i
ii

INTRODUCTION 

TO DEFENSE 

ACQUISITION 

MANAGEMENT 

SIXTH EDITION


NOVEMBER 25, 2003 

PUBLISHED BY THE 

DEFENSE ACQUISITION UNIVERSITY PRESS 

FORT BELVOIR, VIRGINIA 
For sale by the U.S. Government Printing Office 

Superintendent of Documents, Mail Stop: SSOP, Washington, DC 20401-9328 

ISBN 0 - 16-048681-5 

iii 
PREFACE


This sixth edition of Introduction to Defense Acquisition Management 

provides an update of the regulatory framework from the May 2003, 

Department of Defense Directive 5000.1 and Department of Defense 

Instruction 5000.2, governing the defense acquisition system. In addition, information about the Joint Capabilities Integration and Development System from the June 2003 Chairman of the Joint Chiefs of Staff 

Instruction 3170.01C and information about the new Department of 

Defense Planning, Programming, Budgeting and Execution (PPBE) 

process are also provided. 

This publication is designed to be both a comprehensive introduction 

to the world of defense systems acquisition management for the newcomer and a summary-level refresher for the practitioner who has been 

away from the business for a few years. It focuses on Department of 

Defense-wide management policies and procedures, not on the details 

of any specific defense system. 

This publication is based on numerous source documents. For the reader 

who wishes to dig deeper into this complex area, a list of World Wide 

Web Internet sites is provided after the last chapter. 

Every attempt has been made to minimize acronyms. Commonly used 

terms are spelled out the first time they are used in each chapter. More 

difficult or rarely used terms are spelled out each time for ease of reading. 

We encourage your suggestions and comments. A postage-paid Customer Feedback form is provided at the back of this pamphlet for your 

convenience. Please take a few minutes to fill it out and help us improve our publication. 

C. B. Cochrane K. E. Sondheimer 

Director Special Publications Editor 

Center for Program Management DAU Press 

Curricula Development and 

Support Center 

Defense Acquisition University 

iv 
ACKNOWLEDGMENTS


The authors appreciate the comments of interested readers and Defense Acquisition University faculty in providing suggestions for this 

sixth edition of Introduction to Defense Acquisition Management. 

v 
TABLE OF CONTENTS


Chapter 1

BASICS ................................................................................................ 1


Definitions ...................................................................................... 1


The Role of the Congress, the Executive Branch, and


Industry in Defense Acquisition .............................................. 2


Executive Branch .................................................................. 3


The Congress ......................................................................... 3


Defense Industry .................................................................... 4


Successful Defense Acquisition Program ................................... 5


Authority for the Defense Acquisition System .......................... 6


Public Law .............................................................................. 6


Executive Direction ............................................................... 7


Chapter 2

THE ACQUISITION ENVIRONMENT .................................... 9


Transformation of the Department of Defense ........................ 9


Transforming How We Fight ................................................ 9


Transforming How We Do Business .................................. 1 0


Transforming How We Work With Others ........................ 1 1


Revolution in Military Affairs ................................................... 1 1


Joint Vision ................................................................................... 1 1


Acquisition Streamlining Initiatives ......................................... 1 2


Major Legislation ....................................................................... 1 3


Regulatory Reform ..................................................................... 1 4


Implementing Initiatives ............................................................ 1 4


Changes in Emphasis .................................................................. 1 6


vi 
Chapter 3

PROGRAM MANAGEMENT IN


Why is Program Management Used in


DEFENSE ACQUISITION .......................................................... 1 7


Program Manager ...................................................................... 1 7


Program Manager’s Perspective .............................................. 1 7


Program Management ............................................................... 1 8


Defense Acquisition? .......................................................... 1 9


Integrated Product and Process Development ....................... 1 9


The Program Manager and Integrated Product Teams ...... 1 9


Chapter 4

DEPARTMENT OF DEFENSE


ACQUISITION POLICY .............................................................. 2 1


Regulatory Documents ............................................................... 2 1


DoD Directive 5000.1 ......................................................... 2 1


DoD Instruction (DoDI) 5000.2 ......................................... 2 1


Three Major Decision Support Systems .................................. 2 2


Acquisition Categories ............................................................... 2 3


DoD Space Systems Acquisition Process ................................. 2 6


Acquisition, Technology and Logistics


Knowledge Sharing System .................................................... 2 6


Chapter 5

DEFENSE ACQUISITION MANAGEMENT—


KEY PERSONNEL AND ORGANIZATIONS ....................... 2 7


Background ................................................................................. 2 7


Packard Commission ........................................................... 2 7


Defense Management Review ............................................ 2 7


vii 
Chapter 5 

DEFENSE ACQUISITION MANAGEMENT—KEY 

PERSONNEL AND ORGANIZATIONS (continued) 

DoD Acquisition Authority Chain ............................................. 2 8


Program Executive Officers ................................................ 2 8


Acquisition Program Reporting .......................................... 2 8


Component Acquisition Executives ................................... 2 8


Component Chief Information Officers ............................ 3 0


Direct Reporting Program Managers ................................. 3 0


Under Secretary of Defense


(Acquisition, Technology and Logistics) ...................... 3 0


Defense Acquisition Boards and Councils ............................... 3 4


Integrated Product Teams ........................................................ 3 6


Component-level Oversight ....................................................... 3 8


Chapter 6


DETERMINING JOINT WARFIGHTING NEEDS ............. 3 9


Key Performance Parameters .................................................. 4 0


The JCIDS Process and Acquisition Decisions ....................... 4 0


Identifying Needed Capabilities ................................................ 4 1


The Sponsor ................................................................................. 4 3


Joint Potential Designators ....................................................... 4 4


Functional Capability Boards ................................................... 4 5


Interoperability ........................................................................... 4 6


Testing of C4I Interoperability Requirements ....................... 4 8


Chapter 7


ACQUISITION MANAGEMENT FRAMEWORK .............. 4 9


Acquisition Life Cycle ................................................................ 4 9


Pre-Systems Acquisition ............................................................. 5 2


Systems Acquisition ..................................................................... 5 3


Evolutionary Acquisition ........................................................... 5 7


Key Activities .............................................................................. 5 8


viii

Chapter 8

RESOURCE ALLOCATION PROCESS ................................. 63


The Four Phases of the Process ................................................ 6 3


Phase I – Planning, Programming, Budgeting, and


Execution (PPBE) Process ............................................. 6 4


Phase II – Enactment .......................................................... 6 8


Phase III – Apportionment ................................................. 6 8


Phase IV – Execution ......................................................... 6 8


INTERNET WORLD WIDE WEB LOCATIONS ................ 7 1


CUSTOMER FEEDBACK ........................................................... 7 3


ix 
1


BASICS


A basic understanding of the Department of Defense (DoD) acquisition system begins with the following overview: 

The Defense Acquisition System exists to manage the 

nation’s investments in technologies, programs, and product support necessary to achieve the National Security Strategy and support the United States Armed Forces. The investment strategy of the Department of Defense shall be 

postured to support not only today’s force, but also the next 

force, and future forces beyond that. The primary objective 

of defense acquisition is to acquire quality products that 

satisfy user needs with measurable improvements to mission 

capability and operational support, in a timely manner, and 

at a fair and reasonable price. (DoD Directive 5000.1) 

Definitions 

Acquisition includes design, engineering, test and evaluation, production, and operations and support of defense systems. As used herein, 

the term “defense acquisition” generally applies only to weapons and 

information technology systems, processes, procedures, services, and 

end products. The word procurement, which is the act of buying goods 

and services for the Government, is often (and mistakenly) considered 

synonymous with acquisition; it is, instead, but one of the many functions performed as part of the acquisition process. For example, nonweapon and non-information technology items required by the DoD, 

such as passenger vehicles, office supplies, and waste removal, are 

“procured”; they are not subject to the full range of functions inherent 

in the acquisition process of weapons and information technology systems and, thus, are not described in this publication. 

1

Acquisition programs are directed and funded efforts designed to provide a new, improved, or continuing materiel1

, weapon, or information 

system or service capability in response to an approved need. 

A weapon system is an item that can be used directly by the Armed 

Forces to carry out combat missions. 

Information technology systems include both National Security Systems 

and Automated Information Systems. Used for intelligence and cryptologic 

activities and command and control of military forces, national security 

systems are integral to a weapons system or critical to the direct fulfillment of a military or intelligence mission. Automated information systems are usually associated with the performance of routine administrative and business tasks such as payroll and accounting functions. 

Management includes a set of tasks required to accomplish a specified 

project. One way of looking at systems acquisition management is by 

looking at individual elements that comprise each of these terms as 

noted below: 

System Acquisition Management 

• Hardware • Design and develop system • Plan 

• Software • Test • Organize 

• Logistics Support • Produce • Staff 

– Manuals • Field • Control 

– Facilities • Support • Lead 

– Personnel • Improve or replace 

– Training • Dispose of 

– Spares 

The Role of the Congress, the Executive Branch, and 

Industry in Defense Acquisition 

At the national level, three major top-level participants in defense acquisition include the executive branch, the Congress, and defense industry. The perspectives, responsibilities, and objectives of these participants are summarized in this Chapter. 

1 Materiel is a generic word for equipment. It is inherently plural. It is distinguished from 

material, which is what things are made of. Material can be singular or plural. For example, aircraft 

are materiel; the materials aircraft are made of include aluminum, steel, and glass. 

2

Executive Branch 

Major participants who have major impact on defense acquisition programs within the executive branch include the President, the Office of 

Management and Budget, the National Security Council, and the Department of Defense. Chapter 5 contains a more detailed discussion of 

organizations and positions below this top level. 

Perspectives Responsibilities Objectives 

• Formulate, direct, & • Sign legislation into • Satisfy national 

execute national law (President) security objectives 

security policy • Commander-in-Chief • Maintain a balanced 

• Patriotism (President) force structure 

• Personal ambition • Negotiate with the • Field weapon systems 

• Reelection Congress to defeat threats to 

• Make decisions on national security 

major defense • Prevent undue 

acquisition programs congressional 

(Under Secretary of interest/scrutiny 

Defense (Acquisition, • Eliminate fraud, 

Technology and waste, and abuse 

Logistics)) in Federal 

• Issue directives/ procurement 

regulations 

• Contract with 

industry 

The Congress 

The legislative branch (Congress) includes the two committees that 

authorize Defense programs, the Senate Armed Services Committee 

and the House Armed Services Committee; the two committees that 

appropriate dollars for Defense programs, the House Appropriations 

Committee and Senate Appropriations Committee; the two committees that set spending limits for national defense, the Senate and House 

Budget Committees; various committees having legislative oversight 

3

of Defense activities; individual members of the Congress; the Congressional Budget Office; and the General Accounting Office. 

Perspectives Responsibilities Objectives 

• Constituent interests • Conduct hearings • Balance national 

• Two-party system • Raise revenue; security and social 

• Checks and balances allocate funds needs 

• Patriotism • Pass legislation • Distribute Federal 

• Personal ambition • Oversight and review dollars by district/state 

• Reelection • Maximize competition 

• Control industry profits 

• Control fraud, waste, 

and abuse 

Defense Industry 

Industry (contractors) includes large and small organizations (both U.S. 

and foreign) providing goods and services to the DoD. 

Perspectives Responsibilities Objectives 

• Stockholders’ interests • Respond to solicitations • Profit and growth 

• Capitalism • Propose solutions • Cash flow 

• Patriotism • Conduct independent • Market share 

research & development • Stability 

• Design, produce, • Technological 

support, and upgrade achievement 

defense systems 

Numerous external factors help shape and impact every acquisition 

program, creating an environment over which no single person has 

complete control. These factors include policies, decisions, reactions, 

emergencies, the media, public sentiment/emotions, world opinion, 

and the ever present (and changing) threats to national security. Often these factors work at opposite purposes. Understanding and dealing with the environment they create is one of the greatest challenges 

for defense program managers. Figure 1-1 illustrates some of the 

4

interrelationships among these key players. This figure also shows 

the program manager in the middle of a complex triangle of relationships, faced with the challenge of managing a defense acquisition 

program in the midst of many significant, diverse, and often competing interests. 

Figure 1-1. The Program Manager’s Environment 

Successful Defense Acquisition Program 

A successful defense acquisition program places a capable and supportable system in the hands of a user (the warfighter or those that 

support the warfighter) when and where it is needed and at an affordable price. The ideal outcome necessary for successful long-term relationships among the participants in defense acquisition is “Win-Win,” 

wherein each participant gains something of value for participating. 

5

Depending on your perspective, “success” can take many different 

forms. 

•	 For the Program Manager, success means a system that is delivered 

on time and within cost and meets the warfighter’s requirements. 

•	 For the Office of the Secretary of Defense, success means a program 

that satisfies national security objectives, provides a balanced force 

structure, and does not attract undue congressional scrutiny. 

•	 For the Congress, success means a system that strikes a balance 

between defense and social needs and provides a fair distribution 

of Defense dollars by state/district. 

•	 For industry, success means a program that provides a positive cash 

flow, offers a satisfactory return on investment, and preserves the 

contractor’s competitive position in the industry. 

•	 For the warfighter, success means a system that is effective in combat and easy to operate and maintain. 

Authority for the Defense Acquisition System 

The authority for DoD to conduct defense acquisition, i.e., to develop, produce, and field weapons and information technology systems, flows from two principal sources: public law (legal basis) and 

executive direction. Executive direction flows from the authority of 

the President and the Federal Government’s executive agencies to 

issue orders and regulations to both enforce and facilitate the law 

and to help carry out the constitutional duties of the executive 

branch. 

Public Law 

Statutory authority from the Congress provides the legal basis for systems acquisition. Some of the most prominent laws impacting the acquisition process follow: 

•	 Small Business Act (1963), as amended 

•	 Office of Federal Procurement Policy Act (1983), as amended 

6 
•	 Competition in Contracting Act (1984) 

•	 Department of Defense Procurement Reform Act (1985) 

•	 Department of Defense Reorganization Act of 1986 (GoldwaterNichols) 

•	 Government Performance and Results Act (1993) 

•	 Federal Acquisition Streamlining Act of 1994 

•	 Annual Authorization and Appropriations Legislation. Annual authorization and appropriation legislation may contain substantial new or 

amended statutory requirements (like the Clinger-Cohen Act of 1996). 

Most provisions of the laws listed above have been codified in Title 

10, United States Code, Armed Forces. 

Executive Direction 

Authority and guidance also come from the executive branch in the 

form of executive orders and national security decision directives 

issued by the President and other agency regulations. Examples of 

executive direction follow: 

•	 Executive Order 12352 (1982) directed procurement reforms and 

establishment of the Federal Acquisition Regulation (FAR). 

•	 Federal Acquisition Regulation (1984) provided uniform policies 

and procedures for the procurement of all goods and services by 

executive agencies of the Federal Government. Additional guidance for defense acquisition programs is provided in the DoD Federal Acquisition Regulation Supplement (DFARS). 

•	 National Security Decision Directive 219 (1986) directed implementation of recommendations made by the President’s Blue Ribbon Commission on Defense Management. 

•	 Executive Order 13101 (1998) implemented the provisions of the 

Resource Conservation and Recovery Act to ensure Federal agency 

7

use of environmentally preferable products and services and directed the use of cost-effective procurement preference programs 

(sometimes called “green procurement”) favoring the purchase of 

these products and services. 

•	 Office of Management and Budget Circular A-11 (2002) describes 

the process for preparation and submission of budget estimates; strategic plans; annual performance plans; and the planning, budgeting, 

and acquisition of capital assets for all executive departments. 

8

22


THE ACQUISITION


ENVIRONMENT


Transformation of the Department of Defense 

The war on terrorism has taught us that future threats to our national 

security may come from many diverse areas—domestic and international terrorists, computer hackers, state-sponsored subnational groups, 

nation-states, and others. 

To help prepare for an uncertain and dangerous future, the Transformation Planning Guidance2 for the Department provides a strategy for 

transforming “how we fight, how we do business, and how we work 

with others.” The guidance provides the strategic imperative for transformation: 

Transformation is necessary to ensure U.S. forces continue 

to operate from a position of overwhelming military advantage in support of strategic objectives. We cannot afford to react to threats slowly or have large forces tied 

down for lengthy periods. Our strategy requires transformed forces that can take action from a forward position 

and, rapidly reinforced from other areas, defeat adversaries swiftly and decisively while conducting an active defense of U.S. territory. 

Transforming How We Fight 

Transforming how we fight hinges on the development of future Joint 

warfighting concepts and includes the full range of military capability 

areas: Doctrine, Organization, Training, Materiel, Leadership, Personnel, 

2 Transformation Planning Guidance, Secretary of Defense Donald H. Rumsfeld, April 2003. 

9

and Facilities (DOTMLPF). Chapter 6, Joint Capabilities Integration 

and Development System, addresses the role of the acquisition workforce in DOTMLPF, specifically the acquisition of defense systems for 

the materiel capability area. The focus is on investing in capabilities 

based on Joint operating concepts. 

Transforming How We Do Business 

A priority for the transformation of the Department is the streamlining 

of the acquisition process. The latest acquisition policies and procedures, summarized in Chapters 4 and 6, provide insight on the implementation of evolutionary acquisition and spiral development to reduce cycle time and field an initial increment of warfighting capability 

as fast as possible. The Department has also aligned the acquisition 

process with a new capabilities-based resource allocation process (see 

Chapter 8). 

Most of the transformation tasks outlined in the Transformation Planning Guidance will impact the acquisition of defense systems in many 

ways. Some of these tasks are listed below: 

•	 Concept Development and Experimentation Programs was established by the combatant commands and the military services to conduct experiments to evaluate new Joint operating concepts. 

•	 Transformation Research, Development, Test and Evaluation. Starting in 2005, the Department will initiate research, development, 

test, and evaluation programs with “greater flexibility and rapidity.” 

•	 Joint Rapid Acquisition Programs. These initiatives are envisioned 

to grow out of the coevolution of Joint operating concepts and 

technologies in activities such as Joint warfare experiments, 

advanced technology demonstrations, and advanced concept technology demonstrations. Acquisition would be started in the current 

year with bridge funds to the planning, programming, budgeting, 

and execution process so initiatives are accelerated. 

•	 Transformation of Test and Evaluation. Joint test and evaluation is 

needed to determine if the integrated architectures that define the 

parameters of a Joint warfighting capability do, in fact, result in a 

viable application of those capabilities. 

10

Transforming How We Work With Others 

The defense acquisition process must support arrangements for international military cooperation so that U.S. warfighting capabilities can 

be applied effectively with the capabilities of our allied and coalition 

partners. 

Revolution in Military Affairs 

Many defense analysts believe the conduct of warfare is entering a 

period of fundamental change, literally a “revolution in military affairs,” driven by advances in information technology and precision 

guided weapons. Past experience suggests that revolutions in military affairs are not produced solely by rapid technological advancements but also require changes to prevailing operational concepts, 

doctrine, and force structure to fully harness the technology in a manner to dominate the battlefield. Coupled with the rise of new threats 

since the end of the cold war (international drug cartels, terrorism, 

regional warfare, chemical/biological agents, availability of missile 

technology, etc.), the United States has begun the process of transforming its forces to harness the revolution in military affairs, both to 

meet these new threats and to ensure it remains dominant on any 21st 

century battlefield. 

Joint Vision 

Joint Vision is the Chairman of the Joint Chiefs of Staff’s conceptual 

blueprint for future military operations. Joint Vision 2020, the latest 

version of the Joint Vision, provides a foundation for broad support of 

the “revolution in military affairs” through the creation and exploitation of information superiority. Central to the Chairman’s vision, the 

concept of “full-spectrum dominance” is achieved through the interdependent application of four operational concepts—dominant maneuver, precision engagement, focused logistics, and full-dimensional 

protection. Together, these four concepts provide Joint warfighters the 

means to fulfill their primary purpose—victory in war—as well as the 

capability to dominate an opponent across the full range of military operations. Achieving full-spectrum dominance also means building an 

integrated, complex set of systems, especially a command, control, communications, computers, intelligence, surveillance, and reconnaissance 

architecture (see Chapter 5). To fulfill the Chairman’s vision and the 

Military Service Chief’s companion vision, the research, development, 

11

and acquisition of future defense systems will be a challenge for the 

defense acquisition system outlined in this publication. 

Acquisition Streamlining Initiatives 

There have been many attempts to reform the Federal Government’s 

acquisition process over time. However, in the early 1990s it became 

clear that the rapidly changing threat environment, reduced resources, 

and changes in technology development required permanent changes 

in the way DoD acquired defense systems. 

Perhaps the most notable changes in defense systems acquisition were 

caused by the collapse of the Soviet Union and the September 11, 2001, 

terrorist attacks on the World Trade Center and the Pentagon. These major 

world events impacted national objectives, treaties, budgets, and alliances. While the specter of strategic thermonuclear war lessened, the 

probability of regional conflicts and policing actions increased. Domestic terrorism, information warfare, and narcotics control are becoming 

increasingly troublesome threats to national security, and the Department is playing an ever-increasing role in confronting these issues. 

The defense industrial base has gone through a metamorphosis. Weaker 

competitors have merged with stronger companies or have dropped 

out of the market. The remaining large contractors are positioning themselves with other major contractors to compete for the remaining defense contracts. For example, in 1982 there were ten major U.S. producers of fixed-wing military aircraft. By 1998, there were only three: 

Boeing, Lockheed-Martin, and Northrop-Grumman. As a result of this 

reduced industrial base, the Department is working to bring about greater 

civilian/military industrial integration. 

Given the changes in the threat and the fast pace of technological advances in the commercial market, there was a real need to access technology before potential adversaries could buy it. Therefore, the Department fundamentally had to change the way it acquired systems, 

i.e., more efficient and effective ways to acquire goods and services 

faster, better, and cheaper. This led to the following major “events” 

that provided the foundation for streamlining the acquisition process: 

•	 Section 800 Panel Report (1993). This report was the result of congressional direction to the Under Secretary of Defense (Acquisition, Technology and Logistics) to review all DoD procurement laws 

12

“with a view toward streamlining the Defense acquisition process.” 

It recommended over 400 changes to existing laws and regulations. 

The report was intended not only to implement reforms recommended in several previous studies but also provide a framework 

for continuous improvements in acquisition practices. 

•	 Secretary of Defense Perry’s “Acquisition Reform—A Mandate for 

Change” (February 1994). This paper lists the key reasons why 

change in acquisition is imperative and outlines methods to make 

the most impact through change. This led to the formal beginning 

of regulatory reform in DoD. 

Major legislation, regulatory reform, and a series of implementing initiatives has helped to institutionalize better business practices within 

the Department of Defense. 

Major Legislation 

Federal Acquisition Streamlining Act (FASA) 1994. This legislation 

on procurement reform implemented many of the recommendations 

of the Section 800 Panel Report. The FASA repealed or substantially 

modified over 225 provisions of law primarily dealing with contracting and procurement matters. Notable features of this legislation include an emphasis on the use of commercial versus military specifications, encouragement of electronic commerce, and requirements to use 

past performance when evaluating contractor proposals. 

The Federal Acquisition Reform Act (FARA) (1996). A follow-up to 

FASA, FARA (Division D of the FY 1996 National Defense Authorization Act) covers some of the Section 800 Panel acquisition reform recommendations that were not covered in FASA. Some of the more interesting issues covered include exceptions for commercial item acquisitions, 

the Truth in Negotiations Act, and Cost Accounting Standards. 

Information Technology Management Reform Act (ITMRA) (1996). 

ITMRA was enacted as Division E of the FY 1996 National Defense 

Authorization Act. This act requires greater accountability for system 

improvements achieved through Information Technology (IT). Among 

other things, the act streamlines both protest and acquisition procedures for IT systems by identifying the General Accounting Office as 

the single agency for protests and by repealing the Brooks Act, which 

originally targeted mainframes and imposed cumbersome regulations on 

13

purchasing computers since the 1960s. It also addresses the issue of 

rapidly changing technology by requiring modular contracting with increments delivered within 18 months of contract award. Note: FARA 

and ITMRA were combined and are known, together, as the “ClingerCohen Act,” in honor of the congressional sponsors responsible for this 

change. 

Regulatory Reform 

Provisions of the Federal Acquisition Streamlining Act, the Clinger-Cohen 

Act, and recommendations of the various process action teams (convened during the 1990s) were implemented in changes to the Federal 

Acquisition Regulation and its Defense supplement and DoD directives, 

instructions, and regulations for systems acquisition. (The Federal Acquisition Regulation was mentioned in Chapter 1; regulatory provisions 

will be covered in Chapter 4.) 

Implementing Initiatives 

Implementing initiatives must work together to support objectives of 

acquiring defense systems better, faster, and cheaper. The following items, 

though not all-inclusive, capture the essence of the major thrusts of acquisition streamlining within the DoD: 

Alternative Dispute Resolution. To facilitate resolution of differences 

between the government and its contractors without going into a formal 

protest or litigation process, alternative dispute resolution provides voluntary procedures to resolve issues in controversy. These procedures 

may include, but are not limited to, conciliation, facilitation, mediation, 

fact finding, arbitration, and use of ombudsmen. 

Advanced Concept Technology Demonstrations. To provide opportunities to try out mature technology directly with the warfighters, advanced 

concept technology demonstrations allow operational forces to experiment with new technology in the field to evaluate potential changes to 

doctrine, operational concepts, tactics, modernization plans, and training. Following a successful advanced concept technology demonstration, the system may enter the acquisition process at whatever point 

good judgment dictates. 

Best Value Contracting. DoD seeks to award contracts based on the best 

overall value. This means that the Department considers all relevant 

14

factors, such as cost, performance, quality, and schedule, and making 

potential tradeoffs between cost and non-cost factors rather than just 

buying from the lowest cost, technically acceptable offeror. 

Commercial Items and Practices. Maximizing the use of commercial 

items takes advantage of the innovation offered by the commercial marketplace and ensures access to the latest technology and a broader vendor base. DoD is also encouraging defense contractors to move to commercial practices that will enhance their global competitiveness. The 

Department’s goal is to establish partnerships with industry to create 

advanced products and systems with common technological bases and 

to allow production of low-volume defense-unique items on the same 

lines with high-volume commercial items. 

Evolutionary Acquisition is the preferred strategy for the rapid acquisition of mature technology for the user. An evolutionary approach delivers capability in militarily useful increments and recognizes, up front, 

the need for future capability improvements. The objective is to balance 

needs and available capability with resources and to put capability into 

the hands of the user quickly. 

Integrated Product Teams and Integrated Product and Process Development are two closely intertwined initiatives that are replacing traditionally adversarial relationships among key players (users, acquirers, 

testers, funds managers, contractors, and other stakeholders) with cooperation and teamwork to improve product quality and supportability. 

Logistics Transformation will transform DoD’s mass logistics system to 

a highly agile, reliable system that delivers logistics on demand. Logistics reform will move toward performance-based support and link modern warfighting and modern business practices. The commercial marketplace demonstrates that product support can be optimized to create a 

strategic advantage by focusing on customer service, integrated supply 

chains, rapid transportation, and electronic commerce. When applied to 

defense, this equates to integrated logistics chains focused on readiness 

and rapid service to the warfighter. 

Open Systems. Designing open systems and specifying interface standards enhance interoperability, both among the Services and with our 

allies. Applying widely used interface standards in weapons systems 

will enable multiple sources of supply and technology insertion and allow for upgrading through spares. 

15

Price or Cost as an Independent Variable is used to develop strategies 

for acquiring and operating affordable systems by setting aggressive, 

achievable price or cost objectives and managing achievement of these 

objectives. Through cost performance integrated product team participation, key stakeholders (users, industry, etc.) help set and achieve cost 

objectives by identifying potential tradeoffs early in the acquisition process. Price is preferred over cost as the independent variable when there 

is a high degree of competition, a high level of confidence that the price 

is fair and reasonable, and the technical risk is acceptable. 

Performance-based Services Acquisition. As services become an increasingly significant element of what DoD buys, steps are being taken 

to ensure they are acquired effectively and efficiently. Service requirements must be stated using results required and not methods for performance of the work. 

Specifications and Standards Reform. In mid-1994, Secretary of Defense Perry approved a new major policy for use of specifications and 

standards for defense systems acquisition contracts. In this policy, the 

first choice is the use of performance specifications. Design-specific 

specifications and standards are authorized only as a last resort, and 

their use requires a waiver. 

There are many more initiatives in place as well as new ones being tested 

throughout the Department. These initiatives will help America acquire 

quality defense systems faster and cheaper—essential capabilities for 

this country to maintain the world’s best warfighting forces. 

Changes in Emphasis 

The cultural shifts in the acquisition process may be characterized by 

the following chart: 

Characteristics of defense systems Today the emphasis has shifted 

acquisition in the past included: toward: 

• Many new systems • Fewer new systems; modified legacy systems 

• Focus on nuclear warfare • Conventional warfare 

• Technology-driven systems • Affordability-driven systems 

• Service-specific programs • Joint programs 

• Military-unique technology • Commercial and dual-use technology 

• Technology development • Technology insertion 

16

3


PROGRAM


MANAGEMENT IN


DEFENSE ACQUISITION


Program Manager 

Department of Defense (DoD) policy requires that a program manager be 

designated for each acquisition program. The role of the program manager3

 is to direct the development, production, and initial deployment (as 

a minimum) of a new defense system. This must be done within limits of 

cost, schedule, and performance, as approved by the program manager’s 

acquisition executive (see Chapter 5). As the agent of the military service 

or Defense agency in the defense acquisition system, the program 

manager’s role is to ensure the warfighter’s modernization requirements 

are met efficiently and effectively in the shortest possible time. 

The designated individual with responsibility for and authority to accomplish program objectives for development, 

production, and sustainment to meet the user’s operational 

needs. The Program Manager shall be accountable for credible cost, schedule, and performance reporting to the Milestone Decision Authority. (DoDD 5000.1) 

Program Manager’s Perspective 

The effective program manager should have the “big picture” perspective of the program, including in-depth knowledge of the interrelationships among its elements. An effective program manager: 

3 The title, “Program Manager,” is used broadly here. Some DoD Components use different titles. 

For example, the Army uses “project” and “product” manager depending on the authorized rank 

of the position. 

17

•	 is a leader and a manager, not primarily a task “doer”; 

•	 understands the requirements, environmental factors, organizations, 

activities, constraints, risks, and motivations impacting the program; 

•	 knows and is capable of working within the established framework, managerial systems, and processes that provide funding and 

other decisions for the program to proceed; 

•	 comprehends and puts to use the basic skills of management— 

planning, organizing, staffing, leading, and controlling—so people 

and systems harmonize to produce the desired results; 

•	 coordinates the work of defense industry contractors, consultants, 

in-house engineers and logisticians, contracting officers, and others, whether assigned directly to the program office or supporting 

it through some form of integrated product team or matrix support 

arrangement; 

•	 builds support for the program and monitors reactions and perceptions that help or impede progress; and 

•	 serves both the military needs of the user in the field and the priority and funding constraints imposed by managers in the Pentagon 

and military service/Defense agency headquarters. 

Program Management 

The process whereby a single leader exercises centralized authority and responsibility for planning, organizing, staffing, 

controlling, and leading the combined efforts of participating/ 

assigned civilian and military personnel and organizations, 

for the management of a specific defense acquisition program 

or programs, through development, production, deployment, 

operations, support, and disposal. (DAU Glossary) 

Program management must first take into account diverse interests 

and points of view. Second, it facilitates tailoring the management 

18

system and techniques to the uniqueness of the program. Third, it 

represents integration of a complex system of differing but related 

functional disciplines4

 that must work together to achieve program 

goals. 

Why is Program Management Used in Defense Acquisition? 

Program management provides for a single point of contact, the program manager, who is the major force for directing the system through 

its evolution, including design, development, production, deployment, operations and support, and disposal. The program manager, 

while perhaps being unable to control the external environment, has 

management authority over business and technical aspects of a specific program. The program manager has only one responsibility— 

managing the program—and accountability is clear. Defense industry typically follows a management process similar to that used by 

DoD. Often contractors will staff and operate their program office to 

parallel that of the government program they support. 

Integrated Product and Process Development 

Integrated product and process development is a management process that integrates all activities from the concept of a new defense 

system through the entire life cycle (see Chapter 7) using multidisciplinary teams called integrated product teams. 

The Program Manager and Integrated Product Teams 

An integrated product team is composed of representatives from all 

appropriate functional disciplines working together with a team leader 

to facilitate management of acquisition programs. Integrated product 

teams exist at the oversight and review levels (see Chapter 5) as well 

as at the program office level. Program office-level integrated product teams may be structured around the major design aspects of the 

system under development, such as an “engine Integrated Product 

Team” or processes such as a “test Integrated Product Team.” Following contract award, program-level integrated product teams often 

include contractor participation. 

4 Functional disciplines refer to business and financial management, logistics, systems engineering, software management, test and evaluation, manufacturing management, and others. 

19

The DoD has recognized the importance of integrated product teams 

as a means to aid the program manager and as a way to streamline the 

decision process. By working as part of cross-functional teams, issues 

can be identified and resolved more quickly, and stakeholder involvement in the overall success of the program can be maximized. In this 

way the program manager capitalizes on the strengths of all the stakeholders in the defense acquisition system. 

20

4


DEPARTMENT


OF DEFENSE


ACQUISITION POLICY


Regulatory Documents 

Two major Department of Defense (DoD) regulatory documents guide 

the management of defense acquisition: 

DoD Directive 5000.1 

The Defense Acquisition System, approved by the Deputy Secretary of 

Defense, provides a basic set of definitions and three overarching policies that govern the defense acquisition system: flexibility, responsiveness, and innovation. In addition, a minimum set of more detailed policies is provided in a tightly structured format for ease of reading and 

understanding. 

DoD Instruction (DoDI) 5000.2 

Operation of the Defense Acquisition System, approved by the Under 

Secretary (Acquisition, Technology and Logistics), the Assistant Secretary of Defense (Networks and Information Integration), and the 

DoD Director, Operational Test and Evaluation, establishes a simplified and flexible management framework for translating mission needs 

and technological opportunities into stable, affordable, and well-managed acquisition programs. DoDI 5000.2 establishes a general approach for managing all defense acquisition programs while authorizing the program manger and the Milestone Decision Authority to 

exercise discretion and prudent business judgement to structure a 

tailored, responsive, and innovative program. The Defense Acquisi21

Figure 4-1. Three Major Decision Support Systems 

tion University groups oversight of the acquisition process into three 

primary decision support systems: the Joint Capabilities Integration 

and Development System (JCIDS); the Defense Acquisition System; 

and the Planning, Programming, Budgeting and Execution (PPBE) process. The three oversight groups are depicted in Figure 4-1. 

Three Major Decision Support Systems 

These three decision support systems must interface on a regular basis 

to enable the leadership to make informed decisions regarding the best 

allocation of scarce resources. This publication discusses these decision support systems in Chapters 6, 7, and 8, respectively. 

22

The Joint Capabilities Integration and Development System, governed by Chairman of the Joint Chiefs of Staff Instruction 3170.01C, 

is the system that results in identifying and documenting warfighting 

needs, i.e., mission deficiencies or technological opportunities. 

The “Defense Acquisition System,” governed by the DoD 5000 series of regulatory documents, establishes a management framework 

for translating the needs of the warfighter and technological opportunities into reliable, affordable, and sustainable systems. 

The Planning, Programming, Budgeting and Execution Process, governed by DoD Directive 7045.14, prescribes the process for making 

decisions on funding for every element of the Department, including 

acquisition programs. 

Acquisition Categories 

For management purposes, all defense acquisition programs fall into 

one of the Acquisition Categories (ACATs) shown in Figure 4-2 on 

Page 25. The ACAT level is principally based on their dollar value 

and level of Milestone Decision Authority. The chain of authority 

and organizational players affecting various ACATs are discussed in 

Chapter 5. 

Major Defense Acquisition Programs (MDAP) are ACAT I programs. 

There are two subcategories of ACAT I programs: 

•	 ACAT ID. The Milestone Decision Authority is the Under Secretary of Defense (Acquisition, Technology and Logistics) 

(USD(AT&L)). The “D” in ACAT ID refers to the Defense Acquisition Board. These programs require a review by an Office of the 

Secretary of Defense Overarching Integrated Product Team and 

the Defense Acquisition Board. The USD(AT&L), as the Defense 

Acquisition Executive, makes the final decision. 

•	 ACAT IC, for which the Milestone Decision Authority is the Component5 Acquisition Executive (CAE). The “C” in ACAT IC refers 

5 DoD Components are the military departments, Defense agencies and unified commands. Only 

one unified command has an acquisition executive, the U.S. Special Operations Command. 

23

to Component. Each of the Components has its own process for 

headquarters review of these programs prior to a milestone decision by the Component Acquisition Executive. 

Major automated information system acquisition programs are ACAT 

IA programs. There are two subcategories of ACAT IA programs: 

•	 ACAT IAM, for which the Milestone Decision Authority is the Assistant Secretary of Defense (Networks and Information Integration). 

The “M” in IAM refers to major automated information systems 

reviewed by the Information Technology Acquisition Board. Final 

decision authority lies with the assistant secretary who is also the 

Chief Information Officer (CIO) of the DoD. 

•	 ACAT IAC, for which the Milestone Decision Authority is delegated 

to the Component. The “C” in IAC refers to Component. After the 

appropriate headquarters review, the Component Acquisition Executive, advised by the Component CIO, makes the final milestone 

decision. 

ACAT II programs are those programs that do not meet the criteria for 

an ACAT I program but do meet the criteria for a major system. The 

Milestone Decision Authority for these programs is also the Component Acquisition Executive. The review process for these programs is 

similar to that of ACAT IC programs. 

ACAT III programs are those programs that do not meet the criteria for 

ACAT I, ACAT IA, or ACAT II. The Milestone Decision Authority is 

designated by the Component Acquisition Executive. Milestone decisions for these programs are typically made at the level of the Program 

Executive Officer or Systems Command (Navy and Marine Corps), 

Major Subordinate Command (Army), or Product or Air Logistics Center 

(Air Force) level. This category also includes nonmajor automated information system acquisition programs. 

ACAT IV programs have been retained as a designation for internal use 

by the Departments of the Army and Navy. 

24

ACAT ID: • Designated by USD(AT&L) 

Major • Defense Acquisition Board Review 

Defense • Decision by USD(AT&L) $365M RDT&E or 

Acquisition $2.19B Procurement 

Programs ACAT IC: • Designated by USD(AT&L) (FY 2000 Constant $) 

• Component-level Review 

• Decision by Component 

ACAT IAM: • Designated by DoD Chief 

Information Officer 

Major 

Automated 

Information 

• Information Technology 

Acquisition Board Review 

• Decision by DoD Chief 

Information Officer 

Systems 

Acquisition 

Programs 

ACAT IAC: • Designated by DoD Chief 

Information Officer 

• Component-level Review 

• Decision by Component 

Acquisition Executive 

$378M Life Cycle Cost or 

$126M Total Prog. Cost or 

$32M Prog. Cost 

in any Single Year 

(FY 2000 Constant $) 

ACAT II: • Designated by Component 

Major Acquisition Executive 

Systems • Component-level Review 

• Decision by Component 

Acquisition Executive 

All Other ACAT III: • Designated IAW Component Policy 

Systems • Does Not Meet Criteria for ACAT I, No Fiscal 

(Except for IA, II, or III Criteria 

Army Navy, • Review and Decision at Lowest 

USMC) Appropriate Level 

$140M RDT&E or 

$660M Procurement 

(FY 2000 Constant $) 

Army 

Navy 

USMC 

ACAT IV: • Designated IAW Component Policy 

• Does Not Meet Criteria for ACAT I, 

IA, II, or III 

• Review and Decision at Lowest 

Appropriate Level 

See AR 70-1 (Army) & 

SECNAVINST 5000.2C 

(Navy and Marine Corps) 

Figure 4-2. Acquisition Categories 

25

DoD Space Systems Acquisition Process 

Management oversight of national security space systems has been 

delegated to the Under Secretary of the Air Force. “National Security 

Space Acquisition Policy 03-01,” October 6, 2003, provides policies 

and procedures for oversight of space-based systems (satellites), groundbased systems (satellite command and control and other ground stations), satellite launch systems (boosters and space launch facilities) 

and user equipment. This policy generally parallels that of the DoD 

5000 documents mentioned earlier, with slightly different terms and 

streamlined processes appropriate for high technology, small quantity 

space systems. 

Acquisition, Technology and 

Logistics Knowledge Sharing System 

In addition to the regulatory documents mentioned previously and 

throughout this publication, the Acquisition, Technology and Logistics 

Knowledge Sharing System (AKSS) can be accessed over the Internet 

at http://www.deskbook.osd.mil. AKSS, with links to acquisition-related communities of practice, various acquisition commands/organizations, and valuable reference material, provides a complete Webbased source of information for the acquisition community. 

26

5


DEFENSE ACQUISITION


MANAGEMENT—KEY


PERSONNEL AND


ORGANIZATIONS


Background 

Packard Commission 

The President’s Blue Ribbon Commission on Defense Management, chaired 

by former Deputy Secretary of Defense David Packard, conducted a comprehensive review of the overall defense acquisition system. Reporting to 

President Reagan in early 1986, the Packard Commission recommended 

creation of a single top-level Defense Acquisition Executive responsible 

for the defense acquisition process, the Under Secretary of Defense (Acquisition, Technology and Logistics), and establishment of a streamlined 

reporting chain for program managers of major defense acquisition programs to that top-level executive. President Reagan approved the 

Commission’s recommendations and directed their implementation in 

National Security Decision Directive 219 on April 1, 1986. 

Defense Management Review 

A follow-on assessment of defense acquisition management was initiated by President Bush in 1989. The report of the Defense Management 

Review reiterated the Packard Commission findings and reinforced 

the importance of the streamlined reporting chain for all program managers. This reporting chain provides for no more than two levels of 

management oversight between the program manager and the Milestone Decision Authority for all acquisition programs. The reporting 

27

chain for any particular program is a function of the program’s size 

and Acquisition Category (ACAT). (See Chapter 4 for a discussion of 

ACATs.) 

This structure provides a clear line of authority, running from the Under Secretary of Defense (Acquisition, Technology and Logistics) 

(USD(AT&L)) through Component Acquisition Executives and Program Executive Officers to the individual program managers of ACAT 

ID programs. For ACAT IAM programs, the Assistant Secretary of Defense (Networks and Information Integration) (ASD(NII)), as the Department of Defense (DoD) Chief Information Officer, serves as the 

Milestone Decision Authority. 

DoD Acquisition Authority Chain 

Program Executive Officers 

The position of Program Executive Officer (PEO) was established in 

1986 based on the Packard Commission Report. A PEO is typically a 

one- or two-star general officer or senior executive service civilian 

equivalent responsible for the first-line supervision of a group of like 

programs, each managed by a program manager. Examples are the 

Army’s PEO for Tactical Missiles, the Navy’s PEO for Tactical Aircraft Programs, and the Air Force’s PEO for Fighters and Bombers. 

The number of PEOs varies by Service and time, but typically the 

Services have between six and ten Program Executive Officers at 

any one time. 

Acquisition Program Reporting 

The reporting structure for ACAT ID and ACAT IAM acquisition programs is illustrated in Figure 5-1. 

Component Acquisition Executives 

The senior official in each DoD Component responsible for acquisition matters is known as the Component Acquisition Executive (CAE). 

The CAE is the Secretary of the military department or the head of 

the Defense agency and has power of redelegation. In the military 

departments, the Secretaries have delegated this responsibility to 

the Assistant Secretary level, commonly called the Service Acquisition Executives (SAEs). The SAE for the Army is the Assistant Secre28

tary of the Army for Acquisition, Logistics and Technology. The Department of the Navy SAE (includes Marine Corps) is the Assistant 

Secretary of the Navy for Research, Development, and Acquisition. 

The SAE for the Air Force is the Assistant Secretary of the Air Force 

for Acquisition. The SAE reports to the Secretary administratively 

and to the USD(AT&L) for acquisition management matters. Each 

SAE also serves as the Senior Procurement Executive for their military department. In this capacity, they are responsible for management 

direction of their respective Service procurement system. The United 

States Special Operations Command also has an acquisition executive. 

Figure 5-1. DoD Acquisition Authority Chain 

ACAT ID programs reviewed by the USD(AT&L) and programs reviewed by the Components follow the same basic management oversight process, but the final decision authority is at a lower level for the 

latter programs. Similarly, ACAT IAM programs reviewed by the Assistant Secretary of Defense for Networks and Information Integration 

and automated information system acquisition programs reviewed by 

29

the Components follow the same basic management oversight process, but the final decision authority is at the lower level for the latter 

programs. 

Component Chief Information Officers 

The DoD Components each have Chief Information Officers that 

provide advice and assistance to the Component Acquisition Executive for the oversight and review of automated information systems acquisition programs. The Department of the Army Chief Information Officer is the G-6 who reports to the Secretary of the 

Army and the Army Chief of Staff. The Department of the Navy 

Chief Information Officer reports to the Secretary of the Navy and 

has a deputy for Navy matters in the Office of the Chief of Naval 

Operations and a deputy for Marine Corps matters located in Headquarters, U.S. Marine Corps. In the Department of the Air Force, 

the Chief Information Officer reports to the Secretary of the Air 

Force. 

Direct Reporting Program Managers 

Some program managers do not report to a Program Executive Officer 

but, instead, report directly to the Component Acquisition Executive. 

These direct reporting program managers are typically one- or two-star 

officers or senior executive service civilian equivalents who manage 

priority programs of such a nature that direct access to the Component 

Acquisition Executive is deemed appropriate. Examples are the Department of the Army’s program managers for Biological Defense and 

Chemical Demilitarization and the Department of the Navy’s program 

managers for Strategic Systems and the Advanced Amphibious Assault 

Vehicle Program. 

Under Secretary of Defense (Acquisition, Technology and 

Logistics) 

Title 10, United States Code, §133, authorizes the position of Under 

Secretary of Defense (Acquisition, Technology and Logistics) 

(USD(AT&L)). The USD(AT&L) is the Principal Staff Assistant and 

30

advisor to the Secretary and Deputy Secretary of Defense for all matters relating to the DoD acquisition system; research and development; advanced technology; developmental test and evaluation; production; logistics; installation management; military construction; 

procurement; environmental security; and nuclear, chemical, and biological matters. The USD(AT&L) serves as the Defense Acquisition 

Executive and, for acquisition matters, takes precedence over the 

Secretaries of the military departments. The USD(AT&L) is responsible for establishing acquisition policies and procedures for the Department and, as chair of the Defense Acquisition Board, makes milestone decisions on ACAT ID programs. The USD(AT&L) also 

establishes policy for the training and career development of the defense acquisition workforce. 

The Office of the USD(AT&L) has the following four major subordinate staff elements: 

•	 Principal Deputy USD(AT&L) serves as chief advisor to USD(AT&L), 

acts in the USD(AT&L)’s absence, and supervises the following: 

– Deputy Under Secretary for Industrial Policy 

– Deputy Under Secretary for International Technology Security 

– Director, Defense Procurement & Acquisition Policy 

– Director, Defense Systems 

– Director, Small and Disadvantaged Business Utilization 

– Director, Defense Contract Management Agency 

•	 Director, Defense Research and Engineering is principal advisor to 

the USD(AT&L) for scientific and technical matters, responsible for 

oversight of DoD science and technology programs, and supervises 

the following: 

– Deputy Under Secretary for Advanced Systems and Concepts 

– Deputy Under Secretary for Science and Technology 

– Deputy Under Secretary for Laboratory and Basic Sciences 

– Director, Defense Advanced Research Projects Agency 

31

•	 Deputy Under Secretary of Defense for Logistics and Materiel Readiness oversees policy for acquisition logistics, readiness, maintenance 

and transportation, and supervises the following: 

– Assistant Deputy Under Secretary for Supply Chain Integration 

– Assistant Deputy Under Secretary for Maintenance Policy 

– Assistant Deputy Under Secretary for Transportation Policy 

– Assistant Deputy Under Secretary for Logistics Systems


Management


– Assistant Deputy Under Secretary for Logistics Plans and


Programs


– Director, Defense Logistics Agency 

•	 Assistant to the Secretary of Defense, Nuclear & Chemical & 

Biological (ATSD(NCB)) Defense Programs. The ATSD(NCB) is the 

principal staff assistant and advisor to the Secretary and Deputy 

Secretary of Defense and the USD(AT&L) for all matters concerning the formulation of policy and plans for nuclear, chemical, and 

biological weapons. The ATSD(NCB) also is directly responsible 

to the Secretary and Deputy Secretary of Defense for matters associated with nuclear weapons safety and security, chemical weapons demilitarization, chemical and biological defense programs, 

and smoke and obscurants. The ATSD(NCB) supervises the following: 

– Deputy Assistant to the Secretary of Defense, Nuclear Matters 

– Deputy Assistant to the Secretary of Defense, Chemical/


Biological Defense


– Deputy Assistant to the Secretary of Defense, Nuclear Treaty 

Program 

– Director, Defense Threat Reduction Agency 

Other officials that report directly to the USD(AT&L) include: 

– Deputy Under Secretary, Installations and Environment 

– Director, International Cooperation 

– Director, Acquisition Resources and Analysis 

– Executive Director, Defense Science Board 

– Director, Special Programs 

– Director, Missile Defense Agency 

32 
Some of the above officials deal with program managers, Program 

Executive Officers, and Component Acquisition Executives on a regular basis, for example: 

•	 Director, Defense Procurement and Acquisition Policy. Oversees 

contracting policy and procedures; chairs the Defense Acquisition 

Regulatory Council, which issues the Defense Federal Acquisition 

Regulation Supplement; represents the USD(AT&L) on the Federal 

Acquisition Regulatory Council; provides the chair of the Defense 

Acquisition Policy Working Group, which oversees the DoD 5000 

series of acquisition regulations; and has responsibility for the education and training of the acquisition, technology and logistics workforce. 

•	 Director, Acquisition Resources and Analysis. Oversees the Defense 

Acquisition Executive Summary and Earned Value Management 

System processes and provides the Executive Secretariat for the 

Defense Acquisition Board. 

•	 Director, Defense Systems. Responsible for review of ACAT ID programs prior to the Defense Acquisition Board and chairs the weapon 

systems overarching integrated product teams that advise the Defense Acquisition Board. 

In addition to the above, several other offices play a critical role in 

defense acquisition management. These include: 

•	 Assistant Secretary of Defense (Networks and Information Integration). As the Chief Information Officer for DoD, responsible for 

command, control, communications, computers, intelligence, surveillance and reconnaissance architecture, policies, and procedures; 

serves as the Department’s Milestone Decision Authority for ACAT 

IAM acquisition programs; and establishes acquisition policies for 

information technology systems. 

•	 Director, Operational Test and Evaluation. Responsible for operational and live fire test and evaluation policy and procedures and 

analyzes results of operational test and evaluation conducted on 

ACAT I programs and other selected programs deemed of a high 

33

enough priority to be selected for Defense-level oversight. The incumbent reports on results of testing ACAT I programs to the Secretary of Defense, the USD(AT&L), and the Senate and House Committees on Authorizations and Appropriations as to whether test 

results indicate the system is operationally effective and suitable. 

This office also renders a live fire test and evaluation report to the 

Secretary of Defense, the USD(AT&L), and the Senate and House 

Committees on Authorizations and Appropriations on whether covered systems (primarily ACAT I and ACAT II systems) meet survivability and lethality requirements. 

For acquisition-related duties and responsibilities pertaining to the Under 

Secretary of Defense (Policy), Under Secretary of Defense (Comptroller), and Director, Program Analysis and Evaluation, see Chapter 8. 

Defense Acquisition Boards and Councils 

Several boards/councils are also key players in defense acquisition. 

These include: 

Defense Acquisition Board (DAB). The DAB is the senior-level Defense forum for advising the USD(AT&L) on critical issues concerning 

ACAT ID programs. Formal meetings may be held at each milestone to 

review accomplishments of the previous phase and assess readiness to 

proceed into the next phase. The DAB is issue-oriented. Typical issues 

addressed by this board include cost growth, schedule delays, and technical threshold breaches. The result of a DAB review is a decision 

from the USD(AT&L), documented in an Acquisition Decision Memorandum (ADM). 

Defense Acquisition Board members include: 

– Under Secretary of Defense (Acquisition, Technology and 

Logistics), Chairman 

– Vice Chairman, Joints Chiefs of Staff, Cochairman 

– Under Secretary of Defense (Comptroller) 

– Under Secretary of Defense (Policy) 

– Under Secretary of Defense (Personnel and Readiness) 

– Assistant Secretary of Defense (Networks and Information 

Integration) 

– Director, Operational Test and Evaluation 

– Secretaries of the Army, the Navy, and the Air Force 

34 
Information Technology Acquisition Board (ITAB). The ITAB advises 

the Assistant Secretary of Defense (Networks and Information Integration) (ASD(NII))/DoD CIO on critical acquisition decisions for ACAT 

IAM programs. These reviews enable the execution of the DoD CIO’s 

acquisition-related responsibilities for information technology systems, 

under the Clinger-Cohen Act and Title 10 of the United States Code. An 

Acquisition Decision Memorandum (ADM) documents the decision(s) 

resulting from the review. 

Defense Space Acquisition Board (DSAB). The DoD Space Milestone 

Decision Authority (MDA), the Under Secretary of the Air Force, convenes a DSAB at each space program decision point to obtain advice 

and information necessary to support the decision whether or not to 

proceed into the next acquisition phase. The DoD Space MDA chairs 

the DSAB, and the Vice Chairman of the Joint Chiefs of Staff is the 

Cochair. The DSAB Executive Secretary (Director, National Security 

Space Integration) facilitates the preparation for, and execution of, the 

DSAB meeting. DSAB principals are advisors and representatives of 

entities who have a material interest in the program under consideration. Their role is to act in an advisory capacity to the DSAB Chairman. The DoD Space MDA is the sole decision maker for a DSAB. 

Joint Requirements Oversight Council (JROC). The JROC leads the 

Joint Staff in developing policies and procedures for determining warfighting capability needs and validates and approves warfighting capability needs for ACAT I and ACAT IA programs. The JROC is chaired 

by the Vice Chairman of the Joint Chiefs of Staff and includes the 

following members: 

– Vice Chief of Staff, U.S. Army 

– Vice Chief of Naval Operations 

– Vice Chief of Staff, U.S. Air Force 

– Assistant Commandant, U.S. Marine Corps 

In addition to his role as chair of the JROC, the Vice Chairman also 

serves as cochair of the Defense Acquisition Board and is a member of 

the Defense Resources Board. 

Cost Analysis Improvement Group (CAIG). This group provides the 

USD(AT&L) an Independent Cost Estimate of the life cycle cost for 

ACAT I acquisition programs. It is also responsible for improving cost 

estimating techniques and practices. 

35

 Integrated Product Teams 

The Defense Integrated Product Team (IPT) concept was adapted from 

commercial business to streamline an antiquated, inefficient stove-piped 

process. These teams are composed of stakeholders representing all 

appropriate functional disciplines working together to build successful 

programs and, thereby, enable decision makers to make the right decisions at the right time. Each IPT operates under the following broad 

principles: 

• Open discussions with no secrets 

• Qualified, empowered team members 

• Consistent, success-oriented, proactive participation 

• Continuous “up-the-line” communications 

• Reasoned disagreement 

• Issues raised and resolved early 

For ACAT ID and ACAT IAM programs, two levels of IPTs are generally above the program office—an Overarching Integrated Product 

Team (OIPT) at the Office of the Secretary of Defense and Workinglevel IPTs (WIPTs) at the headquarters of the military department. The 

following paragraphs discuss the roles and responsibilities of these 

IPTs in the defense acquisition system. 

Overarching Integrated Product Teams (OIPTs). Each ACAT ID program is assigned to an OIPT for management oversight. The primary 

role of this team is to provide strategic guidance and to help resolve 

issues early as a program proceeds through its acquisition life cycle. 

OIPTs for weapons systems are headed by the USD(AT&L)’s Director, Defense Systems. OIPTs for Command, Control, Communications & Intelligence (C3I) and major automated information systems 

are headed by an official from the Office of the Assistant Secretary of 

Defense (Networks and Information Integration) (OASD(NII)). 

36

OIPT members include the program manager, the Program Executive 

Officer, Component staff, USD(AT&L) staff, the Joint Staff, and other 

Defense staff principals or their representatives, involved in oversight and review of a particular ACAT ID or ACAT IAM program. 

OIPTs meet as required and convene in formal session two weeks in 

advance of an anticipated milestone decision to assess information 

and to provide the status of the program to the Milestone Decision 

Authority. 

Working-level Integrated Product Teams (WIPTs). The WIPTs are 

formed at the Pentagon-level military department headquarters. They 

meet as required to assist the program manager with planning, preparation for OIPT reviews, and to help resolve issues. The leader of 

each WIPT is usually the program manager or the program manager’s 

representative. While there is no one-size-fits-all approach, WIPTs 

must adhere to three basic tenets: 

1. The program manager is in charge of the program. 

2. Integrated product teams are advisory bodies to the program 

manager. 

3. Direct communication among the program office and all levels in 

the acquisition oversight and review process is expected as a means 

of exchanging information and building trust. 

The program manager, or designee, may form and lead a type of 

WIPT called an Integrating IPT (IIPT), composed of a member from 

each of the other WIPTs. This team supports the development of strategies for acquisition and contracts, cost estimates, evaluation of alternatives, logistics management, cost-performance tradeoffs, etc. The 

IIPT also coordinates the activities of the other WIPTs and ensures 

that issues not formally addressed by those teams are reviewed. 

The following examples of working-level integrated product teams 

are offered as illustrations: 

•	 Test Strategy Integrated Product Team. The purpose of this integrated product team is to assist in outlining the Test and Evaluation 

Master Plan (TEMP) for a major program. The objective of such an 

integrated product team is to reach agreement on the strategy and 

plan by identifying and resolving issues early; understanding the 

37

issues and the rationale for the approach; and, finally, documenting 

a quality TEMP that is acceptable to all organizational levels the 

first time. 

•	 Cost/Performance Integrated Product Team (CPIPT). The best time 

to reduce life-cycle costs is early in the acquisition process. Cost 

reductions must be accomplished through cost/performance tradeoff 

analyses that are conducted before an acquisition approach is finalized. To facilitate that process, each ACAT I and ACAT IA program 

should establish a CPIPT. The user community should have representation on this team. 

Component-level Oversight 

Each military service and Defense agency has its own oversight and 

review process, which parallels the DAB and IT OIPT processes. These 

processes are used for managing nonmajor programs and for reviewing ACAT ID or ACAT IAM programs prior to a program or milestone 

review at the Defense level. The following is a summary of the individual military department Pentagon headquarters-level reviews and 

their respective chair. ACAT III and IV programs are reviewed in a 

similar fashion by the Program Executive Officers or the Commander 

of an acquisition command. 

Service-level Review: Chaired By: 

•	 Army Systems Acquisition Review • Assistant Secretary of the Army


Council
 (Acquisition, Logistics and Technology) 

• Program Decision Meeting (Navy) •	 Assistant Secretary of the Navy 

(Research, Development and Acquisition) 

• Program Decision Meeting • Assistant Secretary of the Navy


(Marine Corps)
 (Research, Development and Acquisition) 

•	 As Necessary •	 Assistant Secretary of the Air Force 

(Acquisition) 

38

66


DETERMINING


JOINT WARFIGHTING


NEEDS


This Chapter focuses on a capabilities-based approach to identifying 

current and future gaps in the ability to carry out Joint warfighting 

missions and functions. This process is called the Joint Capabilities 

Integration and Development System (JCIDS). In 2003, JCIDS replaced the requirements generation system used by the Department 

of Defense (DoD) for many decades. JCIDS involves an analysis of 

Doctrine, Organization, Training, Materiel, Leadership, Personnel and 

Facilities (DOTMLPF) in an integrated, collaborative process to define gaps in warfighting capabilities and propose solutions. Chairman of the Joint Chiefs of Staff Instruction (CJCSI) 3170.01C, Joint 

Capabilities Integration and Development System, provides the policy 

and top-level description of JCIDS. The details for action officers 

who will be performing the day-to-day work of identifying, describing, and justifying warfighting capabilities is provided by CJCS 

Manual 3170.01, Operation of the Joint Capabilities Integration and 

Development System. 

Four JCIDS documents are used in DoD to support the acquisition 

process. The Initial Capabilities Document (ICD) provides the definition of the capability need and where it fits in the broader concepts 

and architectures. The ICD is used to support the Concept Decision 

and Milestone A decisions and to guide the Concept Refinement and 

the Technology Development phases of the acquisition process. 

During the Technology Development phase, a Capability Development Document (CDD) is written. The CDD supports a Milestone B 

39

decision by providing more detail on the materiel solution to provide 

the capability previously described in the ICD. The CDD also provides the thresholds and objectives for the system attributes against 

which the delivered capability will be measured. Once approved, the 

CDD is used to guide the System Development and Demonstration 

phase of the acquisition process. 

During the System Development and Demonstration (SDD) phase, 

the Capability Production Document (CPD) is developed. The CPD 

is used to support the Milestone C decision before a program enters 

low-rate initial production and initial operational test and evaluation. 

The CPD may contain refined performance thresholds from the CDD 

based on lessons learned during the System Development and Demonstration phase. 

JCIDS will retain the use of the Capstone Requirements Document 

(CRD) until the operational concepts and integrated architectures, 

upon which the JCIDS analysis are based, become fully mature. The 

CRD is only written as directed by the Joint Requirements Oversight 

Council (JROC). (The JROC was discussed in Chapter 5.) The CRD 

contains capabilities-based requirements that facilitate the development of CDDs and CPDs by providing a common framework and 

operational concept for a family-of-systems or systems-of-systems. 

The CRD’s primary focus is to influence system development to ensure that the systems are conceived and developed to optimize Joint 

capabilities. 

Key Performance Parameters 

Key Performance Parameters (KPPs) are those attributes or performance characteristics considered most essential for an effective 

military capability. The CDD and the CPD both contain KPPs that are 

included in the acquisition program baseline (APB). (See Chapter 7 

for information on the APB.) Either the JROC or the DoD Component 

validate the KPPs, depending on the Joint Potential Designator (JPB) 

of the program, which is discussed later. 

The JCIDS Process and Acquisition Decisions 

The link of the JCIDS process to acquisition milestones is shown in 

Figure 6-1. More information on milestones and phases is provided in 

Chapter 7. 

40

MS-A Decision

--

i

Gui

l 

I

I ial ies 

ili

Document 

ili

Document 

MS 

il 

DAB i

ITAB I l i

IOC 

MS-A

JCIDS ANALYSIS

IS 

ICD CDD MS-C 

DAB/ 

MS-B ion IS 

DAB/ DAB/ IS 

Strategic Pol cy 

dance 

Joint Operating Concepts 

Joint Functiona Concepts 

ntegrated Architectures 

CD -- Init Capabilit

Document 

CDD -- Capab ty Development 

CPD -- Capab ty Production 

-- Milestone 

JROC -- Joint Requirements Oversight Counc

-- Defense Acquisit on Board 

nformation Techno ogy Acquisit on Board REFINE ANALYS

JROC JROC JROC 

CPD 

ITAB 

Concept 

Decis

REFINE ANALYS

ITAB 

REFINE ANALYS

ITAB 

Figure 6-1. Mission Need Determination 

Identifying Needed Capabilities 

The capabilities identification and assessment methodology is the backbone of the JCIDS process. (See Figure 6-2 on the following page.) It is 

a top-down approach starting with strategic policy and guidance from 

the President and the Chairman, Joint Chiefs of Staff. The President’s 

National Security Strategy, issued annually by the White House, 

provides the Chairman top-level policy upon which to base the national 

military strategy. The National Military Strategy, issued as needed 

by the Joint Staff, articulates the Chairman’s recommendations to the 

President and Secretary of Defense on the employment of the military element of power in support of the President’s National Security 

Strategy. Joint Vision describes the Chairman’s operational concepts 

41

i

Guidance 

i i i

i

i l

I

ili

( IDS) is 

Trai l, 

l ition 

ity 

Process 

l l

Non-materiel / 

More of Ex sting 

Systems/Spares/ 

Manpower/etc. 

Strategic Policy 

Pres dent & Chairman, Jo nt Ch efs of Staff 

Joint Operations Concepts 

Joint Operat ng Concepts 

Joint Funct ona Concepts 

ntegrated Architectures 

Joint Capab ty Integration & 

Development System 

JC Analys

Doctrine, Organization, 

ning, Materie

Leadership & Education, 

Personnel, and Facilities 

Change Recommendations 

CJCSI 3180 Process 

Materie

Changes 

CJCSI 3170 Process 

Initial 

Capabilities 

Document 

Initial 

Capabilities 

Document 

Acquis

Activ

DoD 5000 

Sponsor 

Step 1. Functional Area Analysis 

Step 2. Functional Needs Analysis 

Step 3. Functiona Solutions Ana ysis 

Step 4. Independent Assessment 

Figure 6-2. Joint Capabilities Integration & Development System 

and capabilities anticipated of future Joint forces. It provides a conceptual template for the military departments, combatant commands, Defense agencies, and the Joint Staff as they develop plans and programs 

to evolve the Joint force to meet future warfighting requirements. 

Based on this top-level strategic policy and guidance, the Joint Staff 

prepares JCIDS supporting documents to refine the guidance into 

more detailed concepts and architectures that sponsors can use as a 

basis for the JCIDS analysis. Joint Operations Concepts describe 

how the Joint Forces intends to operate 15 to 20 years from now. 

The Joint Operating Concept describes how the future Joint Forces 

commander will plan, prepare, deploy, employ, and sustain Joint 

Forces against potential adversaries’ capabilities or in crisis situations and guide the development and integration of Joint functional 

concepts to provide Joint capabilities. The Joint Functional Concept describes how a future Joint Forces commander will integrate 

a set of related military tasks to attain capabilities required across 

42

the range of military operations. Integrated Architectures consist 

of multiple views or perspectives (operational, systems, technical) 

that facilitate integration and promote interoperability across family-of-systems and systems-of-systems and compatibility among related architectures. 

The Sponsor 

In the JCIDS, the sponsor “is the DoD Component responsible for all 

common documentation, periodic reporting, and funding actions required to support the capabilities development and acquisition process for a specific capability proposal.” The Training and Doctrine 

Command in the Army, the Center for Naval Analysis and/or the Office of the Chief of Naval Operations staff in the Navy, the Marine 

Corps Combat Developments Command in the Marine Corps, and 

the operational commands (e.g., Air Combat Command or Air Mobility Command), supported by the Office of Aerospace Studies in the Air 

Force, are typical sponsors of JCIDS analysis. 

JCIDS Analysis. The JCIDS supporting documents provide sponsors 

a common Joint warfighting construct upon which to base their JCIDS 

analysis to determine capabilities needed for Joint Forces and information for the development of the ICD. JCIDS analysis (Figure 6-2) is a 

four-step process; each step is led by the sponsor. 

1. Functional Area Analysis (FAA). The first step in the JCIDS process 

is the FAA. The FAA identifies the operational tasks, conditions, 

and standards needed to accomplish military objectives. The results 

of the FAA are the required warfighting tasks to be reviewed in a 

follow-on functional needs analysis. 

2. Functional Needs Analysis (FNA). The second step is to assess the 

ability of current and programmed Joint capabilities to accomplish 

the required warfighting tasks identified in the FAA. The result of 

the FNA is a list of capability gaps that require solutions. 

3. Functional Solutions Analysis (FSA). The third step in JCIDS analysis is an operationally based assessment of Doctrine, Organization, 

Training, Materiel, Leadership, Personnel, and Facilities (DOTMLPF); 

this assessment determines approaches for solving one or more of 

the capability gaps identified in the FNA. The result is a set of 

43

potential materiel and non-materiel approaches to fixing the capability gaps. If the sponsor determines a limited DOTMLPF approach 

can address the capability need, the appropriate military department 

will be notified to take action through the process outlined in CJCS 

Instruction 3180.01.6

 On the other hand, if the sponsor determines 

a new defense acquisition program may be required, further analysis will be done to identify alternative ideas for materiel approaches. 

Next, an analysis of these alternatives will be performed to provide 

a prioritized list or combinations of approaches considering technological maturity, risk, supportability, and affordability. 

4. Post-independent Analysis. The final step in JCIDS analysis is the 

post-independent analysis. Here, the sponsor will consider all the 

analysis results to determine which integrated DOTMLPF 

approach(es) best address the gap(s) in required Joint warfighting 

capability. This information will be compiled into an appropriate 

recommendation—either a DOTMLPF Change Recommendation or 

an ICD. 

Joint Potential Designators 

Within JCIDS a proposal can receive four designations based on its 

Acquisition Category (ACAT) and its potential for impacting the Joint 

warfighter. The Joint designation determines who validates and/or approves a proposal. Joint Potential Designators (JPDs) are: JROC Interest, Joint Impact, Joint Integration, and Independent. 

JROC Interest applies to all ACAT I and IA programs and any other 

programs that the JROC decides to review regardless of acquisition category. JROC Interest proposals will be validated and approved by the 

JROC before being returned to the sponsor for further action. 

Joint Impact is assigned to ACAT II and below proposals that have 

significant impact on the Joint Forces but do not require JROC oversight. Joint Impact proposals will be validated by the Functional 

Capabilities Board and returned to the sponsor for approval and 

action. 

6 CJCS Instruction 3180.01, JROC Programmatic Processes for Joint Experimentation and Joint 

Resource Recommendations, provides guidance on addressing DOTMLPF changes not associated 

with a new defense acquisition program. 

44

Joint Integration applies to those ACAT II and below proposals that 

require intelligence, munitions, or interoperability certifications. Joint 

Integration proposals will be submitted through the Joint Staff certification process before being returned to the sponsor for validation and approval. 

Independent is assigned to those proposals that have no direct impact 

on the Joint warfighter. These proposals are returned to the sponsor for 

further action. 

Functional Capability Boards 

The JROC charters Functional Capability Boards (FCBs) responsible 

for the organization, analysis, and prioritization of Joint warfighting 

capabilities within an assigned functional area. As of the date of this 

guidebook, the JROC had chartered FCBs for Force Application, 

Protection, Command and Control, Battlespace Awareness, and Focused Logistics. In addition to the review and validation of JCIDS 

documents shown in Figure 6-3, FCBs are responsible for all aspects, 

materiel and nonmaterial, of their assigned functional area. 

Figure 6-3. Joint Capabilities Integration & Development System Documents 

45

Interoperability 

Interoperability is the ability of systems, units, or forces to provide 

data, information, materiel, and services to, and accept services from, 

other systems, units, or forces. It is also the ability to use the services 

that are exchanged to enable them to operate effectively together. All 

defense systems must be interoperable with other U.S. and allied defense systems, as defined in the JCIDS and interoperability documents. 

The Program Manager (PM) describes the treatment of interoperability 

requirements in the acquisition strategy. In an evolutionary acquisition 

involving successive increments of increasing capability, this description should address each increment, as well as the transitions from 

increment to increment. Chapter 7 will explain the evolutionary acquisition process in more detail. 

Consistent with the Department’s philosophy of treating new systems 

as components of a family-of-systems, if enhancements to the PM’s 

program or to other programs are required to support interoperability 

requirements, the PM must identify the technical, schedule, and funding issues for both the acquisition program and the other program(s). 

Some examples of interoperability include: 

•	 Aircraft from different Services and allied countries can communicate with each other and with ground forces. 

•	 Aircraft from one Service can exchange target information with a 

ship of another Service and/or an allied country. 

•	 Ammunition from one Service can be used by weapons from another Service, and/or an allied country. 

As shown in Figure 6-4 on the following page, Command, Control, 

Communications, Computers and Intelligence (C4I) interoperability 

issues affect all kinds of systems. When applied to communicationselectronics systems or items, interoperability means information can 

be exchanged directly and satisfactorily between systems and items of 

equipment. 

46

Figure 6-4. Command, Control, Communications, Computers and 

Intelligence Interoperability 

C4I interoperability policy affects both kinds of Information Technology systems—automated information systems, which normally satisfy 

business and/or administrative requirements like the information systems used in the Defense Commissary System; and C4I systems, which 

are used to assist the commander in organizing, directing, and controlling warfighting forces. 

Achievement of seamless interoperability among all defense C4I systems is of the highest priority. To this end, the DoD published the Command, Control, Communications, Computer, Intelligence, Surveillance, 

and Reconnaissance Architecture Framework. This framework establishes the strategic direction for all defense command, control, communication, computer, intelligence, surveillance and reconnaissance 

architectures. 

47

Testing of C4I Interoperability Requirements 

All C4I systems that have Joint interoperability requirements, regardless of ACAT, must be tested and certified by the Joint Interoperability Test Command. To conserve resources, this testing should be performed during developmental and operational testing whenever 

possible. The Director, Defense Information Systems Agency certifies whether a system meets its interoperability requirements based 

on results of the testing. 

48

7


ACQUISITION


MANAGEMENT


FRAMEWORK


Acquisition Life Cycle 

The management framework for defense systems acquisition is commonly referred to as the acquisition life cycle. The generic model for this 

process is illustrated in Figure 7-1. Program managers tailor/streamline 

A B IOC

Production & Deployment 

Pre-Systems Acquisition Systems Acquisition 

C 

Technology Opportunities and 

User Needs 

Concept 

Refinement 

Technology 

Development 

Low Rate 

Initial Prod 

Full-Rate Prod 

& Deployment 

System Development 

& Demonstration 

System 

Integration 

System 

Demonstration 

Design 

Readiness 

Review 

Full Rate 

Production 

Decision 

Review 

Operations 

& Support 

Sustainment 

Disposal 

IOC: Initial Operational Capability 

FOC: Full Operational Capability 

Initial Capabilities 

Document (ICD) 

Capability Development 

Document (CDD) 

Capability Production 

Document (CPD) 

Concept 

Decision 

• 

• 

• 

• Process entry at Milestones A, B, or C 

Entrance criteria met before enteri

Evolutionary Acquisition or Single Step to Fu

Capability 

•

•

ng phases 

ll 

FOC 

Sustainment 

Relationship to Requirements Process 

Figure 7-1. Defense Acquisition Management Framework 

49 
this model to the maximum extent possible, consistent with technical 

risk, to provide new systems to the warfighter as fast as possible. The 

process provides for multiple entry points consistent with a program’s 

technical maturity, validated requirements, and funding. Entrance 

criteria for each phase of the life cycle guide the Milestone Decision 

Authority in determining the appropriate point for a program to enter 

the acquisition process. 

The life cycle process consists of periods of time called phases separated by decision points called milestones. Some phases are divided 

into two efforts that are separated by program reviews. These milestones and other decision points provide both the program manager 

and milestone decision authorities the framework with which to review acquisition programs, monitor and administer progress, identify problems, and make corrections. The Milestone Decision Authority will approve entrance into the appropriate phase or effort of 

the acquisition process by signing an Acquisition Decision Memorandum upon completion of a successful decision review. 

The life cycle of a program begins with planning to satisfy a mission 

need before the program officially begins (see Chapter 6). Program 

initiation normally occurs at Milestone B. The life cycle process takes 

the program through research, development, production, deployment, 

support, upgrade, and finally, demilitarization and disposal. Initial 

Operational Capability (IOC)7

 is that point at which a selected number of operational forces have received the new system and are capable of conducting and supporting warfighting operations. References to “life cycle costs” in defense acquisition include all costs 

associated with the system from the “cradle to the grave.” 

Technological Opportunities and User Needs. The Defense Science 

and Technology Program identifies and explores technological opportunities within DoD. The aim is to provide the user with innovative war-winning capabilities and reduce the risk associated with promising technologies before they are introduced into the acquisition 

system. Three mechanisms are available to facilitate the transition of 

innovative concepts and superior technology to the acquisition 

7 IOC is the first attainment of the capability to effectively employ a weapon, item of equipment, 

or system by an adequately trained, equipped, and supported military unit or force. 

50

process: (1) Advanced Technology Demonstrations, (2) Advanced Concept 

Technology Demonstrations, and (3) Joint Warfighting Experiments. 

Advanced Technology Demonstrators are used to demonstrate technical maturity and the potential for enhanced military capability or 

cost effectiveness. They are subject to oversight and review at the 

Service or Component level. An Advanced Technology Demonstrator can become the basis for a new acquisition program or for the 

insertion of new technology into an existing program. 

Advanced Concept Technology Demonstrators are used to demonstrate the military utility of a proven technology and to develop the 

concept of operations for the system to be demonstrated. Consequently, these demonstrators are typically funded and engineered to 

endure up to two years of service in the field before entering the 

acquisition process. Oversight and review of Advanced Concept Technology Demonstrators is performed at the Office of the Secretary of 

Defense and the Joint Staff levels. 

Experiments, such as the warfighting experiments conduced by the 

military services and the Joint Forces Command, are used to develop 

and assess concept-based hypotheses to identify and recommend the 

best value-added solutions for changes to doctrine, organizational 

structure, training and education, materiel, leadership, and people 

required to achieve significant advances in future Joint operational 

capabilities. They are also subject to oversight and review at the military department headquarters, and the Office of the Secretary of Defense and Joint Staff. 

The following discussion provides a brief review of each of the phases, 

milestones, and other decision reviews. No “one size fits all.” Each 

program structure must be based on that program’s unique set of 

requirements and available technology. The process of adjusting the 

life cycle to fit a particular set of programmatic circumstances is often referred to as “tailoring.” The number of phases, key activities, 

and decision points are tailored by the program manager based on an 

objective assessment of the program’s technical maturity and risks 

and the urgency of the mission need. 

51

Milestone decisions are made by the appropriate Milestone Decision 

Authority (MDA) depending on the acquisition category (ACAT) of 

the program. (See Chapter 5.) Prior to each decision point, the appropriate Joint Capabilities Integration and Development System (JCIDS) 

document must be approved. (See Chapter 6.) 

Pre-Systems Acquisition 

Pre-systems acquisition is composed of activities in development of 

user needs, in science and technology, and in technology development work specific to the refinement of materiel solution(s) identified in the approved Initial Capabilities Document (ICD). Two phases 

comprise pre-systems acquisition: Concept Refinement and Technology Development. 

Concept Refinement begins with a Concept Decision by the Milestone 

Decision Authority. During this phase a Technology Development Strategy (TDS) is developed to help guide the efforts during the next phase, 

Technology Development. Also, a study called an Analysis of Alternatives (AoA) is conducted to refine the selected concept documented in 

the approved ICD. To achieve the best possible system solution, Concept Refinement places emphasis on innovation and competition and 

on existing commercial off-the-shelf and other solutions drawn from a 

diversified range of large and small businesses. Concept Refinement 

ends when the Milestone Decision Authority approves the preferred 

solution supported by the AoA and approves the associated TDS. 

Technology Development begins after a Milestone A decision by the 

Milestone Decision Authority approving the TDS. The ICD and TDS 

guide the work during Technology Development. A favorable 

Milestone A decision normally does not mean that a new acquisition 

program has been initiated. For shipbuilding, however, programs may 

be initiated at the beginning of Technology Development. The purpose of this phase is to reduce technology risk and to determine the 

appropriate set of technologies to be integrated into a full system. 

During Technology Development a series of technology demonstrations may be conducted to help the user and the developer agree on 

an affordable, militarily useful solution based on mature technology. 

The project is ready to leave this phase when the technology for an 

52

affordable increment of a militarily useful capability has been demonstrated in a relevant environment 

Systems Acquisition 

Milestone B. Milestone B will normally be program initiation for defense acquisition programs. For shipbuilding programs, the lead ship 

in a class of ships is also approved at Milestone B. Each increment of 

an evolutionary acquisition (explained later) will have its own Milestone B. Before making a decision, the Milestone Decision Authority 

will confirm that technology is mature enough for systems-level development to begin, the appropriate document from the Joint Capabilities 

Integration and Development System (JCIDS—see Chapter 6) has been 

approved, and funds are in the budget and the out-year program for 

all current and future efforts necessary to carry out the acquisition 

strategy. At Milestone B, the Milestone Decision Authority approves 

the acquisition strategy and the acquisition program baseline and 

authorizes entry into the System Development and Demonstration 

Phase. 

System Development and Demonstration Phase. Entrance criteria for 

this phase are technology (including software) maturity, funding, and 

an approved JCIDS document—the Capability Development Document. Programs that enter the acquisition process for the first time at 

Milestone B must have an Initial Capabilities Document (ICD) and a 

Capability Development Document. Unless there is some overriding 

factor, the maturity of the technology will determine the path to be 

followed by the program. Programs entering at Milestone B must 

have both a system architecture (defined set of subsystems making 

up the system) and an operational architecture (description of how 

this system interacts with other systems to include passing of data). 

The efforts of this phase are guided by the Key Performance Parameters (KPPs) found in the approved Capability Development Document and in the Acquisition Program Baseline (APB). The APB establishes program goals, called thresholds and objectives, for cost, 

schedule, and performance parameters that describe the program over 

its life cycle. This phase typically contains two efforts: Systems Integration and Systems Demonstration. A Design Readiness Review takes 

place at the end of Systems Integration. 

53

•	 Systems Integration. A program enters System Integration when 

the program manager has a technical solution for the system, but 

the Component subsystems have not yet been integrated into a 

complete system. This effort typically includes the demonstration 

of prototype articles or engineering development models (EDM), 

sometimes in a competitive “fly-off.” A program leaves System 

Integration after prototypes have been demonstrated in a relevant 

environment (e.g., a first flight or interoperable data flow across 

system boundaries), the system configuration has been documented, and a successful Design Readiness Review has been completed. 

•	 Design Readiness Review. During SDD the Design Readiness Review provides an opportunity for a mid-phase assessment of design maturity as evidenced by measures such as the number of 

design reviews successfully completed; the percentage of drawings completed; planned corrective actions to hardware/software 

deficiencies; adequate developmental testing; and an assessment 

of environment, safety, and occupational health risks; etc. Successful completion of the Design Readiness Review ends System 

Integration and continues the SDD phase into the System Demonstration effort. 

•	 Systems Demonstration. This effort is intended to demonstrate the 

ability of the system to operate in a useful way consistent with the 

approved KPPs. The program enters System Demonstration when 

the PM has demonstrated the system in prototypes or EDMs. This 

effort ends when the system is demonstrated (using EDMs in its 

intended environment); measured satisfactorily against the KPPs; 

and determined to meet or exceed exit criteria and Milestone C 

entrance requirements. Industrial capabilities must also be reasonably available. Developmental test and evaluation is conducted 

to assess technical progress against critical technical parameters, 

and operational assessments are conducted to demonstrate readiness for production. The completion of this phase is dependent 

on a Milestone Decision Authority decision to commit the program to production at Milestone C or to end the effort. 

54

Milestone C. The Milestone Decision Authority makes the decision 

to commit the Department of Defense to production at Milestone C. 

Milestone C authorizes entry into Low Rate Initial Production (LRIP) 

or into production or procurement for systems that do not require 

LRIP. Milestone C authorizes limited deployment in support of operational testing for major automated information systems or softwareintensive systems with no production components. If Milestone C is 

LRIP approval, a subsequent review and decision authorizes full rate 

production. 

Production and Deployment Phase. The purpose of this phase is to 

achieve an operational capability that satisfies mission needs. Operational test and evaluation determines the effectiveness and suitability 

of the system. Entrance into this phase depends on acceptable performance in development, test and evaluation, and operational assessment; mature software capability; no significant manufacturing risks; 

manufacturing processes under control (if Milestone C is full rate production); an approved ICD (if Milestone C is program initiation); an 

approved Capability Production Document (CPD); acceptable interoperability; acceptable operational supportability; and demonstration that 

the system is affordable throughout the life cycle, optimally funded, 

and properly phased for rapid acquisition. For most defense acquisition programs, Production and Deployment has two major efforts: Low 

Rate Initial Production and Full Rate Production and Deployment. It 

also includes a Full Rate Production Decision Review. 

•	 Low Rate Initial Production. This effort is intended to result in 

completion of manufacturing development to ensure adequate and 

efficient manufacturing capability; produce the minimum quantity necessary to provide production or production-representative 

articles for IOT&E; establish an initial production base for the system; and permit an orderly increase in the production rate sufficient to lead to full rate production upon successful completion of 

operational and, where applicable, live-fire testing. The Milestone 

Decision Authority determines the LRIP quantity for ACAT I and 

II programs at Milestone B. LRIP is not applicable to automated 

information systems or software-intensive systems with no developmental hardware; however, a limited deployment phase may be 

applicable. LRIP for ships and satellites is the production of items 

55

at the minimum quantity and rate that is feasible and that preserves the mobilization production base for that system. 

•	 Full Rate Production Decision Review. Before granting a favorable Full Rate Production Decision Review, the Milestone Decision Authority considers initial operational test and evaluation and 

live fire test and evaluation results (if applicable); demonstrated 

interoperability; supportability; cost and manpower estimates; and 

command, control, communications, computer, and intelligence 

supportability and certification (if applicable). A favorable Full 

Rate Production Decision authorizes the program to proceed into 

the Full Rate Production and Deployment portion of the Production and Deployment Phase. 

•	 Full Rate Production and Deployment. The system is produced 

and delivered to the field for operational use. During this phase, 

the program manager must ensure that systems are produced at an 

economical rate and deployed in accordance with the user’s requirement to meet the initial operational capability requirement 

specified in the Capability Production Document. Follow-on Operational Test and Evaluation may also be conducted, if appropriate, to confirm operational effectiveness and suitability or verify 

the correction of deficiencies. Operations and support begins as 

soon as the first systems are fielded/deployed; therefore, the Production and Deployment Phase overlaps the next phase—Operations and Support. 

Operations and Support Phase. During this phase full operational 

capability is achieved, each element of logistics support is evaluated (e.g., supply, maintenance, training, technical data, support 

equipment), and operational readiness is assessed. Logistics and 

readiness concerns dominate this phase. The supportability concept may rely on a government activity, a commercial vendor, or a 

combination of both to provide support over the life of the system. 

System status is monitored to ensure the system continues to meet 

the user’s needs. The operations and support phase includes sustainment and disposal. 

•	 Sustainment. Sustainment includes supply, maintenance, transportation, sustaining engineering, data management, configuration management, manpower, personnel, training, habitability, survivability, 

56

environment, safety (including explosives safety), occupational 

health, protection of critical program information, anti-tamper provisions, and information technology (including National Security 

Systems (NSS) supportability and interoperability functions). Effective sustainment of weapon systems begins with the design and 

development of reliable and maintainable systems through the continuous application of a robust systems engineering methodology. 

The program manager works with the users to document performance and support requirements in performance agreements 

specifying objective outcomes, measures, resource commitments, 

and stakeholder responsibilities. System modifications are made, 

as necessary, to improve performance and reduce ownership 

costs. Product improvement programs or service life extension 

programs may be initiated as a result of experience with the systems in the field. During deployment and throughout operational 

support, the potential for modifications to the fielded system 

continues. Modifications that are of sufficient cost and complexity to qualify as ACAT I or ACAT IA programs are considered as 

separate acquisition efforts for management purposes. Modifications that do not cross the ACAT I or ACAT IA threshold are 

considered part of the program being modified. 

•	 Disposal of the system occurs at the end of its useful life. The 

program manager should have planned for disposal early in the 

system’s life cycle and ensured that system disposal minimizes 

DoD’s liability due to environmental safety, security, and health 

issues. Environmental considerations are particularly critical during disposal as there may be international treaty or other legal 

considerations requiring intensive management of the system’s 

demilitarization and disposal. 

Evolutionary Acquisition 

Evolutionary acquisition is the preferred DoD acquisition strategy 

for rapid acquisition of mature technology. The acquisition strategy 

defines what approach will be followed to develop, test, produce, 

and field the system. An evolutionary approach delivers capability in 

increments, recognizing, up front, the need for future capability improvements. The objective is to balance needs and available capability with resources and to put capability into the hands of the warfighter quickly. The approaches to achieve evolutionary acquisition 

57

require collaboration between the user, tester, and developer, including 

the following processes: 

•	 Spiral Development. In this process, a desired capability is identified, but the total “end-state” requirements are not known at program initiation. Those requirements are refined through demonstration and risk management; and user feedback is continuous. Each 

increment provides the user the best possible capability. The requirements for future increments depend on feedback from users 

and technology maturation. 

•	 Incremental Development. In this process, a desired capability is 

identified, the end-state requirement is known, and that requirement 

is met over time by developing several increments, each dependent 

on available mature technology. 

Key Activities 

All acquisition programs, regardless of Acquisition Category (ACAT), 

must accomplish certain key activities. These activities generate information that structures and defines the program and facilitates planning and control by the program manager and oversight by a Milestone Decision Authority. The information generated by key activities 

may be contained in stand-alone documents structured in accordance 

with the desires of the Milestone Decision Authority. Most of this 

information/documentation is carefully constructed by the program 

manager using integrated product teams. 

Key activities include development/update and approval of JCIDS 

documents, cost estimating, formulation of an acquisition strategy 

and program structure, contract planning and management, budget 

execution, formulation of an acquisition program baseline, test 

planning, interoperability planning, and other key activities as noted 

below: 

Validation and Approval of JCIDS Documents. The program must 

address the mission capability need, which is documented in the Initial Capabilities Document, and meet the system-level performance 

parameters, documented in the Capability Development Document 

and Capability Production Document. (See Chapter 6.) 

58

Selection of a Preferred Solution. Alternatives that could potentially 

meet the mission need are analyzed as part of the JCIDS analysis 

process. For an ACAT I program, this process can be quite formal, 

requiring significant time, effort, and dollars. The JCIDS analysis supporting a preferred solution is documented in the Initial Capabilities 

Document and then further refined by a study called an Analysis of 

Alternatives (AoA). 

Cost estimating. Life cycle cost estimating must be accomplished to 

support inputs into the Program Objectives Memorandum (see Chapter 8) and the budget. Depending on the ACAT of the program, cost 

estimating is done at the program level (called the Program Office 

Estimate), the Component headquarters level (called a Component 

Cost Analysis), and at the Defense staff level (called an Independent 

Cost Estimate). (See Chapter 4.) Additionally, cost estimating supports affordability assessments, which determine whether a Component can “fit” a program within its projected budget authority (over 

time) given all of the Component’s other commitments. 

Preparation of an Acquisition Strategy and Program Structure. The 

acquisition strategy, developed by the program manager and approved by the Milestone Decision Authority, is a comprehensive, 

overarching master plan that details how the program’s goals and 

objectives will be met. It serves as a “roadmap” for program execution from program initiation through post-production support. It describes the key elements of the program (e.g., requirements, resources, testing, contracting approach, and open systems design) 

and their interrelationship, and it evolves over time, becoming increasingly definitive as the program matures. Acquisition strategies 

are tailored to the specific needs of an individual program. Program 

structure charts are schedules that graphically depict the time phasing of key events (e.g., milestones, testing, and others) in the acquisition strategy. 

Contract Planning and Management. Contracting for goods and services is fundamental since the functions inherent in systems acquisition, such as analysis, design, development, test, production, sustainment, modification, and disposal of systems, are accomplished 

through contracts with private industry. Typical activities include 

59

preparing an Acquisition Plan (a description of contracting strategy 

for the program with emphasis on the types and numbers of contracts to be awarded in an upcoming phase), preparing the Request 

for Proposal (a document that describes the task(s) or service(s) 

that the government wants industry to propose against), conducting a source selection (a process to select the winning contractor(s)), 

and monitoring contract performance. 

Budget Execution. Resources must be budgeted and obtained to execute contracts with industry. This includes formulating input for the 

Program Objectives Memorandum (a spend plan covering a 6-year 

period), the budget, and other programmatic or financial documentation in support of the Planning, Programming, Budgeting and Execution (PPBE) process. (See Chapter 8.) Funds are “obligated” upon the 

signing of a contact and then “outlaid” as the government makes 

actual payment in accordance with the contract for goods and services rendered. 

Preparation of an Acquisition Program Baseline (APB). The baseline contains the most important cost, schedule, and performance parameters, described in terms of threshold and objective values. A 

threshold value is a required value, while an objective value is a 

desired value. Schedule parameters include key schedule events, such 

as milestone reviews, initiation of key testing activities, and the start 

of production. APB performance parameters are the Key Performance 

Parameters specified in the Capability Development Document and 

Capability Production Document. (See Chapter 6.) Thus, the APB is a 

convenient summary of the most important aspects of a program (cost, 

schedule, and performance), and it provides a useful tool for management to assess how well a program is progressing towards its stated 

objectives. The APB is developed by the program manager and approved by the chain of authority up to the Milestone Decision Authority. For example, the APB for an ACAT ID program will be approved by its Program Executive Officer, the Component Acquisition 

Executive, and Defense Acquisition Executive. 

Test Planning. Test planning is central to the formulation of a coherent acquisition strategy. A variety of testing must be planned 

and accomplished either to confirm program progress or to conform to statutory dictate. After all, it is by testing that we validate 

60

the performance requirements identified by the user in the Capability 

Production Document and promised by the program manager in the 

acquisition program baseline. Testing includes developmental test 

and evaluation, operational test and evaluation, and live fire test 

and evaluation, as appropriate. The program manager’s Test and 

Evaluation Master Plan documents the overall structure and objectives of the test and evaluation program. It provides a framework to 

generate detailed test and evaluation plans for a particular test, and it 

contains resource and schedule implications for the test and evaluation 

program. 

Interoperability Planning. Interoperability is essential for successful 

combat operations within and across the military services and partners in coalition warfare. To facilitate planning and ensure interoperability policy is being considered and addressed, a Command, Control, Communications, Computers, and Intelligence Support Plan 

(C4ISP) is required for all weapon systems/programs that interface 

with command, control, communications, computer, and intelligence 

systems. The C4ISP includes system description, employment concept, operational support requirements, and interoperability and connectivity requirements. 

Formulation of Exit Criteria. Milestone decision authorities use exit 

criteria to establish goals for an acquisition program during a particular phase. At each milestone review, the program manager proposes exit criteria appropriate to the next phase of the program for 

approval by the Milestone Decision Authority. Exit criteria are phasespecific tasks selected to track progress in important technical, schedule, or risk management areas. They act as “gates,” which, when 

successfully passed, demonstrate that the program is on track to 

achieve its final goals. Examples of appropriate exit criteria are the 

achievement of a level of performance (e.g., engine thrust or missile 

range) or successful accomplishment of a task (e.g., first flight). Exit 

criteria are documented in the Acquisition Decision Memorandum issued by the Milestone Decision Authority upon completion of a milestone review. 

Technical Management. This is a broad term including the management of a totally integrated effort of systems engineering, test and 

evaluation, production, and logistics support over the system life 

61

cycle. Its goal is timely deployment, sustainment, and attainment of 

an effective system at an affordable cost. Technical management involves balancing a system’s cost, schedule, and performance. 

•	 Cost includes all funds required to design, develop, produce, operate, support, and dispose of a system. 

•	 Schedule includes the time it takes to design, develop, produce, and 

deploy a fully supported system. 

•	 Performance is the degree to which a system can be expected to 

perform its mission in combat. 

Technical management includes defining the system; conducting design engineering; performing systems engineering (system cost, schedule, and performance tradeoffs); developing/acquiring computer resources (including software); planning for logistics support; identifying 

and tracking reliability, availability, and maintainability requirements; 

transitioning from development to production; performing configuration management; ensuring producibility of the final design; defining 

manufacturing processes and controls; and planning for disposal at the 

end of useful life. 

Program Protection Planning. A program protection plan must be 

prepared for any program that is determined by the program manager to have critical program information that could be exploited to 

undermine the mission effectiveness of a system. The plan lays out 

the efforts necessary to prevent inadvertent disclosure and to deny 

access by foreign intelligence collection activities. It is updated 

throughout the system life cycle and reviewed at every milestone decision review. 

62

88


THE RESOURCE


ALLOCATION


PROCESS


The Four Phases of the Process 

All resources (dollars) for Department of Defense (DoD) activities, 

whether for weapons, information systems, people, buildings, or operating and support costs, are provided through the resource allocation 

process. The four phases of this process are: 

•	 Phase 1—Planning, Programming, Budgeting and Execution 

(PPBE) Process 

• Phase 2—Enactment 

• Phase 3—Apportionment 

• Phase 4 - Execution 

From the standpoint of developing, producing, fielding, and supporting weapon systems, PPBE is the focus of attention in the headquarters activities, while defense acquisition program managers are 

equally concerned with providing information to ensure their programs are funded for the future and with the day-to-day management of their programs. Figure 8-1, on the following page, depicts 

these four phases. 

63

Figure 8-1. Resource Allocation Process 

Phase I – Planning, Programming, Budgeting and Execution 

(PPBE) Process 

PPBE is the process that produces DoD’s portion of the President’s 

budget. It was originally introduced as the Planning, Programming, 

and Budgeting System (PPBS) by Secretary of Defense Robert 

McNamara in 1962. PPBE replaced PPBS in 2003. PPBE is a biennial 

(2-year) cycle during which DoD formulates 2-year budgets each 

even-numbered calendar year, called the “on year,” and then focuses 

on budget execution and program performance each “off year” (oddnumbered calendar year). During the on year, PPBE produces the 

Defense Planning Guidance (DPG) and a Program Objectives Memorandum (POM) for each military department, Defense agency, and 

selected other agencies/offices. Updates to the Future Years Defense 

64

Activity OSD Action Office Product 

On Year: 

Planning Under Secretary of Defense 

(Policy) 

Defense Planning 

Guidance 

Programming Director, Program Analysis & 

Evaluation 

Approved Program 

Objectives Memoranda 

(Updated FYDP) 

Budgeting Under Secretary of Defense 

(Comptroller) 

DoD Portion of the 

President’s Budget 

(Updated FYDP) 

Off Year: 

Planning 

(As Required) 

Under Secretary of Defense 

(Policy) 

Defense Planning 

Guidance (Optional) 

Program Changes Director, Program Analysis & 

Evaluation 

Limited Changes to 

Baseline Program 

(Updated FYDP) 

Budget Changes Under Secretary of Defense 

(Comptroller) 

Limited Changes to 

Baseline Budget 

(Updated FYDP) 

Program (FYDP) occur during both on and off years, and a DoD 

budget is produced every year. During the off year, the DPG may be 

issued at the discretion of the Secretary of Defense. Small programmatic adjustments will be allowed during the off year to reflect realworld changes. The chart above shows the agency responsible for 

each product. 

The Deputy Secretary of Defense manages the PPBE process with 

the advice and assistance of the Senior Level Review Group (SLRG), 

which the Deputy Secretary chairs. The SLRG includes the five Under Secretaries of Defense (i.e., for Acquisition, Technology and 

65

Logistics (AT&L); Policy; Comptroller/Chief Financial Officer; Personnel and Readiness (P&R); and Intelligence); the Director, Program 

Analysis and Evaluation; the Chairman and Vice Chairman of the JCS; 

and the Secretaries of the Army, Navy, and Air Force. 

Off-/On-Year Activities. The Quadrennial Defense Review (QDR) 

required by the Congress is DoD’s major statement of defense strategy and business policy. As such, the QDR fulfills the requirement 

for the DoD Strategic Plan, required by the Government Performance 

and Results Act (GPRA). The QDR integrates and influences all internal programmatic decisions that must be resourced by the 

President’s budget. Since the QDR is only produced every four years, 

this drives PPBE to slightly different off- and on-years within a fouryear construct. The following summarizes a typical four-year period 

of time that reflects the 2-year cycle of PPBE: 

•	 Year 1: Off Year. The first year of a new Presidential Administration is an off year (odd-numbered calendar year) for PPBE. The 

budget submitted to the Congress has been developed by the outgoing administration, and the budget being executed reflects the 

policies of the previous administration. Activities during this year 

may include supplemental budget requests to the Congress to start 

reorienting spending in accordance with policies of the new administration. Since this is an off year for PPBE, there will be no 

POM or Budget Estimate Submit (BES) to the Office of the Secretary of Defense; however, programmatic and budget changes to 

the previous administration’s on-year baseline will be accomplished by Program Change Proposals (PCP) and Budget Change 

Proposals (BCP) developed by the departments and agencies during the spring and summer. PCPs/BCPs will be discussed later in 

this publication. A program/budget review will be conducted in 

the fall (September-November) based on input from the PCPs/BCPs 

and will result in the submission of the President’s budget to the 

Congress in February. 

In the first year of a new administration, the President’s National 

Security Strategy (NSS) must be issued within 150 days of the 

incumbent’s taking office. The NSS will provide top-level guidance 

66

for conduct of the QDR and provide guidance for the Chairman of 

the Joint Chiefs of Staff (CJCS) to develop the National Military 

Strategy (NMS). The NMS will be reflected in the QDR and in an 

NMS document. For subsequent years, the NSS is due with submission of the President’s budget. The NMS is updated by the 

CJCS only when necessary. 

The QDR review will start in the summer/fall of this year so a 

QDR report can be provided to the Congress concurrent with the 

submission of the new administration’s first budget in February. A 

program/budget execution review of the prior budget year(s) will 

be conducted in the fall (September-November), and this activity 

initializes the drafting of the on-year DPG. 

•	 Year 2: On Year. The second year of a new administration is an on 

year (even-numbered calendar year) for PPBE. The QDR report is 

submitted concurrent with the President’s Budget in February. The 

DPG is issued around May and is followed by a concurrent POM/ 

Budget process. The departments and agencies will submit their 

POM and BES in August. Adjustments will be made in the FYDP, 

and the DoD input to the President’s budget will be finalized. Concurrent with the fall OSD assessment of the POMs and budget 

estimates, a program/budget execution review of the previous 

budget execution year will be conducted. 

•	 Year 3: Off Year. The third year of a new administration is another 

off year for PPBE. As this is the second off year, another QDR is 

not required; and the issuance of an off-year DPG may not be 

necessary depending on the national security environment. There 

will be an NSS issued by the White House; however, an update of 

the NMS is optional. Again, this depends on the security environment and whether the NSS contains significant new top-level guidance requiring changes in the military strategy. Programmatic and 

budget changes to the last on-year baseline will be, once again, 

accomplished by PCPs/BCPs. Drafting of the on-year DPG is initialized during the off-year program, budget, and execution review. The PCP/BCP process will, once more, result in a new DoD 

67

budget. The off-year execution review will also be conducted, and 

drafting of the on-year DPG will be initialized. 

•	 Year 4: On Year. The fourth year of a new administration is another 

on year for PPBE. The activities for this year are like those of Year 2, 

described previously; however, there is no QDR. 

Phase II - Enactment 

Enactment is the process through which the Congress reviews the 

President’s budget, conducts hearings, and passes legislation. Enactment 

begins when the President submits the annual budget to the Congress in 

early February of each year and ends when the President signs the annual authorization and appropriations bills approximately nine months 

later. “Authorization” approves programs and specifies maximum funding levels and quantities of systems to be procured. The “appropriations 

process” provides the budget authority with which to incur obligations 

(i.e., obligate), expend, and outlay funds. 

Phase III - Apportionment 

Once the authorization and appropriations legislation is signed 

into law by the President, funds are made available for DoD and 

other Federal agencies. “Apportionment” occurs when the Office 

of Management and Budget provides these funds to DoD and other 

Federal agencies. Subsequently, DoD allocates funds within the 

Department through action by the Under Secretary of Defense 

(Comptroller) and his counterpart in the Services and Defense 

agencies. 

Phase IV - Execution 

The execution phase occurs when appropriated funds are spent on 

Defense programs. In other words, it is the process of “obligating” 

funds (awarding contracts) and “expending” funds (writing checks to 

pay bills). Outlays occur when government checks are cashed and 

money flows out of the U.S. Treasury. The four phases of the resource 

allocation process overlap. (See Figure 8-2.) 

68

Figure 8-2. Resource Allocation Process – Overlap 

The current fiscal year budget is being executed while enactment of 

next year’s is underway, and programming for the following budget is 

in process. Planning is essentially a continuous process. 

It is incumbent on program managers and other officials responsible 

for any aspect of the resource allocation process to be aware of the 

sequence of activities and to understand where they are at all times. 

Note: PPBE is a calendar-driven system, and the acquisition life cycle 

is event-driven. Avoiding a mismatch or disconnect between programmatic requirements and available funding demands close 

69

attention on the part of program managers. This may be the most 

challenging part of a program manager’s job and, if not managed 

carefully, can become the greatest single source of program instability. 

70

INTERNET


WORLD WIDE WEB


LOCATIONS


For readers who wish to follow-up with additional study on the defense acquisition system, the following list of WWW locations for the 

major organizations and documents mentioned in this publication may 

be helpful. (Addresses are current as of the publication date.) 

Organization/Document WWW Location 

Acquisition Knowledge Sharing System http://www.deskbook.osd.mil 

Acquisition Community Connection http://pmcop.dau.mil 

Assistant Secretary of the Army http://www.saalt.army.mil 

(Acquisition, Logistics and Technology), 

the Army Acquisition Executive 

Assistant Secretary of the Air Force http://www.safaq.hq.af.mil 

(Acquisition), the Air Force Acquisition 

Executive 

Assistant Secretary of the Navy http://www.hq.navy.mil/RDA 

(Research, Development and 

Acquisition), the Navy and Marine 

Corps Acquisition Executive 

Assistant Secretary of Defense (NII), http://www.dod.mil/nii 

the DoD Chief Information Officer 

Advanced Concept Technology http://www.acq.osd.mil/actd 

Demonstrations (ACTD) 

Chairman, Joint Chiefs of Staff (CJCS) http://www.dtic.mil/jcs 

Defense Acquisition University http://www.dau.mil 

71

Organization/Document WWW Location 

Defense Acquisition University Continuous http://clc.dau.mil/kc/no_login/portal.asp 

Learning Center 

Director, Program Analysis & Evaluation http://www.pae.osd.mil 

Director, Operational Test & Evaluation http://www.dote.osd.mil 

DoDD 5000.1 and DoDI 5000.2 http://dod5000.dau.mil 

CJCSI 3170.01C and 

CJCSM 3170.01 

Integrated Product and Process http://www.acq.osd.mil/io/se/ippd/ 

Development, and Integrated Product ippd_pubs.html 

Teams (IPPD and IPT) 

Joint Technical Architecture (JTA) http://www-jta.itsi.disa.mil 

Joint Vision 2020 http://www.dtic.mil/jv2020 

Office of the Secretary of Defense http://www.dod.mil/osd/ 

Under Secretary of Defense http://www.acq.osd.mil/ 

(Acquisition, Technology and Logistics) 

72

CUSTOMER FEEDBACK


Dear Valued Customer: 

The Defense Acquisition University (DAU) Press publishes this reference tool for students in DAU courses, and other 

members of the defense acquisition workforce. We continually seek customer inputs to maintain the integrity and 

usefulness of this publication. 

We ask that you spend a few minutes evaluating this publication. Although we have identified several topic areas to 

evaluate, please feel free to add any additional thoughts as they apply to your particular situation. This information will 

assist us in improving future editions. 

To assist you in responding, this pre-addressed form requires no postage. Simply tear-out this page, fold, and tape 

closed as indicated, then place in the mail. Responses may also be faxed to the DAU Press at (703) 805-2917 or DSN 

655-2917. 

NAME AND DATE OF PUBLICATION 

1. Do you find this publication a useful reference tool? 

YES 

NO How can we improve the level of usefulness? 

2.	 Is the material presented in this publication current? 

YES____ NO_____ 

3.	 Using the rating scale below, please indicate your satisfaction level for each topic area. Place your response on 

the line beside the topic area. 

1 = Very satisfied 2 = Satisfied 3 = No opinion 4 = Dissatisfied 5 = Very dissatisfied 

_____ Readability 

_____ Scope of coverage 

_____ Contribution to your knowledge of the subject 

_____ Contribution to your job effectiveness 

_____ Contribution to process improvement 

4. Are there other subject areas you would like to have included in this publication? 

YES (Please identify)


NO


5. If you recommend additions, deletions, or changes to this publication, please identify them below. 

6. Additional comments 

(THIS SECTION IS OPTIONAL) 

Name/Title 

Address 

City/State/Zip 

Commercial ( ) DSN E-Mail 

73 
74

NO POSTAGE 

NECESSARY 

IF MAILED 

IN THE 

UNITED STATES 

BUSINESS REPLY MAIL 

FIRST CLASS PERMIT NO. 12 FORT BELVOIR,VA 

POSTAGEWILL BE PAID BY ADDRESSEE 

DEPARTMENT OF DEFENSE 

DEFENSE ACQUISITION UNIVERSITY 

ATTN DAU PRESS 

9820 BELVOIR ROAD 

FT BELVOIR VA 22060-9989 

STAPLE 
75

REPORT DOCUMENTATION PAGE Form Approved 

OMB No. 0704-0188 

Public reporting burden for the collection of information is estimated to average 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and 

completing and reviewing the collection of information. Send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington Headquarters 

Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202-4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704-0188), Washington, D.C. 20503. 

1. AGENCY USE ONLY (Leave blank) 2. REPORT DATE 

November 2003 

3. REPORT TYPE AND DATES COVERED 

Handbook 

4. TITLE AND SUBTITLE 

Introduction to Defense Acquisition Management 

5. FUNDING NUMBERS 

6. AUTHOR(S) 

Charles B. Cochrane 

7. PERFORMING ORGANIZATION NAMES(S) AND ADDRESS(ES) 

Defense Acquisition University 

9820 Belvoir Road 

ATTN: CDSC-PM 

Fort Belvoir, VA 22060-5565 

8. PERFORMING ORGANIZATION

 REPORT NUMBER 

9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESSES(ES) 

Same as 7. 

10. SPONSORING/MONITORING

 AGENCY REPORT NUMBER 

11. SUPPLEMENTARY NOTES 

12a. DISTRIBUTION/AVAILABILITY STATEMENT 

“A” Distribution for Public Release; Distribution unlimited. 

12b. DISTRIBUTION CODE 

13. ABSTRACT (Maximum 200 words) 

This handbook is the sixth edition published by the Defense Acquisition University. Although the general 

format of the second edition has been retained, this version has been significantly revised to reflect the 

latest (November 2003) acquisition management policies and procedures and the Department of Defense 

(DoD) 5000 Documents. 

This handbook is designed to be a quick study guide to refresh the skilled and experienced acquisition 

management professional as well as a comprehensive introduction to the world of systems acquisition 

management for the newcomer. It focuses on Department of Defense-wide applications rather than on the 

details of how specific weapons (or Automated Information System (AIS)) programs are managed. 

14. SUBJECT TERMS 

Introduction to Defense Acquisition Management, Defense Acquisition Programs, Transformation of the Department of Defense, Acquisition Life Cycle, 

Resource Allocation Process 

15. NUMBER OF PAGES 

84 

16. PRICE CODE 

17. SECURITY CLASSIFICATION

 OF REPORT 

Unclassified 

18. SECURITY CLASSIFICATION

 OF THIS PAGE 

Unclassified 

19. SECURITY CLASSIFICATION

 OF ABSTRACT 

Unclassified 

20. LIMITATION OF ABSTRACT 

Unlimited 

NSN 7540-01-280-5500	 Standard Form 298 (Rev. 2-89) 

Prescribed by ANSI Std 239-18 

298-102 
76