Acquisition Policy & International Trends. 2 Overview Defense Acquisition Basics International...

Acquisition Policy&

International Trends

2

Overview

Defense Acquisition Basics

International Acquisition Policies

Sales, Cooperation, and Defense Trade Trends

Program Trends

3

Planning, Programming, Budgeting and

Execution (PPBE)

Joint CapabilitiesIntegration andDevelopment

System (JCIDS)

DefenseAcquisition System

“Little A” Acquisition

“Big A” Acquisition

REQUIREMENTS

MONEY MATERIAL

DoD Decision Support Systems

4

‒ Strategic Guidance‒ Joint Operations Concepts‒CONOPS‒ Defense Planning Scenarios‒ Feedback from the field

Guidance for Future Joint Warfighting

Capabilities

‒Assess current capabilities‒ Identify gaps‒Recommend non-materiel

and/or materiel approaches‒ Identify operational

performance requirements

JCIDS

Non-MaterielSolutions

RecommendedMateriel

Approaches

FieldedCapabilities

Requirements Managers

‒PPBE ‒Congress

Resources‒Determine materiel solution‒Estimate cost and obtain funding‒Design, develop, and test‒Produce and field

Acquisition

JCIDS – The Basics

Joint Capabilities Integration and Development System

5

Defense Acquisition System

A CB

LRIPTechnology Maturation &

Risk Reduction.

Production & Deployment

DRFPRD

MaterielSolutionAnalysis

CDD-V

CDDICD Draft

CDD

Operations & SupportMateriel

DevelopmentDecision

IOC

FRP

Decision

Sustainment

DisposalFOC

Engineering & Manufacturing Development

PDR CDR

Model 1: Hardware Intensive Program

Initial Capabilities Document (ICD)

Capability DevelopmentDocument (CDD)

Capability Production Document (CPD)

RELATIONSHIP TO JCIDS

DRAFT CDD

CPD

PDR: Preliminary Design Review CDR: Critical Design Review CDD-V: CDD Validation

LRIP: Low Rate Initial Production FRP: Full Rate Production DRFPRD: Development Request For

Proposals Release Decision

IOC: Initial Operational Capability FOC: Full Operational Capability

• The Materiel Development Decision precedes entry into any phase of the acquisition management system• Entrance and Exit Criteria for each phase

6

InternationalAcquisition Policies

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Preferred Order for Solutions

JCIDSGuidance

Non-Materiel Solutions

Materiel Solutions

DOTMLPF-P

Procurement or Modification

Additional Productionor Modification

CooperativeDevelopment Program

New DoD JointProgram

New DoD Component Program

JCIDS andDefense

AcquisitionSystem

JCIDSOnly

8

JCIDS Provisions

“For capability requirements documents advocating creation of international acquisition programs with allies/partner nations, Sponsors will consider to the greatest extent possible, foreign disclosure review and document structuring to facilitate releasability, in whole or in part, to the nations concerned.”

“Other system attributes may include …… physical and operational security needs, including technology security, foreign disclosure, defense exportability features, and anti-tamper.”

JCIDS Manual (New in 2015 version)

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Acquisition Strategy

“[Program Management [PM] is responsible for integrating [IA&E] considerations into the program’s Acquisition Strategy at each major milestone or decision point. [PM] will consider the potential demand and likelihood of cooperative development or production, Direct Commercial Sales, or Foreign Military Sales early in the acquisition planning process; and consider U.S. export control laws, regulations, and DoD policy for international transfers when formulating and implementing the acquisition strategy … Where appropriate, [PMs] will pursue cooperative opportunities and international involvement throughout the acquisition life cycle to enhance international cooperation and improve interoperability ...”

DoDI 5000.02 (Enclosure 2, paragraph 7.a.) New

10

Cooperative Opportunities

• 10 USC 2350(a) requires Cooperative Opportunities Document before 1st milestone or decision point

• Statutory Cooperative Opportunities requirement is addresses in DoDI 5000.02− Due at first program milestone review − Documented in Acquisition Strategy or equivalent

document− Required for MDAP, MAIS, ACAT II & III− Approved by Milestone Decision Authority (MDA)

DoDI 5000.02, Table 2 (Milestone and Phase Information Requirements), Page 47

11

Program Protection

“Program protection also supports international partnership building and cooperative opportunities objectives by enabling the export of capabilities without compromising underlying U.S. technology advantages.” Program managers will describe in their PPP the program’s critical program information and mission-critical functions and components … [including] planning for exportability and potential foreign involvement. Countermeasures should include anti-tamper, exportability features, security … and other mitigations …”

DoDI 5000.02 (Enclosure 3, paragraph 13) New

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Sales, Cooperation, and Defense Trade Trends

13

Adapting to a Changing Environment

FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY09 FY10 FY11FY08 FY12 FY13 FY14

$10 Billion

$20 Billion

$30 Billion

$40 Billion

$50 Billion

$60 Billion

$70 Billion = Total Sales (FMS + BPC)

= FMS only (includes FMS funded with FMF)

UNCLASSIFIED

FMS and Service Procurement: 5 Year Average, FY10-14

The Scale of FMS

Air Force

FMSNavy

Army

#1. $45.1 Billion Navy (incl. USMC)

#2. $39.0 Billion FMS

#3 $38.8 Billion Air Force

#4 $32.4 Billion Army

Benefits to the U.S.• Builds U.S.-partner

relationships

• Interoperability

• Lowers unit costs for the U.S. DoD

• Maintain production lines

• Dollars into the U.S. economy

• Jobs14

OUSD(AT&L) International Cooperation

Agreement R&D Contributions

88 IAs

($ in Millions)

IA = International Agreement

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Top 10 Arms Exporters& Importers (2001-2012)

ImportersIndia $28776China $27875 South Korea $13896UAE $11914Pakistan $10430Australia $10365Greece $10286USA $9095Turkey $7962Singapore $7426

ExportersUSA $86437 Russia $74574Germany $22540France $20829UK $12435China $9955 Netherlands $6625Italy $6507Israel $5997Spain $5768

Source: Stockholm International Peace Research Institute (SIPRI) Arms Transfer Database (US$1990 millions)

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Share of InternationalArms Exports (%)

2009-2013 Top 3 CustomersUSA 29 Australia, South Korea, UAERussia 27 India, China, AlgeriaGermany 7 USA, Greece, ItalyChina 6 Pakistan, Bangladesh, MyanmarFrance 5 China, Morocco, SingaporeUK 4 Saudi Arabia, U.S., India Spain 3 Norway, Austria, VenezuelaUkraine 3 China, Pakistan, RussiaItaly 3 India, UAE, USAIsrael 2 India, Turkey, Columbia

Source: SIPRI Arms Transfer Database

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Defense Companies - 2013(World-Wide excluding China)

Rank Company Arms Sales, 2012, ($M)

Defense Sales % of Total Sales

1 Lockheed Martin (USA) 35,490 78

2 Boeing (USA) 30,700 35

3 BAE Systems (UK) 26,820 94

4 Raytheon (USA) 21,950 93

5 Northrop Grumman (USA) 20,200 82

6 General Dynamics (USA) 18,660 60

7 EADS (trans-European)* 15,740 20

8 United Technologies (USA) 10,560 19

9 Finmeccanica (Italy) 12,530 50

10 Thales (France) 10,370 55

www.sipri.org * EADS was renamed Airbus Group in January 2014

19

International Acquisition Program Trends

20

Program Trends

Past Present

Foreign Military Sales (FMS)

Direct Commercial Sales (DCS)

International Cooperative Programs (ICPs)

Sale of DoD Configurationwith Exportability Modifications

Integration of BuyerFurnished Equipment (BFE)

Development and Integrationof New Equipment

Sale of DoD Configurationwith Exportability Modifications DCS/FMS Hybrid Programs Sale of New or Highly

Modified Systems

Cooperative Development ofNew Systems

Incorporating ForeignParticipation in DoD Program

Cooperation ThroughoutPrograms’ Life-Cycles

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Joint Strike Fighter (JSF)

• DoD requirement to replace theF-16, F-18, and AV-8B

• UK MoD joins as partner and accepts DoD’s STOVL capability requirement

• Other partner nations follow

• Current FMS customers: Israel, Japan, Korea

• Future FMS customers: TBD• Coordination of ICP and FMS

customer investment in follow-on development anticipated

International Cooperative Program

Program Description Foreign Military Sales

• Concept Demo MOUs (several)• EMD MOU (U.S. and 8 partners)• Production, Sustainment, and

Follow-On Development (PSFD) MOU (U.S. and 8 partners)

• PSFD MOU cost shares based on projected JSF air system buys (known as Composite Share Ratio)

Combined Activities• OT&E (selected partners)• Training

– Various “Training Pooling” Implementing Arrangements

• Sustainment (Logistics)– Coordinated depot Investment– Automated Logistics

Information System (ALIS)

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RC-135V/W Rivet Joint

• UK retires Nimrod R1; wants toretain SIGINT capability

• UK decides to “buy into” U.S. RJprogram

• USAF provides three KC-135Rs as EDA

• FMS Case UK-D-SAO• KC-135s converted to RC-135s• Ground support equipment,

spares, and training


Program Description Foreign Military Sales

• Sustainment & Follow-on Development (SFD) MOU

• Common logistics support• Cooperative follow-on

development• Cost shares based on fleet size

(17 U.S./3 UK)

Combined Operations• Co-Manning MOU

– USAF to train UK cadre under FMS

• Cooperative Operations MOU– Framework for cooperative

operations

23

Saudi Arabia F-15SA

• $30B development, production, test, modification/conversion, and sustainment program

• Largest single FMS case in history

• PEO: AFLCMC/CC – PEO-FB • Security Asst PM (SAPM) (WR)• D-SAPM Production (WP)• D-SAPM Conversion (WR)• D-SAPM Sustainment (WR)• D-SAPM Training (AFSAT)

Scope

Program Description Program Structure

• Production: 84 F-15SA new aircraft

• Conversion: 70 F-15S to SA’s• Sustainment: Construction/

modification at multiple bases/ training ranges/centers

• Training: 5500 RSAF for English language & specialty training

New Development• Digital Electronic Warfare System • Missile Warning System• Fly-by-Wire flight controls• Reconnaissance pod (DB-110)• Color flat panel displays• New precision weapons

integration

24

• Navy establishes a requirement to replace the P-3

• Full cooperative program with Australia, Germany, and Italy attempted w/o success

• Australia decides on combination of P-8 and Navy MQ-4C Triton

• Current DCS Customer: India• Current FMS Customers: None• Future FMS Customers: TBD (but

likely)


Program Description DCS and FMS

• MOU w/Australia late in EMD• Production, Sustainment, and

Follow-On Development (PSFD) MOU w/Australia

• PSFD MOU cost shares based on projected U.S. and Australia P-8 buys

Combined Activities• Sustainment (logistics)

– AUS will be treated as “13th Squadron” by Navy

• Follow-on development requirements definition

– Australia Cooperative Program Personnel part of Navy process

P-8 Maritime Patrol Aircraft

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IA&E Policy Discussion

International Cooperative Programs (ICPs)• Consider partnership opportunities throughout life-cycle

Allied and Coalition Partner Interoperability • Establish JCIDS attributes for equipment interoperability

Program Protection Planning• Consider TSFD and exportability throughout life-cycle

Acquisition Strategy• Integrate IA&E considerations at each milestone/decision point

What’s driving these policies? Are they appropriate?

Are they achievable?

26

Handouts

27

Capability Requirement andAcquisition Processes

InitialCapabilitiesDocument*


Phase

DraftCapability

DevelopmentDocument

RequirementsAuthority

Review of AoAResults

Technology Maturation &Risk Reduction Phase

CapabilityDevelopmentDocument*

A

MaterielDevelopmentDecision

Dev.RFP

ReleaseDecision

Point

BEngineering & Manufacturing

Development Phase

CapabilityProductionDocument*

Production &Deployment Phase

C

Operations & Support Phase

Legend

= Decision Point

= Milestone Decision

= Requirements Document

= Requirements Authority Reviews

* Or equivalent Approved/Validated Requirements Document

Disposal

28

JCIDS Documents


• Summarizes the Capability-Based Assessment• Justifies requirement for materiel/non-materiel solutions• Supports MDD for materiel solutions• Guides MSA phase activities

Capability Development Document (CDD)

• Outlines an affordable increment of militarily useful, logistically supportable, technologically mature capability

• Draft CDD supports Milestone A “risk reduction” decision• Matured during TMRR and validated at requirements

decision point prior to Milestone B


• Addresses production elements specific to a single increment of an acquisition program

• Defines an increment that is ready for a production decision• Guides the production and final testing of the system

demonstrated during EMD

29

Defense Acquisition System

A CB

LRIPTechnology Maturation &

Risk Reduction.


DRFPRD


CDD-V

CDDICD Draft

CDD

Operations & SupportMateriel

DevelopmentDecision

IOC

FRP

Decision

Sustainment

DisposalFOC


PDR CDR

Model 1: Hardware Intensive Program


Capability DevelopmentDocument (CDD)


RELATIONSHIP TO JCIDS

DRAFT CDD

CPD

PDR: Preliminary Design Review CDR: Critical Design Review CDD-V: CDD Validation

LRIP: Low Rate Initial Production FRP: Full Rate Production DRFPRD: Development Request For

Proposals Release Decision

IOC: Initial Operational Capability FOC: Full Operational Capability

• The Materiel Development Decision precedes entry into any phase of the acquisition management system• Entrance and Exit Criteria for each phase

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Materiel Solution Analysis

• ENTER: Approved ICD, study guidance for conducting the AoA, and an approved AoA plan. AoA study guidance for MDAPs and AoA plan approval will be provided by CAPE.

• ACTIVITIES: Establish PM & PMO, conduct AoA, user writes draft CDD, develop initial:

• Acquisition Strategy • Test & Evaluation Master Plan (TEMP)• Systems Engineering Plan (SEP)• Life Cycle Sustainment Plan (LCSP)• Cyber Security Strategy• Program Protection Plan (PPP)

• GUIDED BY: ICD and AoA Plan

• EXIT: Completed the necessary analysis and activities to support a decision to proceed to the next decision point and desired phase in the acquisition process.

PURPOSE: to conduct the analysis and other activitiesneeded to choose the concept for the product that will be acquired

A


ICD DraftCDD

Materiel Development

Decision

31

Technology Maturation and Risk Reduction

• ENTER: MDA approved materiel solution and Acquisition Strategy, initial major program documentation and funding in the FYDP

• ACTIVITIES: Competitive prototyping of critical subsystems, SE trade-off analysis, develop contracting strategy, conduct CDD Validation, conduct Preliminary Design Review (PDR), conduct Development RFP Release Decision, begin source selection for EMD

• GUIDED BY: Acquisition Strategy and draft CDD/approved CDD

• EXIT: Demonstration that technology, engineering, integration, manufacturing, sustainment, and cost risks have been adequately mitigated to support a commitment to design for production, Validated capability requirements, full funding in the FYDP, and compliance with affordability goals for production and sustainment

PURPOSE: to reduce technology, engineering,integration, and life cycle cost risk to the point that a decision to contract for EMD can be madewith confidence in successful program execution for development, production, and sustainment

A B

Technology Maturation &

Risk Reduction

DRFPRD

CDD-V

CDDDraftCDD

FinalRFP

PDR

FinalRFP

Regarded by the USD (AT&L) as the most

important decision in the program’s

lifecycle

32

Engineering and Manufacturing Development

• ENTER: Adequate risk reduction; approved requirements; full funding in FYDP

• ACTIVITIES: Complete detailed design, system-level CDR, integrated testing, establish product baseline, demonstrate manufacturing processes and supportability

• GUIDED BY: CDD, Acquisition Strategy, SEP, and TEMP

• COMPLETION:

(1) the design is stable;(2) the system meets validated capability requirements demonstrated by developmental andinitial operational testing as required in the TEMP; (3) manufacturing processes have been effectively demonstrated and are under control; (4) industrial production capabilities are reasonably available; and (5) the system has met or exceeds all directed EMD Phase exit criteria and Milestone C entrance criteria

PURPOSE: to develop, build, and test a productto verify that all operational and derived requirements have been met and to support productionor deployment decisions

B


CDR

C

PDR?

CPD

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Production and Deployment

• ENTER: Acceptable performance in DT & Operational Assessments (OA); mature software; no significant manufacturing risks; approved CPD; acceptable interoperability and operational supportability; demonstration of affordability; fully funded

• ACTIVITIES: Low Rate Initial Production, IOT&E, LFT&E (if required) and interoperability testing of production-representative articles; Full-Rate Production Decision; fielding and support of fielded systems; IOC/FOC

• GUIDED BY: CPD, TEMP, SEP, LCSP

• EXIT: Full operational capability; deployment complete

PURPOSE: to produce anddeliver requirements-compliant products to receiving military organizations

LRIP


FRP

Decision

FOC

IOCC

Full Rate Production

CPD

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Operations and Support

• ENTER: Approved CPD; approved LCSP; successful FRP Decision• ACTIVITIES: LCSP implementation; Performance-Based Life-Cycle Product Support (PBL)

planning, development, implementation, and management; initiate system modifications as necessary; continuing reviews of sustainment strategies, demilitarize and dispose of systems IAW legal and regulatory requirements, particularly environmental considerations and explosives safety

• GUIDED BY: CPD/Acquisition Strategy/LCSP

PURPOSE: Execute a support program that meets materiel readiness and operational support performance requirements, and sustains the system in the most cost-effective manner over its total life cycle

Operations & Support

Sustainment

Disposal

FOC

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