Middle Tier Acquisition Oversight

Middle Tier Acquisition
(Section 804)

Introduction
Guiding Principles
Initiation
Funding
Requirements
Oversight
Documentation
Contracting
Systems Engineering
Test and Evaluation
Air Force Phases
Maritime Accelerated Acq
Transition
NDAA Language
Policy References
804 Programs

Oversight

NDAA Language

SAE

  • SAE is MDA (in coordination with USD(A&S))
  • Shall appoint a PM who has significant and relevant experience managing large and complex programs.
  • Evaluate PM job performance annually on whether they achieved the objectives of the program, including quality, timeliness, and cost objectives.

 Program Manager

  • Shall report directly to the SAE
  • Authorized to staff positions to manage the program including experts in business management, contracting, auditing, engineering, testing, and logistics, without another organization to the maximum extent practicable
  • Authorized to make cost, schedule, requirements trade-offs in coordination with the users and testers
  • Expeditiously seek Congressional waiver from any statutory or regulatory requirement they determine add little/no value to program
Air Force

The MDA for a rapid acquisition activity will:

  • Initiate the rapid acquisition activity and ensure it meets the criteria for the Section 804 authority being applied.
  • Approve an acquisition strategy, acquisition oversight milestones, metrics and execution guardrails (i.e., thresholds that trigger a notice to, and/or review by, the MDA), timing and scope of decision reviews, and required program documentation.
  • Ensure rapid fielding efforts have validated requirements prior to commitment of funds unless waived by the SAE.

The PM for a rapid acquisition activity will:

  • Develop and propose an acquisition strategy, acquisition oversight milestones, metrics and execution guardrails, timing and scope of decision reviews, metrics, and required documentation to the MDA.
  • Ensure approved acquisition strategies are documented and executed according to guidelines in this guidance memorandum.
  • Challenge and evolve the acquisition plan based on discoveries and opportunities uncovered during prototyping and production (where applicable). Approval process for future substantive changes should be documented in an Acquisition Decision Memorandum (ADM).

The SAE is the MDA for rapid acquisition activities meeting the funding criteria for ACAT I as defined in DoDI 5000.02.

MDA for efforts meeting the criteria of ACAT II and III programs— as defined in DoDI 5000.02 —is delegated to the PEO with further delegation allowed to qualified individuals meeting the definition, and following the process, in Chapter 1 of AFI 63-101/20-101, Integrated Life Cycle Management.

Application of ACAT criteria for MDA determination does not result in the effort being an ACAT program or invalidate the previous paragraph.

Navy
  • ASN(RD&A) will initiate all Middle Tier Acquisition programs by an ADM and may designate Acquisition Decision Authority at that time
  • A Program Manager will be designated and report directly to the Acquisition Decision Authority.
Army

The AAE will:

  • Provide, oversight, guidance and reporting requirements for MTA efforts.
  • Approve each initial decision to utilize MTA.
  • Unless otherwise noted in the ADM, be the DA for MTA efforts that meet the funding criteria for ACAT I as defined in DoD Instruction (DoDI) 5000.02. For efforts meeting the criteria of ACAT II, Ill and IV programs-as defined in DoDI 5000.02 – DA is delegated to the PEO, with further delegation allowed consistent with current policy once the AAE has approved the initial decision to utilize MTA. Application of ACAT criteria for DA determination does not establish the mid-tier acquisition effort as program of record and does not impose the requirements of an ACAT program.
  • Annually evaluate the performance of Program Executive Officers (PEO) and any direct-reporting PMs on assigned MTA efforts. Ensure PEOs annually evaluate the performance of their PMs on these efforts.

The DA is the designated individual with overall responsibility for an effort conducted under MTA. The DA for each approved Rapid Prototyping/Rapid Fielding initiative will:

  • Approve major decisions concerning progress of the effort at pre-established decision points.
  • Be accountable for reporting cost, schedule and performance data to the Under Secretary of Defense (Acquisition and Sustainment) (USD(A&S)) in accordance with (IAW) reference 1.b and any Cost Assessment and Program Evaluation requirements.
  • Authorize PMs to utilize tailored, streamlined procedures that support effective project completion.
  • In coordination with functional stakeholders, ensure that PEOs/PMs structure all individual MTA efforts to adhere to the operating principles outlined in this document under the specific type of MTA.
  • Develop and track measureable, quantifiable metrics that assess technical performance parameters, cost and schedule.

The PM is the designated individual with responsibility for and authority to accomplish the objectives of the MTA effort. The PM shall be accountable to the DA for credible cost, schedule and performance. The PM for each approved Rapid Prototyping/Rapid Fielding initiative will:

  • Execute the initiative in accordance with the AAE’s initial decision memorandum and subsequent direction from the designated DA. The PM must return to the DA for approval to deviate from the initial ADM.
  • Report to the designated MTA DA.
  • In coordination with the users of the equipment and the test community, make trade-offs among life-cycle costs, requirements and schedules to meet the goals of the effort.
  • Ensure that experimentation focuses on outcomes, affords the maximum ability for quantifiable measurement and centers military value in an operational environment. Coordinate with stakeholders for appropriate concurrence at key decision points. Additionally, include in decision points the requirement for stakeholders to adjust program documentation, including the validated requirement.
  • Submit to the PEO any requests for technical staff, including experts in business management, contracting, auditing, engineering, testing and logistics, to enable effective program execution.
  • Shall document metrics to measure the program’s cost, schedule, performance and risks. Metrics should inform decision makers that the MTA is accomplishing what it intended, when it was intended.
  • Provide data to include, but not be limited to: name of effort, capability gap or problem, capability gap metrics, definitive source for the capability gap or problem, capability characteristic or solution, date funds approved for initiation, funding source, result (transition or termination), date of transition or termination, reason for transition or termination, budget, and vendor(s) name.
  • Report effort in the Army Acquisition Program Master List.
  • Where appropriate:
    • Provide justification on waiver requests for requirements deemed to be of little value.
    • Propose tailored reviews, processes, and assessments that are necessary for achieving cost, schedule, and performance goals and statutory compliance.
    • Propose tailored documentation. With respect to acquisition strategies, consult reference c, which authorizes use of the simplified acquisition management plan (SAMP) in appropriate circumstances.
    • Propose tailored metrics to track.
  • Execute MTA efforts using flexible procurement and non-procurement instruments. These include, but are not limited to:  Indefinite  Delivery,  Indefinite Quantity (IDIQ) contracts, cooperative agreements (when authorized by statute), other transactions for prototype projects (10 USC 2371b), experimental authority (10 USC 2373), and Federal Acquisition Regulation (FAR) Part 12 procedures or standard FAR contracts (where appropriate). PMs will work closely with contracting  officers to select  the most appropriate instruments when building the program strategy.
  • Ensure prospective DA approval, documented in an ADM, of all cost and schedule changes that exceed previously approved parameters.
  • In addition to any other DA-directed status reports, provide the DA with an annual assessment of the program’s status with respect to cost, schedule and performance objectives.

DA/PM responsibilities for Rapid Prototyping:

  • Use merit-based processes for the consideration of innovative technologies and new capabilities to meet user needs.
  • Develop and implement disciplined acquisition and funding strategies.
  • Demonstrate and evaluate the performance of field able prototypes developed pursuant to the effort in an operational environment.
  • Develop specific plans to transition successful prototypes to new or existing acquisition programs for production and fielding under the rapid fielding pathway or the Defense Acquisition System.

DA/PM responsibilities for Rapid Fielding will:

  • Use merit-based processes for the consideration of existing products and proven technologies to meet user needs.
  • Demonstrate the performance of proposed products and technologies for current operational environment.
  • Develop and implement disciplined acquisition and funding strategies.
  • Ensure consideration of lifecycle costs and address issues of logistics support and system interoperability.
MITRE Strategy Considerations

“SCO’s [DoD’s Strategic Capabilities Office] secret is fairly simple: empowering program managers with design tradespace, prototyping, flexible contracting, and appropriate decision authorities to take the reins of the programs. Resulting organizational byproducts—speed, agility, and accountability. If confirmed as the Air Force’s Senior Acquisition Executive, you can expect me to continue implementing Congressional intent by expanding this human-driven approach: delegating decisions to the lowest appropriate level; increasing rapid experimentation and prototyping for “fast failing”, early risk reduction, and keeping flawed concepts out of programs of record; and expanding use of commercial technology and practices, including designing for upgradeability and sustainment. From my experience, when acquisition professionals are given a clearly-articulated mission; design trade space; tools, like experimentation and prototyping, to explore it; rewards for speed and prudent risk-taking; and maximum decision authority over their programs, urgency, creativity, and accountability are natural byproducts.”

– Dr. Will Roper, Air Force Service Acquisition Executive, in Confirmation Hearing to Senate Armed Services Committee

Pushing decision authority to lower levels helps reduce decision latency and supports faster progress through the process. Empowering decision authorities at lower-tiers of the organization is thus a best practice and key enabler of acceleration. Delegated decision-making is the preferred approach throughout acquisition policy guidance:

“Responsibility for the acquisition of systems shall be decentralized to the maximum extent practicable.” – DODD 5000.01

“Issues should be resolved at the lowest level possible.” – DODI 5000.02

Preference for “minimum administrative burden,” which in practice means reducing the number of decisions that require approval from higher authorities. – FAR 35.0002

Empowering decision-making as close as possible to the sources of the most critical information reduces decision latency and enables the team to integrate more of the relevant data into the decision.  A team that operates with the shortest possible decision-making path is more able to respond and adapt to rapidly changing conditions, move faster through its own decision-making process, and inform or implement decisions made higher in the organization.  Allowing decisions to be made at lower tiers of the organization also frees up capacity for upper level leaders to take broader strategic actions and clear away the obstacles that degrade implementation.  And most importantly, the individuals who are personally involved in decision-making take greater care throughout the process and feel greater ownership for the outcomes of the decision, making this a best practice and key enabler for acceleration.  As a general principle, issues should be resolved at the lowest level possible.

Decision authority must be accepted as well as delegated.  While senior leaders can initiate this change, personnel in lower-tier organizations must be willing to accept the accountability that accompanies empowerment.  Both parties have a role in avoiding an overly cautious approach where all decisions are automatically pushed to the highest possible level.

Action You Can Take  

  • Review policy on decentralized decision authority and publicize local application for your project.
  • As specifically as possible, identify decisions that can and should be delegated to lower levels.
  • Establish shared expectations about decision-making authorities
  • Continuously watch for instances where decision-making is slowed down by unnecessary involvement by higher-level authorities.
  • Contact an Accelerator SME for support

Additional Information and References

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