manpower Est.

Decompose Concept Performance

 into Functional Definition 

& Verification Objectives

Analyze/Assess

System Concept Versus

Functional Capabilities

Analyze/Assess Concepts 

Versus Defined User Needs & 

Environmental Constraints

Assess/Analyze Concept &

Verify System 

Concept’s Performance

Develop Component Concepts, i.e., 

Enabling/Critical Technologies, 

Constraints & Cost/Risk Drivers

Analyze/Assess

Enabling/Critical Components

Versus Capabilities

Decompose Concept Functional

 Definition into Component Concepts 

& Assessment Objectives

Develop Concept

Performance (& Constraints)

Definition & Verification Objectives

Interpret User Needs,

Analyze Operational Capabilities &

Environmental Constraints

INPUTS OUTPUTS

Trades

ITR ASR

Trades
DAU PROGRAM MANAGERS TOOL KIT

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ENGINEERING AND MANUFACTURING DEVELOPMENT PHASE SE ACTIVITIES

FCA

Demonstrate System to

Specified User Needs and

Environmental Constraints

CDR

Lighter blocks reflect technical efforts required

during EMD if PDR does not come prior toMilestone B.

SVR PRR

TRR

INPUTS

Interpret User Needs,

Refine System

Performance Specs &

Environmental Constraints 

Acquisition Strategy

Exit CriteriaSys Performance Spec

APB •CDD •STA •ISPSEP •TEMP •PESHE •PPP

NEPA Compliance Schedule

Risk AssessmentValidated Sys Support & Maint

Objectives & Requirements

Product Support Strategy

System Safety Analysis

OUTPUTS

Initial Product BaselineTest ReportsSEP •TRA •PESHE •TEMP

NEPA Compliance ScheduleElements of Product SupportRisk Assessment

Life Cycle SustainmentSystem Safety Analysis

Inputs to:

-CPD -STA -ISP -IBR-Cost/Manpower Est

Fabricate, Assemble,

Code to “Build-to”

Documentation

Integrated DT&E, LFT&E and

Verify Performance

Compliance to Specs 

Individual CI

Verification 

DT&E

System DT&E, LFT&E & OAs,

Verify System Functionality

and Constraints Compliance

to Specs

Evolve CI Functional

Specs into Product

(Build to) Documentation

& Inspection Plan

Develop System Functional

Specs & Verification Plan to

Evolve System Functional

Baseline

Evolve Functional

Performance Specs into

System Allocated Baseline

SFR

PDR

Verification

Linkage

Verification

Linkage

Trades Trades

Verification/

Validation

Linkage

Verification

Linkage

LEGEND:APB—Acq Program BaselineCDD—Capability Dev DocCDR—Critical Design ReviewCI—Configuration ItemCPD—Continuing Prof DevDT&E—Dev Test & EvalFCA—Functional Config AuditIBR—Integrated Baseline ReviewISP—Information Support PlanLFT&E—Live Fire Test & EvalNEPA—Nat’l Envir Policy Act

OA—Operational AssessmentPDR—Preliminary Design ReviewPESHE—Prog Envir, Safety &

 Occ Health EvalPPP—Program Protection PlanPRR—Production Readiness RevSEP—Systems Engineering PlanSFR—System Functional ReviewSTA—System Threat AssessmentSVR—System Verification ReviewTEMP—Test & Eval Master PlanTRR—Test Readiness Review
DAU PROGRAM MANAGERS TOOL KIT

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OPERATIONS AND SUPPORT PHASE

SE ACTIVITIES

PRODUCTION AND DEPLOYMENT PHASE

SE ACTIVITIES

Analyze Deficiencies to

Determine Corrective Actions

LFT&E

Report to

Congress

BLRIP

Report to

Congress 

Verify and Validate

Production Configuration

Independent IOT&E

OUTPUTS

•Production Baseline

•Test Reports

•TEMP •PESHE •SEP

•System Safety Analysis

•Input to:

 –Cost/Manpower Est

Full-Up System Level LFT&E

JITC Joint Interoperability

Test Certification 

Joint Interoperability

Certification Testing

Production Qualification Testing 

Verification/

Validation Linkage

AOTR OTRR

INPUTS

•Test Results

•Exit Criteria

•APB •CPD •SEP •TEMP

•Product Support Package

•PESHE

•System Safety Analysis

Modify Configuration

(Hardware/Software/Specs)

to Correct Deficiencies

PCA

INPUTS OUTPUTS

• Process Change—

Hardware/Support

• Materiel Change

Trades

• Service Use Data

• User Feedback

• SEP

Monitor and Collect

All Service Use Data

Analyze Data to

Determine Root Cause

Determine System 

Risk/Hazard Severity

Develop

Corrective Action

Implement and Field 

Assess Risk of

Improved System

Integrate and Test 

Corrective Action 

In-Service

Review

• Discrepancy Reports

• Failure Reports

• Data for In-Service Review

• Input to CDD for Next Increment

• Modifications/Upgrades to Fielded

 Systems

• SEP

Trades
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REQUIREMENTS (USER NEEDS) 

ANALYSIS QUESTIONS

• What are the reasons behind the system development?

• What are the customer expectations? How will they measure the 

performance of the system?

• Who are the users and how do they intend to use the product?

• What do the users expect of the product?

• What are their levels of expertise?

• With which environmental characteristics must the system comply?

• What are existing and planned interfaces?

• What functions will the system perform, expressed in customer 

language?

• What are the constraints—hardware, software, economic, 

procedural—with which the system must comply?

• What will be the final form of the product—model, prototype, mass 

production?

• Specific, Clear, and Unambiguous: Contains no vague terms.

• Understandable: Stated with sufficient detail in everyday 

language.

• Concise: Contains no unnecessary words.

• Consistent: Top-to-bottom consistency with identical usage of 

terms and conformance to standards.

• Achievable: Reflects a need for which a solution is technically 

feasible at affordable costs.

• Traceable: Ultimately traceable back to a higher-level or stakeholder 

requirement.

• Verifiable: Expressed in such a manner so that the requirement can 

be verified in an objective, preferably quantitative manner.

• Feasible: Can achieve, produce, and maintain the requirement. 

ATTRIBUTES OF A WELL-DEFINED

REQUIREMENT
DAU PROGRAM MANAGERS TOOL KIT

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X

F1

R1

F2 F3 FN

X

X

X X

X X

R2

R3

RN

• Customer Needs

• Tech Base

• Prior Systems Engineering Output

• Program Decision Requirements

• Budget

Stakeholder

Requirements

Definition

Do what? Functions

How well? Performance

Environment? Interfaces

ICD Req’ts Spec Req’ts

Implied Req’ts

Questions for Requirers

Technical

Management

Integration, Verification/Validation,T&E

Design Loop Requirements Loop

Architecture

Design

Requirements

Analysis

Implementation Physical

Architecture

TIMELINE

HI / LO

Baselines

Functional

(System) Allocated

(Perf)

Product

(Detail) Specifications

System

Item Perf Item Detail

Process

Material

TO

CRUISE

CLIMB

LAND DESCEND

CLIMB

CRUISE

LOITER

ATTACK

(67 min., 50 km range)

FLY

TAKEOFF CRUISE LAND

(2 min.) (60 min.,

50 km range)

(5 min.)

AIRCRAFT

AIR ENGINE COMMUNICATIONS

FRAME

• Analyze Functions

• Decompose Function

• Allocate Requirements

• Functional Acrhitecture

F1

F2

F3

FN

X X

X X

X

X X

HW1 HW2 SW1 SWN

• Technical Planning

• Requirements

 Management

• Configuration

 Management

• Decision Analysis

• Technical Assessment

• Risk Management

• Interface Management

• Data Management

SYSTEMS ENGINEERING 

DESIGN PROCESSES ILLUSTRATED
DAU PROGRAM MANAGERS TOOL KIT

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SPECIFICATION DEVELOPMENT AND TECHNICAL REVIEWS

IOC FOC A B

Production and

Deployment

B C PCDRA FRPDR

Material

Solution

Analysis

Engineering and 

Manufacturing Development

Integrated

System

Design

System

Capability and

Manufacturing

Process

Development

Pre-Systems Acquisition Systems Acquisition

Technology

Development

Operations and

Support

Sustainment

Disposal

FRP and

Deployment LRIP

Initial Capabilities

Document (ICD)

Capability Production

Document (CPD)

Capability Development

Document (CDD)

● Emphasis on evolutionary acquisition; spiral development (software only)● Technology development strategy: Approved by Milestone Decision Authority (MDA) at Milestone A● Systems Engineering Plan: Integrated with acquisition strategy and submitted for MDA approval

at each milestone review regardless of Acquisition Category (ACAT)

● Integrated Baseline Review (IBR) establishes the Performance Measurement Baseline (PMB) for Earned

Value Measurement (EVM). Program Managers use IBR throughout program when EVM required.

*Note: SFR and PDR before or after MS B. If they occur after MS B, functional and allocated baselines 

move to the right. A PDR before MS B is a statutory requirement for Major Defense Acquisition 

Programs (MDAPs).

[Initial] [Verified] [Final]

Item Performance Specification (Design-to)

System Performance Specification

Item Detailed Specification (Build-to)

Functional Baseline

Allocated Baseline

Product Baseline

SpecificationsConfiguration Baselines

Technical Reviews

and Audits Configuration Control Product Upgrades

 Planning for Disposal

SVR/

FCA/PRR

S/W Reviews

Sustainment

LEGEND:AOTR–Assessment of Operational Test Readiness

ASR–Alternative Systems ReviewCDR–Critical Design Review

FOC–Full Operational Capability

FCA–Functional Configuration Audit

FRR–Flight Readiness Review

FRPDR–Full-Rate Production Decision ReviewIBR–Integrated Baseline Review

IOC–Initial Operational CapabilityISR–In-Service Review

ITR–Initial Technical Review

LRIP–Low-Rate Initial Production

OTTR–Operational Test Readiness Review 

PCA–Physical Configuration Audit

PDR–Preliminary Design Review

PCDRA–Post-Critical Design Review

Assessment

PRR–Production Readiness Review

SFR–System Functional Review

SRR–System Requirements Review

SVR–System Verification Review

TRA–Technology Readiness Assessment

TRR–Test Readiness Review

ISR

SE Process

(Repeated in Each Phase)

Prototype

Tech. Reviews TRA TRA

PCA IBR OTTR AOTR IBR TRR CDR PDR* PDR SFR SRR ASR ITR IBR IBRSFR* PRR
DAU PROGRAM MANAGERS TOOL KIT

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SYSTEMS ENGINEERING TECHNICAL MANAGEMENT PROCESSES KEY QUESTIONS

HOW DO WE ESTABLISH INTEGRATED PLANS FOR THE EFFORT?HOW DO WE KNOW WHERE WE ARE IN THE EFFORT? HOW DO WE ENSURE THE SYSTEM WILL MEET STAKEHOLDER NEEDS?HOW DO WE AVOID ISSUES IMPACTING DEVELOPMENT?HOW DO WE IDENTIFY, MANAGE, AND CONTROL TECHNICAL BASELINES?HOW WILL DATA BE AVAILABLE WHEN NEEDED TO SUPPORT THE SYSTEM?HOW WILL THE SYSTEM COME TOGETHER MOST EFFECTIVELY?HOW WILL FORMAL AND INFORMAL TRADEOFFS BE BEST MADE?

TECHNICAL PLANNINGTECHNICAL ASSESSMENT*REQUIREMENTS MANAGEMENTRISK MANAGEMENTCONFIGURATION MANAGEMENT TECHNICAL DATA MANAGEMENTINTERFACE MANAGEMENTDECISION ANALYSIS

*Via Technical Reviews, Earned Value Management, Technical Performance Measurement
DAU PROGRAM MANAGERS TOOL KIT

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TECHNICAL REVIEW DEFINITIONS

Alternative Systems Review (ASR): The ASR assesses the 

preliminary materiel solutions that have been proposed and selects 

the one or more proposed materiel solution(s) that ultimately have the 

best potential to be developed into a cost-effective, affordable, and 

operationally effective and suitable system at an appropriate level of 

risk.

Critical Design Review (CDR): The CDR establishes the initial 

product baseline. A successful CDR is predicated on the 

determination that the subsystem requirements, subsystem detailed 

designs, results of peer reviews, and plans for test and evaluation 

form a satisfactory basis for proceeding into system implementation 

and integration. 

Flight Readiness Review (FRR): The FRR is a subset of the Test 

Readiness Review and is applicable only to aviation programs. The 

FRR assesses the readiness to initiate and conduct flight tests or 

flight operations. 

Initial Technical Review (ITR): The ITR is a multi-disciplined 

technical review held to ensure that a program’s technical baseline

is sufficiently rigorous to support a valid cost estimate as well as 

enable an independent assessment of that estimate.

In-Service Review (ISR): The ISR is held to ensure that the system 

under review is operationally employed with well-understood and 

managed risk. It provides an assessment of risk, readiness, technical 

status, and trends in a measurable form. These assessments help to 

substantiate in-service support budget priorities. 

Preliminary Design Review (PDR): The PDR establishes the 

allocated baseline (hardware, software, human/support systems). 

A successful PDR is predicated on the determination that the 

subsystem requirements; subsystem preliminary design; results of 

peer reviews; and plans for development, testing, and evaluation 

form a satisfactory basis for proceeding into detailed design and test 

procedure development.
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Production Readiness Review (PRR): The PRR examines a 

program to determine if the design is ready for production and if 

the prime contractor and major subcontractors have accomplished 

adequate production planning. The PRR determines if production or 

production preparations have unacceptable risks that might breach 

thresholds of schedule, performance, cost, or other established 

criteria. 

System Functional Review (SFR): The SFR is held to ensure that 

the system’s functional baseline has a reasonable expectation of

satisfying stakeholder requirements within the currently allocated 

budget and schedule.The SFR assesses whether the system’s

proposed functional definition is fully decomposed to its lower level, 

and that preliminary design can begin. 

System Requirements Review (SRR): The SRR assesses the 

system requirements as captured in the system specification and 

ensures that the system requirements are consistent with the 

approved materiel solution (including its support concept) as well as 

available technologies resulting from any prototyping efforts.

System Verification Review (SVR): The SVR is held to ensure the 

system under review can proceed into initial and full-rate production 

within cost (program budget), schedule (program schedule), 

risk, and other system constraints. The SVR assesses system 

functionality and determines if it meets the functional requirements 

as documented in the functional baseline. 

Test Readiness Review (TRR): The TRR is designed to ensure that 

the subsystem or system under review is ready to proceed into 

formal test. The TRR assesses test objectives, test methods and 

procedures, scope of tests, and safety; and it confirms that required 

test resources have been properly identified and coordinated to 

support planned tests. 
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TECHNICAL REVIEW BEST PRACTICES

Technical reviews:

•	 Are a fundamental part of the Systems Engineering Technical

Assessment Process for the program manager.

–	Should be event-based;

–	Objective entry and exit criteria need to be defined up front. See

the Defense Acquisition Guidebook (DAG) for general criteria and 

the program’s Systems Engineering Plan (SEP) for specific criteria;

–	Are only as good as those who conduct them;

–	Engagement of Technical Authority;

–	Chair independent of program team;

–	Independent subject-matter experts, determined by Chair; and

–	Involve all affected STAKEHOLDERS.

•	 Should review status of program development from a technical

perspective.

–	Involve all affected STAKEHOLDERS; and

–	Involves all technical products (e.g., specifications, baselines, risk

assessments, etc.) relevant to the review.

•	 System-level reviews should occur after the corresponding

subsystem level review!

NOTE: Check out DAU Continuous Learning Module CLE003 (Technical Reviews), which includes 

detailed tailored checklists for all key Technical Reviews. 

Easy in principle,

difficult in practice.
DAU PROGRAM MANAGERS TOOL KIT

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PROGRAM-UNIQUE SPECIFICATIONS

•	 Program-unique specifications advantages:

–	Helps avoid duplication and inconsistencies.

–	Enables good estimates of necessary work and resources.

–	Provides consistent communication among players as people 

rotate.

–	Can be used to prepare test plans.

–	Can be used a long time after the system has been put into 

operation.

–	Serves as an interface between customers, developers, and 

designers.

–	Can act as negotiation and reference document for engineering 

changes.

MIL-STD-961

Standard Performance Specification

Standard Design Specification 

Program-Unique Specifications. 

No waiver required to use

STD PRACTICE.

• Defines mission/technical performance 

requirements. Allocates requirements to 

functional areas. Defines interfaces.

• Defines performance characteristics of 

configuration items (form, fit, function). Details 

design requirements only to meet interfaces. 

“DESIGN-TO.”

• Includes “how to” and specific design

requirements. Usually includes specific 

processes and procedures. “BUILD-TO.”

• Defines process performed during fabrication.

• Defines production of raw materials or 

semi-fabricated material used in fabrication.

System

(Hardware or 

Software) Item

Performance

(Hardware or 

Software) Item

Detail

Process

Material

Functional

(“System”)

Allocated

(“Design-to”)

Product

(“Build-to”)

Product

Product

Specification Content Baseline

Specs
DAU PROGRAM MANAGERS TOOL KIT

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Design/Fab. Require desired Specify exact parts and

outcomes or functions; components

specific design to 

contractor

Processes Few, if any Specify exact processes

Physical Give specifics only for Specify more physical

Characteristics interfaces, environment, characteristics than

or human factors for interfaces,

environment, etc.

Interface Detailed interface data do Detailed interface data

Requirements NOT solely make a perf.

spec. a detail spec.

Materials Leave specifics to Require specific materials

contractor

Test and Evaluation State performance Prescribed testing 

need; contractor picks process

test procedure

PERFORMANCE DETAIL / DESIGN

PERFORMANCE vs. DETAIL SPECIFICATIONS

Two generic categories of program-unique specifications are performance specifications and detail specifications.

•	 Performance Specifications: States requirements in terms of 

the required results without stating the method for achieving the 

required results, functional and performance (what and how well), 

the environment in which product(s) must operate; interface and 

interchangeability characteristics, and criteria for verifying compliance.

•	 Detail Specifications: Specifies requirements in terms of material to 

be used; how a requirement is to be achieved; and how a product is 

to be assembled, integrated, fabricated, or constructed. Applicable 

to development of contractor final design drawings as well as items 

being built, coded, purchased, or reused.

•	 MIL-STD 961: Defense and program-unique specifications format 

and content establishes the format and content requirements for 

defense specifications and program-unique specifications prepared 

either by DoD activities or by contractors for the DoD.
DAU PROGRAM MANAGERS TOOL KIT

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CONFIGURATION MANAGEMENT

(Defense Acquisition Guidebook, MIL-HDBK-61A and 

ANSI/EIA Standard 649A) 

“A management process for establishing and maintaining consistency 

of a product’s performance, functional, and physical attributes with its 

requirements, design, and operational information throughout its life.”

• Identify and document the functional and physical characteristics of 

configuration items.

• Change Management: control changes to configuration items and their 

related documentation.

• Record (Status Accounting) and report information needed to manage 

configuration items effectively, including the status of proposed changes and 

implementation status of approved changes.

• Verification and Audit of configuration items to verify conformance to 

specifications, drawings, interface control documents, and other contract 

requirements.

CONFIGURATION MANAGEMENT PLANNING

• The decisions on 

– Which baselines the Government should eventually control

–	 The data needed

–	 When that control should be established

... are strategic management decisions that involve

–	 Acquisition strategies—sources, competition, etc.

–	 Logistics support plans—repair levels, data needs, open 

systems, etc.

–	 Technology insertion—stable vs. rapidly moving technologies, etc.

• Government should control the Functional Baseline (document system level 

requirements)

• By DoD policy, at the completion of the system level Critical Design Review 

(CDR), the PM shall assume control of the initial product baseline for all 

Class 1 configuration changes.
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INTERFACE MANAGEMENT

Will it all work together?

•	 The government PMO:

–	Identifies external interfaces

–	Establishes interface standards

(baselines)

–	Maintains interface stability

•	 The contractor:

–	Manages internal interfaces

–	Establishes interface requirements

to include internal and external 

interfaces

–	Controls interfaces to ensure

◆ Accountability

◆ Timely dissemination of changes

 

Since they are not under direct contractor control, 

the government plays a big role in managing external 

interfaces, leaving management and design details of 

internal system interfaces to the contractor. 

INTERFACE CONTROL CONCEPT

•	 Identifies, documents, and controls all functional and physical

characteristics

•	 Interfaces:

–	What? 

◆ Common boundary

◆ Types: mechanical, electrical, operational, software

◆ Functional and physical characteristics

–	Where?

◆ Within one contractor’s design

◆ Among contractor’s items and GFE

◆ Among multiple contractors’ items

◆ Among systems

–	Controlled by Interface Control Working Group

–	Documented in Interface Control Documents

?
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WORK BREAKDOWN STRUCTURE (WBS)

A WBS:

• Is a product-oriented family tree composed of hardware, software, 

services, data, and facilities. 

•	 Provides a consistent and visible framework for defense materiel

items and contracts within a program.

•	 Is an organized method to breakdown the system structure of a

product into subproducts at lower levels of detail.

•	 Can be expressed down to any level of interest. Generally, the top

three levels are sufficient unless the items identified are high cost or 

high risk. If so, then it is important to take the WBS to a lower level of 

definition.

•	 Key types of a WBS are a Program WBS and a Contract WBS

–	 Program WBS: encompasses an entire program, including the 

Contract WBS and “other government” elements (e.g., Program 

Office Operations, Manpower, GFE, government Testing). It 

defines at a high level what is to be procured and consists of at 

least three program levels with associated definitions.

–	 Contract WBS: the complete WBS as extended to the agreedto contract reporting level. It defines the lower level components 

of what is to be procured and includes all the product elements 

(hardware, software, data, or services), which are defined by 

the contractor and are their responsibility.

•	 MIL-HDBK-881A (Work Breakdown Structures for Defense Materiel

Items) should be consulted for developing Program and Contract 

WBS. It provides details on various types of defense systems as well 

as elements common to all defense systems.

–	 MIL-HDBK-881A Defense Systems: Aircraft Systems, 

Electronic/Automated Software Systems, Missile Systems, 

Ordnance Systems, Sea Systems, Space Systems, Surface 

Vehicle Systems, and Unmanned Air Vehicle Systems.

–	 MIL-HDBK-881A Common Elements: integration, 

assembly, test, and checkout, Systems Engineering, Program 

Management, training, data, System Test and Evaluation, 

peculiar and common support equipment, operational and site 

activation, industrial facilities, and initial spares and repair parts.
DAU PROGRAM MANAGERS TOOL KIT

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HOW TO CREATE A 

WORK BREAKDOWN STRUCTURE (WBS)

BASIC PURPOSES OF WBS

Sys Eng

System

Training Test Mfg

Computer Sensor

Crew

Simulator

HW

To Be

Determined

System

SW

Application

SW

Displays

Grouping for

Specification

Development

Interface

Earned Value Management

Evaluation

Risk

Assessment

$$$

Management

Product 

Tree

ECP

Impact

IPT

Setup

CAT Support

NOTE: Oval shapes on periphery 

identify WBS purposes

Tech Review

Structure

Appendix

A

B

C

MIL HDBK

881

System

Define 

the Product

Tailor

(Supporting Processes)

Create and Refine as 

Design Matures

SE Process
DAU PROGRAM MANAGERS TOOL KIT

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System

Requirements

Analysis

SR

R

SF

R

SS

R

PD

R

CD

R

TR

R

SR

R

SF

R

SS

R

PD

R

CD

R

TR

R

System

Design

Software

Requirements

Analysis

Software

Design

Software

Unit Coding

Software

Unit Testing

SW Unit Integration

and Testing

Syste

m

Sub-Syste

m

SW Ite

m

(SI)

SW Ite

m

(SI)

HW Ite

m

(HI)

SW Item

(SI)

Software

Units

Software

Units Software Units

Software Item

Qualification

Testing

HI and SI

Integration

and Testing

Sub-system

Integration

and Testing

System 

Qualification

Testing

DT and OT&E Testing

NOTE: SSR—Software Specification Review. The SSR is a unique sub-system

review held to assess SW requirements prior to start of design.

SOFTWARE DEVELOPMENT—TECHNICAL REVIEW RELATIONSHIPS
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SOFTWARE DEVELOPMENT—KEY LIFE CYCLE REVIEW FACTORS

R ev 3.1

Software Development

Key Factors

• Are requirements traceable to operational mission profiles?• Is top-level requirements allocation reasonable? Are software and hardware allocations realistic?• Has a software architecture been established? Is it reasonable?• Have realistic computer resource utilization limits been established?• Have communication and interface requirements been established?• Have critical requirements (safety, security, privacy) been specified?

Software Development

Key Factors

• Have software requirements been established? Are they prioritized? Are derived requirements understood?• Have conditions for software acceptance been established?• What modifications are needed as a  result of prototype testing?• What are reuse & COTS levels?• Are personnel, training, and support impacts understood?• What exception conditions/capacity limits have been taken into account?• Is the proposed lower-level break-out of software functionality reasonable?

• Do results of Detailed Design support subsequent coding and implementation activities?• Are interfaces specified in sufficient detail to support coding and implementation?• What systems are in place for software configuration management during Software Support?• How will changes be incorporated into the fielded software?• Do results of software tests to date verify performance, reliability, safety, security, and other critical requirements?

Software Development

Key Factors

Product

Baseline(s)

Allocated

Baseline(s)

Functional

Baseline

Initial Stage

Design & Review

Activities

ASR SRR

SFR

SSR 

 PDR

CDR TRR PRR

SVR PCA

Final Stage

Design & Review

Activities

Intermediate Stage

Design & Review

Activities
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CANDIDATE SOFTWARE MEASURES (METRICS)

•	 Software Size

•	 RequirementsVolatility

•	 Software Effort/Staffing

•	 Software Progress

•	 Problem/Change Report Status

•	 Rework/Scrap

•	 Computer Resource Utilization

•	 Milestone Performance

•	 Build/Release Content

•	 Software Complexity

•	 Effect of Reuse

•	 EarnedValue

Check out the handbooks at the “DoD’s Practical System and Software 

Measures” site at <www.psmsc.com>.

Software measures should 

be risk- or issue-driven and 

are phase-dependent.

QUALITY EVENTS FOR SOFTWARE

• Process-driven

• Test and integration planning key

• Includes qualification testing

• Software item/configuration item oriented

• White vs. black box testing

• Use specially trained teams

• Formal process

• Team attitude critical

• Rigid entry/exit criteria

• Basis for SW metrics

• Genesis for process improvement

• Around 70% defect removal

• Preparation critical

• Entrance/exit criteria key

• Frequently abridged

• High-level review

• May not be high-leverage, 

 SW-quality event

ComputerBased

Testing

Activities

Human-Based

Quality Activities

Spectrum of

Quality Events

for Software

Desk

Checking

Walk-throughs

Formal

Inspections

Joint

Reviews

• Ineffective

• Better than nothing

• Individually done

• May have defined procedures

• Team-oriented review

• Results may be recorded

• Around 40% defect removal
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SOFTWARE MANAGEMENT BEST PRACTICES

• Adopt continuous risk management

• Estimate cost and schedule empirically

• Use software metrics to help manage

• Track earned value

• Track software defects against software quality targets

• Treat people as the most important resource

• Use life cycle configuration management

• Manage and trace requirements

• Use system-based software design

• Ensure data and database interoperability

• Define and control interfaces

• Design twice, but code once

• Carefully assess reuse risks and costs

• Inspect requirements and design

• Manage testing as a continuous process

• Test frequently

• Use good systems engineering processes

SOFTWARE ACQUISITION WORST PRACTICES

• Use schedule compression to justify new technology on a timecritical project

• Have the government mandate technological solutions

• Specify implementation technology in the RFP

• Use as many “silver bullets” as possible

• Expect to recover more than 10% schedule slip without a reduction in

delivered functionality

• Put items out of project control on the critical path

• Plan on achieving more than 10% improvement from observed past

performance

• Bury as much of the project complexity as possible in the software as

opposed to the hardware

• Conduct critical system engineering tasks without software expertise

• Believe that formal reviews alone will provide an accurate picture of

the project

• Expect that the productivity of a formal review is directly proportional

to the number of attendees above five
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chapter 2

LEADERSHIP AND MANAGERIAL SKILLS

•	 More things that make you go “Hmmm?... ”

“An authority is a person who just happens to know the source.”

“A conservative is a person who believes nothing should be done 

the first time.”

“Diplomacy is the art of hearing all parties arguing in a dispute and 

nodding to all of them without ever agreeing with any of them.”

“The meeting raised our confidence that the contractor can actually 

accomplish the task and that it will occur in our lifetime.”

“This is the earliest I’ve been late.”

“The world would be a much better place if people weren’t allowed

to have children until they’ve proven they can successfully manage

a DoD program.”

“Everyone is bound to bear patiently the results of his/her own 

example.”

“The superior person is firm in the right way, and not merely firm.”

MANAGEMENT AND LEADERSHIP

Implement

Change

Staff Plan

Coordinate Monitor

& Control

Drive

Change

Set the

Direction

Align the

People

Energize

the People

Build

Relationships

Coach &

Mentor

Make Things Happen

Create and Nurture an Environment for Success

Demonstrate Integrity

MANAGEMENT

Do Things

Right

LEADERSHIP

Do the

Right Things

Organize

Program

Managers

Must

Balance

Both

Roles
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PROGRAM MANAGEMENT “DIAMOND CARD”

MANAGEMENT

•	 Logistics

•	 Production

•	 Contracting

•	 Requirements

•	 Vision

•	 Ethnics/Values

•	 Teambuilding

•	 Communication

•	 Leading Change

•	 Strategic Thinking

•	 Time Management

LEADERSHIP

•	 Cost Estimating

•	 Processes/Tools

•	 Systems Engineering

•	 Senior Steering

Groups

•	 Test & Evaluation

Management

•	 Risk/Funds/Software

Management

•	 Organization Design

•	 Expectation

Management

•	 Goals

•	 Strategy

•	 Rewards

•	 Partners

•	 Customers

•	 Environment

•	 Stakeholders

•	 Teams/People

•	 Relationship Building

Designed by Al Moseley, DAU SPM
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TECHNOLOGY READINESS LEVELS

9 Actual system “flight proven” through 

successful mission operations

8 Actual system completed and “flight 

qualified” through test and demonstration

7 System prototype demonstration in an 

operational environment

6 System/subsystem model or prototype 

demonstration in a relevant environment

5 Component and/or breadboard validation 

 in relevant environment

4 Component and/or breadboard validation 

 in laboratory environment

3 Analytical and experimental critical function 

and/or characteristic proof-of-concept

2 Technology concept and/or application 

formulated

1 Basic principles observed and reported

System Test, Flight

and Operations 

 

System/Subsystem

Development 

Technology

Demonstration 

 

Technology 

Development 

 

Research to Prove

Feasibility 

Basic Technology

Research

FRPDR

C

B

A

PROGRAM MANAGEMENT DIAMOND CARD (Continued)

NOTE: Technology Readiness Levels (TRL) enable consistent, uniform, discussions of technical maturity 

across different types of technologies. Decision authorities will consider the recommended TRLs when 

assessing program risk. TRLs are a measure of technical maturity. They do not discuss the probability of 

occurrence (i.e., the likelihood of attaining required maturity) or the impact of not achieving technology 

maturity. (Defense Acquisition Guidebook, Chapter 10)
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Reasons for Empowerment, Delegation, and Coaching

• Allows managers more time for managerial and leadership roles (e.g., longterm planning, coordinating ongoing activities, monitoring and controlling 

activities, and providing feedback to employees)

• Increases employee capability and motivation

• Enhances employee career growth

• Improves teamwork

• Maximizes limited resources

• Pushes responsibility and accountability further down in the organization

Steps for Empowerment, Delegation, and Coaching

1. Select the task or tasks to be assigned

2. Select the person or team; evaluate their current capabilities to complete 

the task or tasks

3. Provide training and/or coaching, if necessary, to improve their 

capabilities

4. Solicit input from the person or team regarding the task or tasks

5. Agree on the tasks, objectives, responsibility, authority, and deadline

6. Provide guidance, assistance, and support, as necessary

7. Establish metrics to measure progress

8. Monitor progress

9. Provide feedback

10. Identify lessons learned

11. Evaluate performance

EMPOWERMENT, DELEGATION, AND COACHING

EMPOWERMENT

Assigning an employee 

or team responsibility 

and authority to take 

actions and make 

decisions in pursuit 

of the organization’s

goals.

DELEGATION

Assigning an employee 

(usually a subordinate) 

a specific task or tasks 

to complete.

COACHING

Providing employees 

with the tools, 

knowledge, and 

opportunities they 

need to develop their 

potential and increase 

their effectiveness.

NOTE: Some people use “empowerment” and “delegation” interchangeably, while others see a subtle 

distinction, e.g., delegation often refers to an individual, while empowerment is usually associated 

with groups or teams. Empowerment usually includes more authority and freedom related to making 

decisions, and taking actions while delegation is usually more bounded.
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EMPOWERMENT, DELEGATION, AND COACHING 

(Continued)

Leaders should ensure the components shown above are present.

CapabilityS

knowledge, skills, 

experience

Direction

organizational values, 

vision, purpose, goals

Authority

the right to take actions 

necessary to meet goals

FreedomSS

able to take initiative within 

prescribed boundaries 

Trust

organizational values, 

vision, purpose, goals

Resources

materials, facilities, 

people, money, time, etc. 

SSInformation

access to and sharing of 

essential information

Responsibility

or assignment to complete a 

specific activity or activities

Accountability

assignment to complete a 

specific activity or activities

Support

right tools and 

resources to do job

• Active Listening. Give your full attention. Focus 

on the message, not formulating your response to 

it. Establish and maintain eye contact, paraphrase 

key points, and avoid making judgments.

• Questioning. Ask questions to promote discovery 

of new knowledge and stimulate thinking. Use 

open questions that require some thought to 

complete.

• Giving Feedback. This is one of the most 

valuable yet least used tools in communication. 

People are often uncomfortable giving feedback 

to others, particularly when they believe it could 

be perceived as negative. Offer factual, specific, 

but non-judgmental (and unemotional) feedback.

• Sharing. Share your experiences. Make 

suggestions on overcoming difficulties or how to 

proceed.

COACHING SKILLS
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GENERIC INTEGRATED PRODUCT TEAM (IPT) 

PROCESS

Identify a Need for an IPT—Determine whether the creation of a team is the 

best method to accomplish the intended purpose.

Staff the Team—Determine what functional disciplines and organizations/activities 

need to be represented and who the team members will be.

Conduct Team Startup Activities—Conduct activities to get the team started, 

such as establishing operating agreements, assigning roles and responsibilities, and 

conducting team training sessions. Activities also include discussing and agreeing 

on the team’s intended purpose and developing shared goals, critical success 

factors, and metrics to measure team progress toward goals. A common output of 

these activities is the Team Charter. (See page 108.)

Develop a Plan of Action—Take specific action steps or processes for how the 

team will perform. This includes assigning action items, establishing target dates, 

determining what resources are needed, etc.

Execute the Plan—Perform the work necessary to accomplish the project goals 

and produce the team deliverables.

Assess and Realign—Conduct periodic assessments of team performance and 

use metrics to measure progress toward goals. Make adjustments as necessary.

Conduct Team Closeout Activities—Deliver the final product or service, 

update program documents, and compile lessons learned.

Identify the

Need for 

an IPT

Staff the

Team

Conduct

Team Startup 

Activities

Develop a

Plan of Action

Conduct Team 

Closeout

Activities

Execute

the Plan

Assess and 

Realign
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FORMULA FOR EFFECTIVE TEAM PERFORMANCE

Direction + Commitment + Energy + Capability + Empowerment +

Effectiv

e

Team

Enablers

Performanc

e

Leadership

What’s In It

For The Customer? For Me? DA

U

PL

M OJ

T

Coaching/

Mentoring

*

Customer Factors (Examples)

• Improved Capabilit

y

• Improved Readiness• Reduced O&M Costs

Individual Factors (Examples)

• Personal Standards

• Personal Interests

• Personal Values

• Career Goals

• Work Ethic

• Securit

y

• Welfare

• Moral

e

*Effective Team Enablers

• Communication• Collaboration• Contribution• Trust What’s In It

LEGEND:DAU—Defense Acquisition UniversityO&M—Operation and MaintenanceOJT—On-the-Job TrainingPLM—Performance Learning Model
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TEAM CHARTER

Team Charter. A document describing key aspects of why a team is 

established, what is expected of it, and what authority and responsibility it has. The person or entity creating (i.e., “chartering” or authorizing) the team normally provides some general guidance; however, the 

team may benefit considerably by developing the “meat and potatoes” 

of the charter, resulting in increased commitment of all team members. 

Examples of topics that may be included in a charter follow:

• Purpose. Describe why the team exists and what it is intended to 

accomplish.

• Goals/objectives. List specific, measurable items the team is 

focused on achieving to help it exceed its customer’s expectations.

• Critical success factors. List the critical actions the team must 

perform to ensure it is successful in fulfilling its purpose.

• End products/deliverables. Describe the item(s) the team is 

responsible for delivering.

• Authority and accountability. Describe what team members are 

allowed/not allowed to do without authorization from a higher level. 

Describe what they are responsible for completing.

• Metrics. List measures of progress for critical success factors and 

goals/objectives.

• Program schedule. List key program/team milestones and events.

• Team membership. List team members and contact information.

• Roles and responsibilities. List specific assignments for improving 

team performance (e.g., timekeeper, recorder or scribe, scheduler, 

etc.). Also, list specific tasks and/or action items the team is assigned 

to complete. 

• Resources required. Describe the funding, materials, equipment, 

support, etc., the team needs to complete its mission.

• Program organizational structure. Define where the team fits within 

the overall program office structure.

• Program organizational structure. Describe or depict where the 

team fits in the overall program office structure.

• Operating agreements/ground rules. List agreed-upon guidelines 

describing how team members will interact, what processes they will 

use, and what they expect of one another. 

• Customers, suppliers, and stakeholders. List key individuals, 

teams, and organizations involved with the team’s output.
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RECOGNIZE WHICH PHASE OF 

TEAM DEVELOPMENT YOU ARE 

IN AND TAKE POSITIVE ACTION 

TO WORK THROUGH.

WORKING GROUPS

Team Development Wheel

Performing

Creative

Trusting

Effective

Confident

Forming

Milling

Confusion

Polite

Purposeless

Norming

Cohesion

Purpose

Feedback

Relevancy

Storming

Conflict

Frustration

Resistance

Cliques

NOTE: There can be an additional phase—“Adjourning”—when the team disbands, 

says good bye, and reflects on lessons learned. This is a “celebration” phase.

This diagram is based on Dr. Bruce Tuckman’s 1965 study of small groups, which identified the traditional 

five phases experienced by project work teams.
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 Disadvantages

• Takes more time

• Hard to terminate

• Paralysis by analysis

Management Tradeoffs for Working Groups

 Advantages

• More ideas and solutions

• Consensus positions

• Strong commitments

TEAM PERFORMANCE MODEL

• Decision Making

• Resolving Issues

• Communicating

• Planning

• Executing

• Controlling

• Customer Focus

• Leadership

• Values

• Vision

• Purpose

• Goals and Objectives

• Critical Success Factors

• Awareness

• Roles and Responsibilities

• Operating Agreements

• Team Accountability

• Empowerment

• Trust

• Five Cs

• Team Identity

• Self-Assessment

Communication

Commitment

Cooperation

Contribution

Caring

Team Processes

Team Principles

Team Dynamics

Team Foundation

Thinking

Learning

Charter

• Diversity

• Conflict

• Comfort Zones

• Communications

• Focus

• Organizational Climate

• Trends

Typical Working Groups

•	 Logistics Support Management Team (LSMT)

•	 Test and Evaluation Working Group (TEWG)

•	 Computer Resources Working Group (CRWG)

•	 Requirements Interface Working Group

•	 Interface Control Working Group (ICWG)

•	 Technology Assessment Working Group

•	 “Tiger” Team

•	 Process Action Team (PAT)

•	 Integrated Product and Process Teams (IPPTs)
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—Don’t try to force consensus. Listen to other positions and 

reactions before expressing your own point. 

—No winners or losers. Don’t assume that someone must “win” 

and someone must “lose” if the discussion reaches a stalemate.

—Don’t avoid conflict. Don’t change your mind simply to reach 

agreement and maintain harmony.

—Avoid majority votes, compromises, or horse trading to reach an 

agreement.

—It’s OK to disagree. Differences of opinion are natural and 

expected.

NOTE: Groupthink. A phenomenon—to be avoided—where team members become so concerned about 

preventing disagreement or conflict that they abandon critical thinking to simply go along with whatever 

consensus seems to be emerging.

TEAM DECISION MAKING

Good team decision making is a critical element of team performance. It involves 

examining the decision context (e.g., current program environment, assumptions, constraints, pressures, stakeholder inputs, etc.), determining who needs to be involved in 

the decision, verifying how much time is available to make the decision, and deciding 

on the decision-making process.

Generally Accepted Team Decision-Making Methods

•	 Unilateral. One person makes the decision, usually the team leader. 

Variations:

— Directive or Authoritative. The person making the decision does so primarily 

using his/her knowledge, experience, and program guidelines/constraints, but 

is also influenced by his/her own reasons and motives.

— Consultative. The person making the decision may seek input from other 

team members, but ultimately, he/she still makes the decision on his/her own.

•	 Majority. Each team member votes, and the majority decides the course of action.

•	 Consensus. Team members may not completely agree with the most preferred 

approach, but they have the opportunity to express their point of view, understand 

the logic behind the decision, and support it. Consensus is generally the preferred 

decision-making method for most team issues, especially when the commitment of 

all team members is important.

Guidelines for Achieving Consensus:
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EFFECTIVE MEETINGS

Prior to the Meeting

• Determine and clarify the purpose for the 

meeting

• Determine expected meeting outcomes

• Identify meeting attendees

— Subject-matter experts

— Key decision makers

— People directly affected by potential 

decisions/outcomes

• Determine meeting format

— Face-to-face, virtual teleconference, 

teleconference, Web tool

• Determine date/time/location

• Develop and distribute meeting agenda (at least 24 hours prior)

— Specific topics, presenter, estimated time, desired outcome

• Meeting logistics

— Room setup, IT support needed

During the Meeting

• Opening

— Start on time

— Review agenda

— Set or review ground rules

— Clarify roles

• Conducting

— Address one item at a time

— Facilitate discussions

— Encourage open communication and information sharing

— Maintain focus and pace

— Specify topics, presenter, amount of time devoted to item

• Closing

— Summarize agreements and decisions

— Review action items

— Ask for agenda items for the next meeting

— Set the date/time of the next meeting

After the Meeting

Review and publish minutes
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DECISION BRIEFING

Elements of a Decision Briefing

• Outline—Agenda

• Purpose of Briefing/Issue(s)

• Background

• Assumptions

• Alternatives Identified

• Evaluation Criteria/Process

• Analysis of Identified Alternatives

• Recommended Alternative

• Rationale for Recommendation

• Recommended Implementation Plan

• Key Risks for Recommended Implementation Plan

What to Expect from the Person/People Receiving the Briefing

• Challenges to assumptions, definitions, methodology

• Questions concerning compliance with or

changes to policy

• Sensitivity of the issue and/or

recommended alternative to change

• Questions or challenges to analysis,

tradeoffs, rationale for recommendations, and implementation plan

• Questions concerning risks for the recommended implementation

plan

NOTE: Questions may be open-ended or closed (e.g., yes/no answers).
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Messages pass through filters; first through the filter of the person 

sending the message and then through the filter of the receiver. Filters 

sometimes act to enhance the message, and at other times, they can 

be barriers. Filters consist of factors such as personality, tone of voice, 

body language, facial expressions, accents, perceptions, attitudes, 

emotions, knowledge, functional background, the medium of communication used (verbal, written, e-mail, etc.). and much more. Each 

person’s filter is different, sometimes resulting in the receiver interpreting the message differently than the sender intended.

One of the most important communications skills (and often a barrier 

to effective communications) is listening. Learning to “actively listen” 

can increase communications effectiveness significantly

Active listening involves:

• Establishing and maintaining eye contact.

• Focusing on what is being communicated.

• Not making judgments about the sender’s

information.

• Not formulating your reply before the sender has

finished sending his/her message.

• Paraphrasing key points the sender makes (when the sender

pauses—don’t interrupt to paraphrase what’s being communicated).

Effective program management requires 

that the right people get the right information at the right time. Program communications must take place vertically (up and 

down), horizontally, and externally.

Program Office

COMMUNICATIONS

Message

Feedback

Sender Receiver

Filter

Filter
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Communications Plan

One way to ensure the right people get the right information at the right times is to develop a 

program (and/or team) communications plan. The plan may include:

• Key entities (program management leadership, IPTs, customer, contractor(s), and key 

stakeholders)

• What information they should provide

• What information they should receive

• How it is provided/received

• Format, frequency/interval, and other factors considered important for 

the particular program/situation

• Types of meetings, such as regular status meetings and program 

management reviews

• Reports (e.g., status reports, cost/schedule performance reports, action item lists)

• Issues and the policy for elevating them to higher levels

• Other forms of communication and how and by whom they are used

Interpersonal Negotiation Techniques

Purpose: Resolving conflicts

Objective: Seek to satisfy both parties’ interests

Methodology:

— Acknowledge the conflict and its effect on performance.

— Separate people and emotions from the issue.

— Present issues in terms of the underlying interests or 

requirements, i.e., the most important aspects of what you need 

to achieve.

— LISTEN to the other party’s interests/requirements; be able 

to restate their interests to their satisfaction (indicating you 

understand what interests they are trying to achieve).

— Agree on what the issue is.

— Look for common goals and common interests.

— Identify as many possible alternatives to resolve the issue and satisfy the interests of 

both parties.

— Resist the urge to compromise (“meet in the middle”). Instead, look at the issue from 

different perspectives—challenge assumptions and constraints.

— Agree on the alternative that best meets both parties’ interests.

— Obtain the commitment of all members of both parties on what will be done to implement 

the solution.
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DIRECTIVE

•	 Give advice

•	 Evaluate

•	 Motivate

•	 Explain

•	 Reassure

NONDIRECTIVE

•	 Don’t display authority

•	 Listen carefully

•	 Don’t advise

•	 Facts only; no opinions

•	 Employee find solution

Advantages

•	 Effective with inexperienced personnel

•	 Quick

•	 Take charge attitude

Advantages

•	 Develops commitment

•	 Good training

•	 Employee responsible

•	 Supports delegation

Disadvantages

•	 Perceived insulting

•	 Does not support delegation

•	 Manager keeps responsibility

Disadvantages

•	 Takes time

•	 Skill/patience required

•	 Ineffective with inexperienced personnel

COUNSELING PROCESS

1. Set up interview—private, confidential, and

 unhurried

2. Encourage discussion—open questions, 

 active listening

3. Help employee think it through—deal with

 facts, no opinions or own views

4. Let employee find the solution—his/her solution

to the problem 

COUNSELING
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TIME MANAGEMENT

1. List all the tasks you have to complete.

2. Prioritize the tasks based on urgency and importance of completion 

using the format shown below.

3. Do Priority 1 tasks first. If possible delegate some of them.

4. The key to effective time management is to schedule time to work on 

small pieces of Priority 2 tasks. 

— If not completed early, they will eventually become Priority 1 tasks.

5. Reassign or delegate Priority 3 tasks if possible.

— A common tendency is focusing on Priority 3 tasks (because of their 

urgency) instead of Priority 2 tasks (because of their importance).

6. Priority 4 tasks are time wasters/busy work and should be avoided.

Priority 1 Important Priority 2 Important

Urgent Not Urgent

Priority 3 Urgent Priority 4 Not Urgent

Not Important Not Important

 Common Time Robbers Avoidance Techniques

•	 Incoming telephone calls	 4 Screen for importance

 4 Allow voice mail to pick up the call

 4 Limit length of calls (e.g., 2 min.)

•	 Outgoing telephone calls	 4 Do as many at one time as possible

 4 Itemize topics before calling

 4 Stick to the topic; don’t socialize

•	 Unscheduled visitors	 4 Screen for importance

 4 Do not invite visitor into your office

 4 Remain standing

 4 Schedule a time for visitor to return

•	 Improper delegation	 4 Re-delegate

 4 Make a record of delegated tasks

 4 Assign deadlines

•	 Poorly conducted meetings	 4 Have a prepublished agenda

 4 Stay focused on subject

 4 Use a time keeper/gate keeper
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MANAGEMENT TOOLS AND TECHNIQUES

1. Activity-Based Management (ABM) uses detailed economic 

analyses of important business activities to improve strategic 

and operational decisions. ABM increases the accuracy of 

cost information by more precisely linking overhead and other 

indirect costs to products or customer segments. Traditional 

accounting systems distribute indirect costs using bases such 

as direct labor hours, machine hours, or materiel dollars. ABM 

tracks overhead and other indirect costs by activity, which can 

then be traced to products or customers.

2. Balanced Scorecard defines what management means 

by “performance” and measures whether management is 

achieving desired results. The Balanced Scorecard translates 

mission and vision statements into a comprehensive set of 

objectives and performance measures that can be quantified 

and appraised. These measures typically include: financial, 

customer value, internal business process, learning and growth, 

and employee performance.

3. Cycle Time Reduction decreases the time it takes a company 

or program to perform key activities throughout its value chain. 

Cycle Time Reduction uses analytic techniques to minimize 

waiting time, eliminate activities that do not add value, increase 

parallel processes, and speed up decision processes within an 

organization. Time-based strategies often emphasize flexible 

manufacturing, rapid response, and innovation in order to 

attract the most profitable customers.

4. Groupware refers to a broad range of technologies that allow 

people in organizations to work together through computer 

networks. These products range from sophisticated electronic 

mail packages to applications that link offices and employees. 

Organizations use such technology-aided communications 

to better inform strategic and financial decisions and to more 

effectively and economically bring together working groups. 

(DAU has a Groupware capability in its Management Decision 

Center, which is used for management decision making by 

offices and agencies throughout DoD.)
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5. Outsourcing occurs when a company or government agency 

uses third parties to perform non-core business activities. 

Contracting third parties enables a company or agency to focus 

its efforts on its core competencies. Many companies find that 

outsourcing reduces cost and improves performance of the 

activity. Third parties that specialize in an activity are likely to 

be lower cost and more effective, given their scale. Through 

outsourcing, a company or agency can access the state of the 

art in all of its business activities without having to master each 

one internally.

6. Business Process Reengineering involves the fundamental 

redesign of core business processes to achieve significant 

improvements in productivity, cycle times, and quality. In 

Business Process Reengineering, companies start with a 

blank sheet of paper and rethink existing processes to deliver 

more value to the customer. They typically adopt a new value 

system that places increased emphasis on customer needs. 

Companies and/or government agencies reduce organizational 

layers and eliminate unproductive activities in two key areas: 

First, they redesign functional organizations into crossfunctional teams. Second, they use technology to improve data 

dissemination and decision making.

7. Strategic Planning is a comprehensive process for 

determining what a commercial business or government 

agency should become and how it can best achieve that goal. 

It appraises the full potential of a business and explicitly links 

the business objectives to the actions and resources required 

to achieve them. Strategic Planning offers a systematic process 

to ask and answer the most critical questions confronting a 

management team—especially large, irrevocable resource 

commitment questions.
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CONTINUOUS PROCESS IMPROVEMENT/

LEAN SIX SIGMA (CPI/LSS)

(DoD Directive 5010.42, 15 May 2008)

•	“Lean” and “Six Sigma” are actually two distinct process improvement ideas

often merged together forming “Lean Six Sigma.”

•	“Sigma” is the term used for standard deviation—a statistical measure of

variation. Variation can be decreased via Standard Operating Procedures 

(SOPs) and training.

•	“Lean” references a process that can be shortened by eliminating non-valueadded steps.

•	Operating at a “Six Sigma” level of performance means the process

theoretically produces a 99.99966% defect-free yield or 3.4 Defects Per 

Million Opportunities (DPMO).

Lean

•	Reduces waste

•	Eliminates “non-value

added” activities

Six Sigma

•	Eliminates variability

•	Strives to eliminate defects

•	Uses 5-Step Process*

* Five-Step Process: Define, Measure, Analyze, Improve, Control (DMAIC)

Decide Which Opportunities Require Lean Six Sigma and 

Which Require Just Lean or Six Sigma 

If ...

•	Slow, wasteful business processes

are the problem

•	Little or no historical process data

•	GOAL: Process speed

•	Streamlined, highly efficient

business processes

•	Process variability identified as

a problem based on statistically 

significant historical data

•	GOAL: Process consistency

•	Slow, wasteful business processes

combined with low performance or 

quality variability 

•	GOAL: Speed and consistency

Then ...

•	Focus on Lean

— Elimination of “non-value added” 

activities

— Workflow simplification

•	Focus on Six Sigma

— Elimination of variation factors 

and lack of control

— Data-driven management 

•	Focus on integrated Lean and 

Six Sigma

— Methodology as a total performance solution

— Total process view with embedded measurement and assessment capabilities leading to positive performance management
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CHAPTER 3

PROBLEM-SOLVING TOOLS

BRAINSTORMING

PURPOSE: To stimulate the free flow of ideas in a short amount of time 

without being analyzed or judged until the brainstorming is complete.

METHOD: There are three primary types of brainstorming: structured, 

unstructured, and silent. 

• Structured: Participants take turns offering ideas; if someone doesn’t

have an idea when their turn comes, they can pass.

— Advantage: Each person has an equal chance to participate.

— Disadvantages: Lacks spontaneity; participants may get 

distracted by other ideas and forget theirs when their turn 

comes, atmosphere is more rigid.

• Unstructured: Participants offer ideas as they think of them.

— Advantage: Participants can build on each others’ ideas;

atmosphere is more relaxed.

— Disadvantage: Less assertive and/or lower ranking participants 

may feel intimidated and not contribute.

• Silent: Participants write ideas individually on paper or Post-itTM

notes. This is particularly useful when you have participants who just 

can’t avoid discussing the ideas as they are offered.

— Advantage: Prevents discussion of ideas during the idea 

generation phase.

— Disadvantages: May lose the opportunity to build on others’

ideas unless a structured or unstructured session is held after 

the silent inputs are collected and displayed.

The brainstorming session ends when no more ideas are offered.
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GROUND RULES:

Don’t discuss ideas as they are offered. In particular, don’t

analyze, evaluate, criticize, or judge. Discussion can be held 

after the brainstorming session ends.

There are no outrageous ideas. There is plenty of time during 

the discussion after the brainstorming session to toss out ideas 

that won’t work. Even if idea is totally outrageous and obviously

won’t work, it may spark another idea that is usable.

Don’t quit when the ideas first stop flowing; try to get participants to come up with at least 2-3 more ideas.

Strive for quantity, not quality. The more ideas you generate, 

the better the opportunity to find the best possible solution.

Combine and rearrange ideas; additions, revisions, and combinations may create even better ideas. 

Record ideas exactly as offered, don’t edit or paraphrase.

QUESTIONS TO STIMULATE YOUR THINKING: 

1. Can we use this idea somewhere else? As is? With changes?

2. If we change it, is there anything else like it? Any related 

issues?

3. Can we modify or rearrange: the meaning, quantity, color, size, 

shape, form, layout, motion, sound, appearance, etc.?

4. Can we maximize or magnify it to make it stronger, larger, 

newer, more of it?

5. Can we minimize or reduce it to make it smaller, lighter, less of 

it?

6. Can we substitute? Who? What? When? Where? How?

7. Can we reverse it? Opposite? Backwards? Upside down? 

Inside out?

8. What assumptions or constraints are we considering? Are they 

valid? What if we threw them out?

9. What if you could do anything you can imagine?
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CAUSE-AND-EFFECT DIAGRAM 

(“FISHBONE” OR ISHIKAWA DIAGRAM)

PURPOSE: To help analyze a problem in increasing detail to identify 

all of its causes, leading to discovery of its root cause(s). The Causeand-Effect Diagram graphically depicts the relationship between a 

problem and its causes.

METHOD: 

• Use brainstorming to generate the potential or known causes for the

problem (or effect) being studied.

•	 Begin constructing the “fishbone” diagram by placing the problem

statement on the right side of the chart (head of the “fishbone”). 

•	 Draw an arrow from left to right ending at the problem statement (the

backbone of the “fishbone”).

•	 Place the major cause categories (If known) as the major “bones’

of the fishbone, as shown in the example below (in the example: 

people, product, process, equipment). 

•	 If the major causes are not known, after brainstorming all the

causes, sort them into similar groups using the Affinity Diagram. The 

titles of the groups become the major cause categories.

•	 Add the brainstormed causes as the smaller bones in the diagram

as shown in the example below (e.g., inadequate training, poor 

teamwork, etc.). Causes can be added to the major categories 

after all the causes have been generated via brainstorming 

(recommended), or added as they are generated.

•	 To spark additional brainstorming of causes, ask for each of the

“small bone” causes: “What causes this to happen?”

EXAMPLE:

PROCESS EQUIPMENT

Poor

Component

Reliability

PEOPLE PRODUCT

Inadequate

Training

High Operating 

Hours

High

Turnover

Specs

Miscalculated

Poor

Teamwork

Incorrect

Tolerance

Miscalibrated

Miscalibrated

Curling 

Time

Incorrect

Setting

Temperature

Humidity

Misaligned

Storage

Facility

High Operating 

Temp
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FORCE FIELD ANALYSIS 

PURPOSE: To identify the factors or forces that either support or work 

against a desired outcome.

METHOD: 

•	 Draw a “T” shape as shown below.

•	 Brainstorm the forces that will assist you in achieving the desired

outcome. List them on the left side of the vertical line.

•	 Brainstorm the forces that may prevent or restrain you from reaching

your outcome. List them on the right side of the line.

•	 (Optional) Prioritize the driving forces (left side) and/or the restraining

forces (right side).

•	 Look for opportunities to take advantage of or strengthen driving

forces.

•	 Identify restraining forces that you might be able to eliminate (or

reduce the “force” or impact).

•	 It is often more helpful to eliminate restraining forces than attempting

to strengthen driving forces. In most cases, the driving forces will 

remain present and continue to help you even if you do nothing to 

strengthen them; whereas eliminating restraining forces can have 

significant benefits in achieving your objective/outcome. 

•	 In a “pound-for-pound” or “best bang for the buck” fashion, the force

field analysis is one of the most powerful tools in terms of the effort 

required to generate it and the potential benefits derived from it.

•	 Restraining forces can also be identified as potential risks, and

entered into the risk management tracking system. 

EXAMPLE:

OBJECTIVE: Successfully Complete Preliminary Design

+ Driving Forces

Experienced teamleader

Comprehensive Sys Eng Plan

Risk Management expertise

Computer-aided design tool

Event-driven tech reviews

Realistic schedule

Restraining Forces –

Poorly defined requirements

Insufficient personnel assigned

Poorly trained personnel

Lack of technology maturity

Unclear project objectives
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HISTOGRAM 

PURPOSE: To graphically depict the frequency distribution of data items 

using a vertical bar chart (columns) format.

METHOD: 

•	 Collect data on a particular variable.

•	 Generate a frequency table listing all the data points.

•	 Count the number of data points.

•	 Determine the range of values for the data (maximum value minus

the minimum value).

•	 Determine the number of bars to depict in the chart. One common

method is to use the square root of the number of data points; e.g., 

100 data points = 10 bars; 225 data points = 15 bars, etc.

•	 Calculate the intervals represented by each of the bars.The simplest

method is to divide the range of values by the number of bars (from 

previous step).

•	 Determine the frequency of data points within each interval of values.

•	 Create a vertical bar chart with a vertical bar (column) for each of the

variable values or range of values you measured on the horizontal 

axis. The height of the bar will equal the frequency (on the vertical 

axis) for each of the values/ranges.

EXAMPLE:

•	 In the example below, the sample size is 220 data points (N=220).

•	 The square root of 220 is between 14 and 15, so either will work for

the number of bars in the chart (14 bars are used in the example).

•	 The range of values is 350 hrs (1350 hrs minus 1000 hrs). Dividing

the range (350) by the number of bars (14) results in intervals of 25 

hrs. Frequency

Hours Between Failures

0

1000 1025 1050 1075 1100 1125 1150 1175 1200 1225 1250 1275 1300 1325 1350

5

10

15

20

25

30

35

40

N=220
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SCATTER DIAGRAM 

PURPOSE: To graphically depict the changes in two variables to determine if there is a relationship between them.

METHOD: 

•	 Collect paired data samples for the two variables.

•	 Place measures for the independent variable (the hypothesized

cause) on the horizontal axis, and measures for the dependent 

variable (the hypothesized effect) on the vertical axis.

•	 Plot the data on the chart

•	 Analyze the data to determine if there is a statistical relationship

between the two variables. 

EXAMPLE:

Y

X

Y

X

Y

X

Positive Correlation

For an in creasein “X”

there is a corresponding

increase in “Y”

Negative Correlation

For an in creasein “X”

there is a corresponding

decrease in “Y”

No Correlation

For an in creasein “X”

there is no corresponding

reaction in “Y”

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

100 105 110 115 120 125 130 135 140 145 150

NOTE: In the Example, it appears that for the increase in 

weight, there is a corresponding increase in cost

Cost ($K)

Weight (lbs.)
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SURVEYS

Surveys are used to collect data from a variable number of items or people 

for a comparative study. They are used when a new project is planned to 

prove the need and the demand of the customer.

Surveys can be used anywhere in the organization to find out specific 

information that is necessary to make improvements in a process.

Surveys:

•	 Are an inexpensive way to test a system or product;

•	 Can be used with a large number of people or a small group;

•	 Can give you an overall view, determined by the questions you ask;

•	 Show if an organization is meeting its quality goals; and

•	 Help identify satisfied and dissatisfied customers or employees.

Survey Process

1. Determine the group to be studied.

2. Determine what questions will be asked. 

Note: Train your data collectors thoroughly. Everyone must know how to ask the 

questions, whom to approach, and how to approach them.

3. Compile your results in chart form using a Pareto Chart (see page 

130), histogram, and other tools that will give you clarification.

4. Use the compounded data to form a base for improvement.

5. Continue to take data to monitor improvements and make sure the 

improvements you have made are working.

Caution!

•	 Data must be collected honestly and consistently.

•	 An untrained collector can skew the data to reflect personal biases.

•	 A poor, inconsistent survey will give you invalid data.

•	 Make sure there is enough time allowed for the collecting process. 

BRAINSTORMING SURVEY
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AFFINITY DIAGRAM

PURPOSE: To help a team generate a large number of ideas or issues 

and organize them into categories for further analysis, evaluation, decision, or action.

METHOD: 

•	 Agree on what the problem, issue, question, or desired outcome is.

•	 Brainstorm as many ideas about the problem, issue, question, or

desired outcome as you can.

•	 Without discussion, sort the ideas into related groups.

•	 If two people can’t agree on which category it best fits, consider

duplicating it and including it under both.

•	 For each group, identify a name that summarizes the topics listed for

them.

Tip: Use Post-itTM type notes to record the ideas on, which allows you 

to easily move the ideas from one category to another.

EXAMPLE:

Note: Attributes shown above are for illustration only, and not meant to portray actual answers to the 

question.

What are the Attributes of an Effective Leader?

Honesty

Trustworthy

Does the right things

Loyal

Courageous

Sets the example

Integrity

Inspires

Focused on people

Trusting

Caring

Sets high standards

Empowers

Supportive

Motivation

Good listener

Effective speaker

Encourages open 

communication

Communication

Provides career 

counseling

Supports training

Provides professional 

growth opportunities

Coaching/Mentoring

Has a big picture view

Clearly stated goals

Visionary

Makes decisions

Involves others in 

decisions

Decisive

Drives change

Innovative

Change Agent

Strong technical 

expertise

Knowledgeable
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PAIRWISE RANKING

PURPOSE: To provide a structured method for ranking small lists of 

items in priority order.

METHOD: 

•	 Construct a pairwise matrix.

— Each of the squares in the matrix at 

right represents the pairing of two 

items (where the numbers intersect).

— In this example, the list includes 

five items; the top square (shaded) 

represents the pairing of item 1 with 

item 2.

•	 Rank each pair of items.

— For each pair of items, the team 

should reach a consensus on which of the two items is 

preferred over the other.

— As the team completes each of the comparisons, the number of 

the preferred item is recorded in that square, until the matrix is 

completely filled in.

•	 Count the number of times each item appears in the matrix.

— Using the filled-in matrix (on the far right above), count how 

many times each item is listed in the matrix, and record the 

totals in the ranking matrix (at right).

1

2 2

3

4

5

3

4

1

2 2 2

3

4

5

3

4

1 and 2 are compared;

2 is preferred

1

1

2 2 2

3

4

5

3

4

1 and 3 are compared;

1 is preferred

1

1

1

2

2

2

2 2

3

4

5 5 5 5 5

3

3 4

...and finally, 4 and 5 are

compared; 5 is preferred

Alternative 1 2 3 4 5 

Count 2 3 1 0 4 

Rank 
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•	 Rank all of the items.

— Rank the items based on how many times they appear in the 

matrix.

— To break a tie between two items appearing the same number 

of times, look at the square in the matrix where the two were 

compared; the item appearing in that box receives the higher 

ranking.

EXAMPLE:

A program team was asked to recommend a site for testing a unique portion of 

a system. A feasibility study produced a list of six possible locations. The team 

then used Pairwise Ranking to determine that Nellis AFB was best suited for 

this particular test.

1. Fort Huachuca 4. Nellis AFB

2. Edwards AFB 5. Eglin AFB

3. Kirtland AFB 6. Hanscom AFB

Items 5 appear four times 

in the matrix, so it ranks 

1st (see shaded squares in 

the matrix at right); Item 2 

appears three times, which 

ranks 2nd, etc.

Alternative 1 2 3 4 5 

Count 2 3 1 0 4 

Rank 3rd 2nd 4th 5th 1st

1

2 2

1 3 3

4 4 4 4

5 5 5 4 5

1 6 6 4 5

2

3

4

5

6

Site

Count

Rank

1

2

3rd

2

1

6th

3

1

5th

5

4

2nd

6

2

4th

4

5

1st
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PARETO CHART

PURPOSE: To help identify and prioritize issues or problems, identify 

root causes, or evaluate results of improvement areas. The Pareto 

Chart graphically displays the frequency of occurrence of data items.

METHOD: 

•	 Decide on the categories of items (e.g., issues or causes) on which

to focus.

•	 Choose the measurement units which provide the most meaningful

comparison between the categories of items.

•	 Determine the time period to collect data.

•	 Collect data on the chosen categories of items.

•	 Create a frequency table listing all the categories, the frequency of

their occurrence, and the percentage of their occurrence.

•	 Create a vertical bar chart with a vertical bar (column) for each of

the categories you measured on the horizontal axis, starting with the 

category with the highest frequency of occurrence on the far left side 

and continuing in descending order to the right to the category with 

the lowest frequency of occurrence on the far right side. The height 

of the bar will equal the frequency (on the left vertical axis) for each 

of the categories.

•	 (Optional) Draw a line showing the cumulative percentage of the

categories from left to right (0-100%). Draw a vertical axis on the 

right side showing the percentage scale.

EXAMPLE:

10

20 20 % Operator Error (31) Overheating (17)

Vibration (13)

Power Surge (10)

Factory Setting (9)

Miscalibration (8)

Improper Install (5)

Improper Storage (4)

Improper Handling (4)

Other (3)

40 %

60 %

80 %

100 %

30

40

50

60

70

80

90

100

Failure Causes

# of Failures
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BENCHMARKING

Benchmarking is the process of measuring products, services, and 

practices against the toughest competitors or those known as leaders 

in their field. Benchmarking can help you:

•	 Understand how you compare with similar organizations; and

•	 Identify areas for process improvement.

HOW TO DO IT:

Identify the process to be benchmarked. Select a process (as opposed to a product) that is important to both your organization and your 

customers. Be sure the process in your organization is similar to and 

measured in the same manner as the one to which it’s being compared.

Study other organizations. Develop a list of organizations with 

comparable products and services. Determine what specific processes the organization performs. Based on this information, rank 

the organizations from best to worst.

Compare and evaluate. Compare your process to the best and 

worst cases and list the important differences. These differences can 

suggest potential improvements to your process.

BENCHMARKING EXAMPLE:

Using inputs their 

customers provided, 

the executive leaders at 

AF Product Division B 

decided that their source 

selection process needed 

improvement. As part of 

the initial analysis, they 

wanted to see how their 

process compared with 

others. They determined 

that the average number 

of days required for source 

selection was an important 

process measure. 

As a result of this analysis, representatives visited AF Product Division 

A and Navy Division B and studied their source selection procedures.

Note: Benchmarking is not replicating a process from an organization that excels (unless 

your goal is to be 2nd best). It is studying the process, clearly understanding the theory 

behind the process, and then restudying your own process to determine improvements.

Cash

received

Accounts

receivable

Sale

(DD 250) Finished goods

inventory

Raw material

inventory

Contract

award

Cash

disbursed

Cash

disbursed

Wages

payable

Work in process

inventory

Accounts

payable
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FLOWCHARTING 

PURPOSE: To identify the steps or tasks in a process. The current 

process can then be analyzed to discover duplicate or unnecessary 

actions, bottlenecks, or other problem areas. Ideas for improvement 

can then be identified.

METHOD: 

•	 Clearly define where the process begins and ends.

•	 List all of the steps in the process, including decision points, and

inputs to and outputs from the process.

•	 Arrange the steps of the process in the sequence in which they

currently occur. If it is a new process, begin with the sequence in 

which you believe they will occur.

•	 Draw the appropriate symbols for each of the items in the process.

•	 Label the items in the process with text describing that item.

•	 Add arrows showing the process flow.

•	 Review for accuracy.

— Correct symbols

— Correct labels

— Correct sequence

— Correct direction of flow

EXAMPLE:

Common Flowchart Symbols

Terminator - shows the begining and ending points of

the process. Start points are usually some sort of trigger

acrivity for the process.

Activity - an action step or process (within the process).

Decision Point - where a decision is required; usually

with two options (e.g., yes/no).

Connector - shows a jump from one point in the process

to another, or to another page. Usually labeled with letters

(e.g., A<B<C< etc.).

Document - a step or action that produces a document.
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EXAMPLE:

Analyze Risk

Root Causes

Determine

Probability of Root

Cause Occurring

Determine

Consequence if

Root Cause Occurs

Determine

Overall Risk

Rating

(Hi, Med, Low)

Prioritize Risk

Determine

Consequence

Category

Impact to

Performance?

Classify as

Performance

Risk

Classify as

Schedule

Risk

Classify as

Cost Risk

Impact to

Schedule?

Risk Analysis Process
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DEPLOYMENT FLOWCHARTS

PURPOSE: Depicts a process and the individuals or teams responsible 

for the steps/actions in the process. The Deployment Flowchart can be 

useful to clarify individual or team roles and responsibilities, and also 

to detect/prevent duplication of effort.

METHOD: 

•	 List the steps of the current process.

•	 Identify the individuals/teams involved.

•	 Draw the Deployment Flowchart showing the activities, decisions,

inputs, outputs, documents, etc. (see example below).

•	 List the individuals/teams across the top of the chart, and the

timeline (if applicable) down the side (see example below).

•	 Evaluate the current process for possible changes, and update as

necessary.

EXAMPLE:

Person A

TIMELINE (Optional)

Person B Team 1 Person C

Start

End

Action

Action

Action

Action

Action A

A

Dec

Dec

Dec

N

N

N

Y

Y

Y

Action

Action

Report
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NOMINAL GROUP TECHNIQUE (NGT)

PURPOSE: To rank or prioritize the importance of issues, alternatives, 

or processes. Helps a team reach consensus quicker by showing preliminary areas of agreement. Allows individual team members to assign 

a rank or priority to items without influence or pressure from others.

METHOD: 

•	 Brainstorm a list of the issues, alternatives, or processes that you

are analyzing.

•	 Compile a final list of brainstorming inputs by eliminating duplicate

or similar inputs, and clarifying the meanings of any inputs that are 

unclear.

•	 Each team member votes by ranking the inputs in order of

importance (see first example on next page).

•	 The highest number is generally used to indicate the most important

or highest priority item. For example, if team members are ranking 

10 items, “10” would represent the most important item and “1” the 

least important item. Make sure you specify the values used in the 

ranking, i.e., which number represents the highest or most important 

rating, and which represents the lowest, to ensure there is no 

confusion.

•	 Team members may rank all of the items, or some pre-designated

portion of the items (particularly when there is a long list), such as a 

third or a half.

•	 Add all of the rankings, and analyze the results.

•	 Unless the team is pressed for time, use the ranking information as a

starting point for discussion instead of accepting it as a “final score.”

•	 An alternate method is to assign each team member a number of

points (e.g., 100), which they allocate across the options (some or 

all). This variation is known as weighted multivoting (see second 

example on next page).

•	 When using weighted multivoting, it’s a good idea to assign a

maximum number of points that can be assigned to any one 

item (e.g., 40 out of 100) to prevent one team member for overrepresenting the relative importance of an item (see Item H in the 

second example on the next page).
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Causes (7) Peter Paul Mary Total

Inadequate team training 6 3 5 14

Unclear objectives 4 7 3 14

Insufficient resource 3 5 2 10

High team member turnover 2 2 4 8

Inefficient team process 5 6 7 18

Team member hidden agendas 7 4 6 17

Poor functional representaion 1 1 1 3

Issues (12) John Paul Ringo George Total

Item A 40 30 10 20 100

Item B 5 5

Item C 10 10 20 40

Item D 10 20 30

Item E 20 10 30

Item F 5 5 10 

Item G 15 20 20 20 75

Item H 50 50

Item I 10 5 5 20

Item J 5 10 15

Item K 10 10

Item L 5 5 5 15

Problems with Team Performance (Ranking for Example)

Weighted Multivoting Example
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CREATIVE PROBLEM SOLVING

DIVERGENT PHASE 

1. Avoid judging or evaluating ideas as they are offered

2. Generate as many ideas as possible

3. Accept all the ideas generated

4. Stretch your thinking

5. Allow time for ideas to “grow”

6. Combine or connect ideas or concepts

CONVERGENT PHASE 

1. Use a logical, methodical approach to make choices or decisions

2. Clearly and specifically state the basis for evaluating ideas

3. Avoid a rush to closure

4. Don’t ignore or avoid difficult issues

5. Look for strengths or positive aspects of ideas

6. Remain focused on the objectives

Diverge

Converge

1. Identify the goal or challenge.

2. Gather releveant data.

3. Define the problem.

4. Generate potential solutions.

5. Select, and if possible, stengthen the solution.

6. Develop a plan to implement the chosen solution.

Each six steps above has a Divergent Phase ( ) followed

by a Convergent Phase ( ). See below for a description of

the steps in each phase
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RESPONSIBILITY ASSIGNMENT MATRIX (RAM)

PURPOSE: Display actions, tasks, or assignments; and what responsibilities each individual has for them.

METHOD: 

•	 Brainstorm a list of actions or tasks the team must complete.

•	 List the team members and other stakeholders who may have

responsibilities.

•	 Construct a matrix with the actions/tasks listed down the left side of

the matrix, and the people listed across the top.

•	 Choose the symbols to indicate the level of responsibility

represented in the matrix (e.g., primary, secondary, keep informed, 

etc.).

•	 Agree on the individual responsibilities and complete the matrix by

placing the symbols for each step/task under the appropriate people.

•	 Generally, only one person should have primary responsibility, others

with some responsibility would have secondary responsibility.

EXAMPLE:

Goal:

Establish and 

maintain an 

effective risk

management 

program

Legend:

= Primary

 Respond

= Second

 Respond

R = Review

C = Coord

Communicate Risk Mgmt Goals

PMRisk CoordRM IPTRMIS MgrProg IPTsRisk SMEs

Identify Risk Coordinator

Establish Risk Mgmt IPT (RM IPT)

Draft Risk Mgmt Plan

Approve Risk Mgmt Plan

Identify Risk Events

Analyze Risks

Prioritize Risks

ID/Evaluate Mitigation Strategies

Select Risk Mitigation Strategies

Enter Risk in Risk M13 (RM13)

Tasks

I = Input

C

I

I

I

I

I I

I

I

I

C

C

R

R C

R
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As you work your way through the problem, everything should move 

into the left column—“Know.”

KNOT CHART

The KNOT Chart is useful for:

•	 Initially sorting the wheat from the chaff.

•	 Organizing/coordinating the next steps of the problem-solving

process.

 Think

Know Need to Know Opinion We Know
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QUALITATIVE PROBLEM SOLVING

Deviation Statement: Describe the actual performance vs. should performance

1. Define deviation.

2. Describe what deviation IS and IS NOT.

3. List distinctions between what deviation IS and IS NOT.

4. Do distinctions indicate or suggest a change?

5. Determine possible causes based on distinctions and changes.

Copyright Kepner Tregoe, Inc. (1981). All rights reserved. Reprinted with permission. (Kepner-Tregoe, 

Inc., Research Road, P.O. Box 704, Princeton, N.J. 08542)

Specifying

Question

What?

(Identify)

Where?

(Location)

When?

(Timing)

Extent?

(Magnitude)

Does the distinction

suggest a change?

What is distinctive about

Is Is Not “Is” vs. “Is Not”?

Possible Causes:

Most Likely Cause:
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GANTT CHART

A Gantt Chart is used for planning schedules and managing projects. 

It is a method for basic planning and work instruction.

How to do it:

1. The Gantt Process begins by listing the activities of a project in 

order of execution.

2. Place the number of each activity across the top of your chart. 

Time duration such as days, weeks, years, etc., can replace 

activity numbers if appropriate.

3. Draw vertical lines across the chart for each item.

4. Starting with number 1, begin comparing the activities. Can 

number 1 be done at the same time as number 5 or 6?

5. Draw horizontal lines to indicate which activities can be done 

simultaneously.

6. You now have an overview of your project giving you a starting 

point and time-saving measures to help you complete the project 

on time. 

 ACTIVITIES 1 2 3 4 5 6

1. Requirements are written

2. Finances are arranged

3. Bidding takes place

4. Contractor is selected

5. Prototype is built

6. Testing begins

ACTIVITIES

1. Requirements are written

2. Finances are arranged

3. Bidding takes place

4. Contractor is selected

5. Prototype is built

6. Testing begins