The program execution landscape is changing at the senior leader levels.  Program Managers need to be aware of the new, dynamic environment and the resulting impacts on program strategies as these changes may result in changing priorities and acquisition strategy visions from acquisition executives.

Federal agencies can accelerate delivery of innovative solutions by designing acquisition portfolios that deliver an integrated suite of capabilities. Many portfolio leaders today often focus on executing a dozen similar, but independent, programs. In contrast, large commercial businesses manage integrated product lines for items ranging from automobiles and electronics to software and health services. Agencies could leverage this model as a basis for constructing portfolios of similar programs that deliver enhanced capabilities in shorter time frames.

In today’s acquisition enterprises, each program navigates the acquisition life cycle independently. Initial conceptual requirements drive program budgets, scope and solution space. Acquisition programs design, develop, test and produce individual systems that meet a defined set of requirements within an allocated budget. However, today’s complex and ever-changing environment requires integrated systems and services to produce capabilities greater than the sum of the individual parts. Analyzing alternatives and making trade-off decisions at the broader enterprise level rather than the program level would provide an opportunity to optimize performance, costs and/or risks. Guiding large systems independently through the acquisition life cycle over a period of 10 to 20 years has proven inefficient. Agencies can vastly improve the performance and outcomes of its acquisition system by incrementally delivering integrated capabilities via acquisition portfolios that feature tailored processes.

Just as industry constructs product lines, agencies can structure acquisition portfolios around the system-of-systems concept. A portfolio could decompose large systems into multiple smaller programs, projects or increments, and group those that contain similar capabilities, commercial off-the-shelf products, and services. For example, an IT portfolio for command and control or logistics could develop a suite of applications and services that run on a common infrastructure platform. Aircraft portfolios could be based on a common airframe (e.g., C-130) with different payloads, or on different airframes using common subsystems such as engines, communication suites or avionics software (e.g., Special Operations helicopters). This approach would not require a new top-down-driven structure; portfolio leaders could start today by grouping a few related programs and tailoring a structure and process for increased efficiencies. Acquisition executives could scale up these initial efforts after demonstrated success.

The early phases of a traditional program could have a broader aperture in a portfolio approach, opening up the potential solution space (see Figure 2). As envisioned, acquisition programs would be smaller than the programs used for today’s major systems, scoped in three- to five-year development increments. Smaller programs carry lower risk, as they simplify design, cost and schedule estimates— and ultimately delivery. Once managers effectively scope a program, operational and acquisition stakeholders develop and approve a subordinate set of requirements and acquisition documents. 

The principles of authority, simplicity, commonality and agility should guide all acquisition portfolios. By adopting the commercial product-line approach, agencies would address longstanding issues associated with acquisition speed, agility and system interoperability. Elevating the time-consuming acquisition processes to the portfolio level would reduce program workload, allowing each program to deliver products faster. In a complex, integrated environment, agency acquisition systems can no longer rely on a structure based on individual systems but rather should embrace a capability-focused, portfolio-centric structure modeled on the commercial sector. Managing requirements, budgets and staffs at the portfolio level would enable dynamic allocation to high-priority programs. Portfolio strategies, roadmaps and architectures would guide program development.

An active government and industry portfolio community would collaboratively develop technologies and designs and employ continuous competition to develop and produce the individual programs. Portfolios would design and optimize acquisition processes to deliver a suite of smaller programs rapidly, ensuring that warfighters regularly receive incremental capabilities that incorporate the latest technologies
designed to achieve their operational missions.

Actions You Can Take

• Create smaller, capability-centric fielding organizations run by new and more empowered Capability Area Providers (CAPs). The intent is to create a nexus of authority and accountability over resources, technology, requirements, engineering, and business management where one leader is responsible for delivering operational capability over time in a specific capability area.
• Give the CAPs milestone decision authorities and contracting authorities for their respective portfolios to ensure decisions are made by those closest to portfolio execution.
• Hold CAPs accountable via a small Board of Directors (similar to the commercial CEO-Board construct) consisting of an acquisition executive, a requirements lead, and a resourcing lead.
• Implement “command by negation” that empowers the CAPs to make all decisions within their portfolio without prior approval unless countermanded by the Board of Directors.
• Ensure CAPs have strong organic analytic capabilities to make continuous trade-offs within their portfolios.
• Give CAPs direct connectivity to those who will use the systems they provide, which enables tight coordination on how requirements will be met over time within a portfolio construct.
• Visit Accelerate strategies on requirements, contracting, design, and more to implement portfolio structures, culture, and strategies for each functional area.

References

• Five by Five, Pete Modigliani, Dan Ward, Matt MacGregor, Mar 2021
• Authority, Autonomy, and Accountability, Roger Thrasher, Eliahu Niewood, Dan Ward, Pete Modigliani, Jun 2017
• Portfolio Management Framework, Volume III Report, Section 809 Panel, Jan 2019
• Think Portfolios, Not Programs, Mike Janiga, Pete Modigliani, Defense AT&L Magazine, Nov 2014
• Portfolio Acquisition Briefing, Pete Modigliani, NPS Acquisition Research Symposium, May 2015
• Portfolio Acquisition Research Paper, Pete Modigliani, Naval Postgraduate School, Apr 2015