Breakout Session 211 Mark A. Gordon National Center For Advanced Technologies April 28, 2004

1. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management in the Business World”

2. What does EA look like?Time Phased RequirementsA forum on Evolutionary Acquisition Breakout Session 211 Mark A. Gordon National Center For Advanced Technologies April 28, 2004 NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

3. Topics • NCAT Summary and Background • Message from Last Conference • Significant Changes • Overview of Time Phased Requirements & Capabilities • Documentation Details Within New Policy • Feedback using Readiness Assessment • Questions NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

4. National Center For Advanced TechnologiesAbout NCAT • Established in 1989 as a not-for-profit research and educational organization • Promotes collaboration between public and private sectors • Provides a key “Window-to-Industry” for DoD clients • Secretariat for Multi-Association Industry Affordability Task Force IATF ...is a broad-based coalition of Industry leaders committed to maintaining the national security interests of the United States. The purpose of the task Force is to develop, communicate, and advocate focused Industry input to DoD… NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

5. MFG. TEAM Bescher NCAT Affordability Effort Led Toward EA EIA NSIA AIA AEA NAM Multi-Association Industry Affordability TASK FORCE Executive Committee • Team asked to review DOD 5000.1 and 5000.2 • Short term results (Jan 1993) was a matrix comparing 5000 to DOD policy letters • Long term result was a paper detailing EDA • EDA white paper was incorporated into DOD 5000 deskbook • June 27, 1997 Dr. Kaminski (USDA&T) signed policy encouraging PM’s to use EDA approach • Included in DOD 5000 re-write Jan ‘00 • Rewrite approved in Nov 2000 • 5000.2R implemented in June 2001, Rewrite in May 2003 • Evolutionary Acquisition is preferred approach ADPA AMT NCAT (Secretariat) AFCEA SME Multi-Use TEAM IPPD TEAM Simplified contracting TEAM Reininga Whatley Robinson NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

6. Well Established Problem • Acquisition Cycle Time long and increasing • Capability Gap in Short Term • Ineffective risk management / tech transition process • Program Instability • Soaring Costs • Aging systems “Death Spiral” • Perception of acquisition process as inflexible NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

7. Observations From Past year • Traditional Industry and Government Roles and Responsibilities have shifted to adapt to the partnership model. • A Toolset exists to develop and manage an integrated architecture that allows for modular technology (solution) insertion at precise windows. • Defense and (some) industry processes do not presently support rapid development and demonstration. • Revised requirements process (practices) allow greater degree of modification between increments. • Affordability and sustainment practices not emphasized within early stages. • How will DoD evaluate “Proven Technology” against prevailing pressure to add the leading edge technologies? NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

8. Observations from the Cheap Seats • “If you do what you always did, you will get what you always got.” • Need a new acquisition process, with a pronounced change in the way of doing business. • DoD 5000 and CJSI3170 have embodied a significant change in policy, what will implementation look like? • “Today’s problems are often a result of yesterdays’ solutions.”* • Examine unintended consequences of policy changes and implementation practices. • Don’t erase all of the anticipated gains from EA by poorly preparing for Sustainment. *Peter Senge; The Fifth Discipline NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

9. “May You Live in Interesting Times…”Rapid Changes in Policy & Guidance • DoD 5000 series Re-write • CJCSI 3170 [D] Requirement Process • CJCSI 6212.01C Interoperability of IT introduces Net Ready KPP • First Use of Time Phased Requirements • MDA (Boost Stages) • FCS LSI called for EA Incremental Approach • Performance Based Agreements • Modular Open System Methods • Program Manager’s Guide to Technology Transition in an Evolutionary Acquisition Environment • (Pre-Release) A Practical Guide to Integrated Acquisition & Logistics • DAU working on EA Modules to highlight practices across all services. • Congress is evaluating EA and SD processes to understand where benefits exist. Will policy changes be rolled out aggressively, across legacy programs and new starts? NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

10. Philosophy:Evolutionary Acquisition and Spiral Development • The Objective of an EA Strategy is clearly stated as the “faster deliver of advanced capability to the warfighter.” • However: the core function (identity) of EA/SD is to allow the development of partial functionality, and then learn from it’s demonstration or use. This knowledge in turn is meant to re-evaluate the subsequent development and re-formulate the perceived needs. • The application of this experience is meant to continuously modify the end-objective. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

11. Newest Acquisition ProcessEA Increment Application Framework NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

12. Two EA Approaches • Incremental Development: • The end-state capability is known; and this requirement is met over time by developing several increments, each based upon proven, affordable and sustainable technology. Intermediate increment requirements can be modified based upon solution set maturity and/or user feedback. • Spiral Development: (Recommended Approach) • The end-state capability is not known at program initiation. Intermediate and end state requirements are refined through demonstration and risk management and continuous user feedback. Each increment provides the user the best possible capability, based upon proven, affordable and sustainable technology SD requires an Act of Faith that the customer’s final needs will be pursued. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

13. Acquisition and Requirements ProcessEarly Industry Interfaces Industry Roles TDS NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

14. Material Acquisition Preference Order Highly Influences Industry • Procurement/modification of commercially available products, services, and technologies, from domestic or international sources, or the development of dual-use technologies; • The additional production/modification of previously-developed U.S. and/or Allied military systems or equipment; • A cooperative development program with one or more Allied nations; • A new joint Component or Government Agency development program; or • A new DoD Component-unique development program. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

15. Responsibilities Differ for Industry Segments • Major Defense Contractor (System Integrator) • New basis for requirements, highly integrated models • Multiple concurrent technology paths • Responsible for defining MOSA-compliant architecture • Managing multi-increment logistics strategies • Primary Conduit for two-way communications with sub-tier • OEM / First Tier Supplier • Dual Use Higher Priority • Technology solutions in context with end capability • Narrow window for proven technology • Closer partnership with customer, able to effect future requirements • Must manage to architecture • Second + Tier Supplier / Technology Developer. • Dual Use Higher Priority • More visibility for technology insertion • Top tier partners will pull technology via MOSA arch. • Near and mid term constraints (Perf., Sched., Cost) clearly defined to align with increments. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

16. Industry Perspectives • New policy being released describing Evolutionary Acquisition policy & requirements alongside practices. • Industry is just beginning to disseminate true practices required to implement newest 5000 series policy. • Flexibility and Innovation are stressed, questions remain how to implement within risk-adverse culture of both Industry and DoD. • Full funding of increment at MS B means significantly lower risk of program instability. Will this stability materialize? • Greater emphasis on Technology Transition paths, need similar attention to Manufacture and Support during early decisions. Tremendous Amount of New Policy About Evolutionary Acquisition Being Released. How & Where Will It Be Implemented? NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

17. What Should Time Phased Requirements Look Like? These ORDs Are Not Tied to Capabilities Hard to Show How TechnologyImpacts Capability Need A Different Starting Point NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

18. Requirements Process:Desired Improvements • DefineHow We Fight Up Front • Focus onCapabilities vs. Platforms • ProcessInclusive of Materiel and Non-Materiel Solutions • More Joint Voice Early • Less Prescriptive Early; More focus on Experimentation • Metrics Based • Clear Tie to Strategy • Better TieBetween Event Driven and Calendar Drivenprocesses • Take Advantage ofCollaborative Tools to Cut Decision/Staffing Time NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

19. Challenges • Identifying the “time-phased” elements in requirement • Overall program vision • Collaboration – Warfighter/Acquirer/Industry • Management Intensive – Grow better PMs (Both Gov’t and Industry) • Evolving Requirements (New threats/System experience) • Remaining flexible (don’t lock in requirement until last minute) • How/When to do you re-compete or move to another system NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

20. Warfighters Program Managers Services New Starting Point:INTEGRATED ARCHITECTURE • Systematic way of communicating an operational concept to system developers • Analytic basis for discussions and decisions NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

21. Initial Capabilities Document:Contents • 1. Joint Mission Functional Area • 2. Capability Gap. • What Capabilities are needed by the warfighter • Describe, in operational terms, the missions that cannot be performed • Describe, in Broad Aspects, the desired effects. • Capture the Functional Area Analysis and Functional Needs Analysis • 3. Threat/Operational Environment. • Describe the operational environment in which the capability must be exercised. • Summarize the projected threat environment and the specific threat capabilities to be countered.  • 4. Mission Functional Solution Analysis Summary • Discuss DOTMLPF Analysis. Summarize the results of the DOTMLPF analysis. • Ideas for materiel approaches. If a materiel solution is required to address a capability gap • Analysis of Materiel Approaches. results of system's down-select. • 5. Final system materiel recommendations. • Describe the materiel recommendation's) for further system-level analysis during Concept Refinement, including the minimum capability required to fill the gap • Describe how an associated Analysis of Alternatives AoA should be performed, including Boundary Conditions. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

22. Technology Development Strategy:Contents • The Description of the Strategy. • Single Step or Evolutionary, Incremental or Spiral Approach • How the program will be divided into increments or spirals • Limitations on prototypes, how to support them. • Specific Performance Exit Criteria. • Overall Program Strategy: Cost, Schedule & Performance Goals • First Spiral Goals Cost, Schedule, Performance (Exit Criteria) • Test plan for first Spiral Demonstration NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

23. Capabilities DevelopmentDocument • Capability Discussion (How Current Increment Contributes) • Threat Summary • Program Summary Provide a summary of the overall program strategy to reach full capability and the relationship of the increment addressed by this CDD to any other increments of the overall program. • System Capabilities Required for the Current Increment. • Capstone Requirements Document (CRD) Interface(s). • C4I Supportability • Related, Supporting and Supported Systems/Programs • Logistics and Facilities Considerations • Electromagnetic Environmental Effects (E3) and Spectrum Supportability • Force Structure/Quantities. • Schedule and IOC/FOC Definitions (for Increment) • Other DOTLPF Consideration • Other System Characteristics • Program Affordability. Threshold and objective NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

24. Time Phased Aspects: Documentation • ICD Stages of Capability • Current and Future Threat Description • Analysis of Functional Needs in Phases • Boundary Conditions For AoA Need • TDS Strategy and Description of Spirals • Total Program Goals • Specific Increment/Spiral Goals Tech. • CDD Context for this Increment’s Capability / against final • Schedule of Capabilities for Current Increment • Relationship to Supporting Programs / Increments • Required Logistics Considerations for Current Increment • Quantity intended for LRIP Phases NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

25. Culture Shift: Time Phased Requirements May Be a Moving Target • Time Phased Requirements, the heart of EA, represents the intersection of required capability and available solution. • These are fixed for current increment after MS A. • These are estimates for subsequent increments, because the future is dependent upon the demonstration and lessons of the current Spiral. • This recursive nature of EA means that PMs in industry and DoD will need to be flexible during early stages of future increments. • The danger in this approach is becoming too risk adverse in future increments, not getting proper feedback from current Spiral • Industry needs to understand Feedback Mechanisms that will modify ( set or change ) future requirements. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

26. New Attributes for Success:Proven, Affordable, and Sustainable • Language raises the bar significantly! • Requires early and constant effort by DoD and industry to monitor all three attributes concurrently. • Readiness is often judged subjectively. • Tools exist or are under development: • TRLs- Demonstrated Capability • MRLs- Demonstrated Producibility • SRLs- Demonstrated Sustainment NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

27. Technology Readiness Levels • Basic principles observed and reported. • Technology concept and/or application formulated. • Analytical and experimental critical function and/or characteristic proof of concept. • Component and/or breadboard validation in laboratory environment. • Component and/or breadboard validation in relevant environment. • System/subsystem model or prototype demonstration in a relevant environment. • System prototype demonstration in an operational environment. • Actual system completed and validated through test and demonstration. • Actual system “flight proven” through successful mission operations. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

28. Manufacturing Readiness Levels • Product concept/Technology capability validated. Initial manufacturing engineering. • Manufacturing experiments conducted. Producibility goals have been established with customer. • Prototype Component manufactured with laboratory process. Production simulation constructed. CAIV methods applied to establish design constraints. Ready to Enter SDD. • Component manufacture. All manufacturing processes / tooling defined. Non-standard production practices identified with validation schedule. Design Readiness Review • Laboratory Sub-system production, validation of all manufacturing processes / equipment. • Sub / system manufacture using relevant processes / tooling. Value Analysis utilized to achieve cost goals. Ready to enter LRIP Phase. • Demonstrated LRIP capability, attain Supply Chain management goals. • Demonstrated customer’s span time, production rate, and sigma targets. Ready to transition to FSP • Full scale production demonstrated at target Cp, with on-going improvement activities (Kaizen) NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

29. Monitor Readiness Levels Within Time Phased Requirements Process • Apply levels for technology against increment functional capability. • Establish entrance criteria for technology insertion during next increment. • Monitor levels for future increment, modify attainable capability accordingly. • Utilize scheduled developmental test or demonstration programs to vet readiness levels. • This would be planned in TDS. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”

30. Summary • New policy and practices will significantly change industry responsibilities. • DoD and Industry have to work closely to implement best practices, understand complete integrated architecture. • Industry must continuously update technical readiness for multiple, concurrent development paths. • Time Phased Requirements will have to span functional capability -to- technical solution set for each increment/spiral. • Proper application of EA relies on early application and monitoring of multiple readiness assessments. NCMA World Congress 2004 “Maximizing Value to Stakeholders…Contract Management within the Business Cycle”