Competitive Prototyping – the New Reality

1. Competitive Prototyping – the New Reality Sharon Vannucci Assistant Deputy DirectorSystems Engineering Policy and Guidance Systems and Software Engineering Office of the Secretary of Defense Program Managers’ Skills Course, PMT 403 June 18, 2009

2. Bottom-line Upfront • DoD 5000.02 changes emphasize early stages of pre-systems acquisition - prior to Milestone B (MS B) • Reduce risk before making business commitment • Improve likelihood of being able to meet commitments • Prototyping means new challenges for the program during this early period • Pre-Milestone B prototyping is required by USD(AT&L) policy . . . and now it’s the law! Technical Acquisition Excellence for the Warfighter

3. First – Competitive Prototyping Policy • “Evolutionary acquisition requires . . . Technology development preceding initiation of an increment shall continue until the required level of maturity is achieved, prototypes of the system or key system elements are produced, and a preliminary design is completed . . .” • “The TDS and associated funding shall provide for two or more competing teams producing prototypes of the system and/or key system elements prior to, or through, Milestone B.” Technical Acquisition Excellence for the Warfighter

4. Second – DoDI 5000.02 Prototyping and Competition MS A MS B MS C Operations & Support Engineering & Manufacturing Development Production & Deployment Materiel Solution Analysis Technology Development MDD P-PDR-A P-CDR-A FRP DR “The Technology Development Strategy and associated funding shall provide for two or more competing teams producing prototypes of the system and/or key system elements prior to, or through, Milestone B. Prototype systems or appropriate component-level prototyping shall be employed to reduce technical risk, validate designs and cost estimates, evaluate manufacturing processes, and refine requirements . . .” Technical Acquisition Excellence for the Warfighter

5. Now – Competitive Prototyping Legislation PL 111-23 (“Acquisition Reform”), Section 203: • Requires the Secretary of Defense to modify acquisition policy to require each MDAP’s acquisition strategy provides for competitive prototypes prior to a MS B decision • Allows prototyping to occur at the system or subsystem level • Includes provision for Milestone Decision Authority (MDA) waiver only on the basis that the cost of producing the competitive prototypes exceeds the expected life-cycle benefits (in constant dollars) of producing the prototypes or for critical national security objectives • Programs receiving a waiver must • still produce a prototype before MS B • be reported in writing by the MDA to the congressional defense committees and the Comptroller General of the US Weapon Systems Acquisition Reform Act of 2009 (May 22, 2009) Technical Acquisition Excellence for the Warfighter

6. Acquisition Reform Thumbnail • New legislation, Public Law 111-23, Weapon Systems Acquisition Reform act of 2009 (May 22, 2009) • Strong bipartisan Congressional support • Heavy focus on “starting programs right” • Renewing focus on systems engineering early in a program’s life • Requiring completion of competitive prototypes for all Major Defense Acquisition Programs (MDAPs) • Requiring completion and MDA assessment of a system-level Preliminary Design Review before MS B • Strengthening developmental test and evaluation capability Technical Acquisition Excellence for the Warfighter

7. Reform Objectives “The key to successful acquisition programs is getting things right from the start with sounds systems engineering, cost-estimating, and developmental testing early in the program cycle. The bill that we are introducing today will require the Department of Defense to take the steps needed to put major defense acquisition programs on a sound footing from the outset. If these changes are successfully implemented, they should help our acquisition programs avoid future cost overruns, schedule delays, and performance problems.”–Senator Carl Levin (D-MI), Chairman, Senate Armed Services Committee “The Weapon System Acquisition Reform Act of 2009 is an important step in efforts to reform the defense acquisition progress. This legislation is needed to focus acquisition and procurement on emphasizing systems engineering; more effective upfront planning and management of technology risk; and growing the acquisition workforce to meet program objectives.” –Senator John McCain (R-AZ), Ranking Member, Senate Armed Services Committee Technical Acquisition Excellence for the Warfighter

8. Summary of Legislation The Weapon Systems Acquisition Reform Act of 2009 contains provisions that will: • Address problems with unreasonable performance requirements by requiring DoD to reestablish systems engineering organizations and developmental testing capabilities; make trade-offs between cost, schedule and performance early in the program cycle; and conduct preliminary design reviews before giving approval to new acquisition programs; • Address problems with unreasonable cost and schedule estimates by establishing a new, independent director of cost assessment to ensure that unbiased data is available for senior DoD managers; • Address problems with the use of immature technologies by requiring the Director of Defense Research and Engineering to periodically review and assess the maturity of critical technologies and by directing the Department to make greater use of prototypes, including competitive prototypes, to prove that new technologies work before trying to produce them; and • Address problems with costly changes in the middle of a program by tightening the so-called “Nunn-McCurdy” requirements for underperforming programs. Excerpts from Bill Signing Ceremony Press Release – May 22, 2009 8 Technical Acquisition Excellence for the Warfighter

9. Impactof Acquisition Reform Legislation on Early Acquisition Policy • Establishes Director, Systems Engineering (D, SE) and Director, Developmental Test and Evaluation (D, DT&E) as principal advisors to the Secretary of Defense and the USD(AT&L) on systems engineering and development planning and on developmental T&E, respectively • Mandates documented assessment of technological maturity and integration risk of critical technologies for MDAPs during the Technology Development (TD) phase • Establishes D, DT&E and D, SE joint tracking and Congressional reporting on MDAP achievement of measurable performance criteria • Mandates competitive prototyping and MDA completion of a formal Post-Preliminary Design Review Assessment for all MDAPs before MS B; additional MDA certification to both at MS B • Strengthens technical analysis of cost and schedule breaches during the Technology Development (pre-MS B) and the Engineering and Manufacturing Development (post-MS B) phases Technical Acquisition Excellence for the Warfighter

10. Acquisition Lifecycle Comparisons Defense Acquisition Management System, May 12, 2003 A B C (Program Initiation) System Development and Demonstration Production and Deployment Operations and Support Concept Refinement Technology Development Design Readiness Review Full-Rate Production Decision Review ConceptDecision Defense Acquisition Management System, December 8, 2008 A B C (Program Initiation) Engineering and Manufacturing Development Production and Deployment Materiel Solution Analysis Operations and Support Technology Development FRP Decision Review PDR PDR CDR Materiel Development Decision PDR after B w/ Post-PDRAssessment Post-CDR Assessment Or Defense Acquisition Management System, May 22, 2009 Technology Development A B C (Program Initiation) Technological Maturity and Integration Risk Assessment Engineering and Manufacturing Development Materiel Solution Analysis Production and Deployment Operations and Support FRP Decision Review Competitive Prototyping PDR CDR Tech Materiel Development Decision Post-CDR Assessment Post-PDRAssessment

11. What this means for Program Managers • Systems engineering is now recognized in law as inherently necessary in requirements definition, development planning, and early acquisition • Need for and focus of all engineering in the “pre-acquisition” phases (Materiel Decision Analysis and Technology Development) is dramatically altered: • Earlier engineering involvement (well before Milestone A) • More government expertise to plan for and oversee requirements definition, technology maturation, and competitive prototyping leading to fully expressed system design (the allocated baseline) More informed, “knowledge-based” decision making at MS B Technical Acquisition Excellence for the Warfighter

12. Renewed emphasis on manufacturing across the lifecycle Materiel Development Decision (MDD) DoD 5000.02 and McCain-Levin Change theEarly Acquisition Landscape Early Acquisition PDR CDR System-level CDR with an initial product baseline and a Post-CDR Report to the MDA PDR, PDR Report to the MDA, and Post-PDR-Assessment Competitive Prototypes Post-CDR Assessment by the MDA between EMD sub- phases • What are the implications of these changes for programs? • How can systems engineering enable the program during this early phase? Technical Acquisition Excellence for the Warfighter

13. Planning for Milestone A and Technology Development Phase Documents / activities / data requiring technical input from the Systems Engineer BEFORE Milestone A: • Analysis of Alternatives • Technology Development Strategy • Critical Program Information • Technology maturation plans • Competitive Prototyping plans • Net-Centric Data Strategy • Market Research • Data Management Strategy • Component Cost Estimate • Systems Engineering Plan • Test and Evaluation Strategy The Program Manager’s Challenge: Where to find the data!? Technical Acquisition Excellence for the Warfighter

14. In Conclusion . . . MS B MDD MS A Agreement to pursue a materiel solution Business Decisions Selection of a preferred solution Preferred System Analysis Program Initiation Uncertainty Preferred System Concept Engineering Support Technology Maturation and Prototyping P-PDR-A PDR PDR System Level Specs AoA Preliminary Design CDR CDR Completed Design Materiel Solution Analysis Technology Development “Knowledge-based” Decision Making . . . making acquisition decisions when you have solid evidence and acceptable risk Technical Acquisition Excellence for the Warfighter