DOD INSTRUCTION 5000.85
M
AJOR CAPABILITY ACQUISITION
Originating Component: Office of the Under Secretary of Defense for Acquisition and Sustainment
Effective: August 6, 2020
Change 1 Effective: November 4, 2021
Releasability: Cleared for public release. Available on the Directives Division Website
at https://www.esd.whs.mil/DD/.
Incorporates and Cancels: Sections 1, 4, and 6, and Enclosures 1, 2, 6, and 8 of DoDI 5000.02T,
“Operation of the Defense Acquisition System,” January 7, 2015, as
amended
Approved by: Ellen M. Lord, Under Secretary of Defense for Acquisition and
Sustainment
Change 1 Approved by: Gregory M. Kausner, Performing the Duties of the Under Secretary of
Defense for Acquisition and Sustainment
Purpose: In accordance with DoD Directive (DoDD) 5135.02, this issuance establishes policy and
prescribes procedures that guide the acquisition of major capability acquisition programs, including
major defense acquisition programs (MDAPs); other programs categorized as acquisition category
(ACAT) I; major systems, usually categorized as ACAT II; automated information systems (AIS) (not
managed by other acquisition pathways); and other capabilities developed via the major capability
acquisition pathway. Wholly and majority National Intelligence Program-funded acquisition programs
will be executed in accordance with Intelligence Community policy.
DoDI 5000.85, August 6, 2020
Change 1, November 4, 2021
TABLE OF CONTENTS 2
TABLE OF CONTENTS
SECTION 1: GENERAL ISSUANCE INFORMATION .............................................................................. 4
1.1. Applicability. .................................................................................................................... 4
1.2. Policy. ............................................................................................................................... 4
1.3. Summary of Change 1. .................................................................................................... 4
SECTION 2: RESPONSIBILITIES ......................................................................................................... 6
2.1. Under Secretary of Defense for Acquisition and Sustainment (USD(A&S)). .................. 6
2.2. Secretaries of the Military Departments. .......................................................................... 6
2.3. Military Service Chiefs. .................................................................................................... 6
SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES .......................................................... 8
3.1. General Procedures. .......................................................................................................... 8
a. Program Planning. .......................................................................................................... 8
b. Decision Reviews........................................................................................................... 8
c. DoD Process Relationships. ........................................................................................... 9
3.2. Flexible Implementation. .................................................................................................. 9
3.3. Program ACATs. ............................................................................................................ 10
3.4. Acquisition Process Decisions and Phases. .................................................................... 10
3.5. MDD. .............................................................................................................................. 11
3.6. MSA Phase...................................................................................................................... 11
3.7. Milestone A. .................................................................................................................... 12
3.8. TMRR Phase. .................................................................................................................. 13
3.9. Development RFP Release Decision Point. .................................................................... 14
3.10. Milestone B. .................................................................................................................. 15
3.11. EMD Phase. .................................................................................................................. 15
3.12. Milestone C. .................................................................................................................. 16
3.13. P&D Phase. ................................................................................................................... 17
3.14. FRP Decision or FD Decision. ..................................................................................... 17
3.15. Operations and Support (O&S) Phase. ......................................................................... 18
APPENDIX 3A: ACATS ................................................................................................................. 20
3A.1. Purpose. ........................................................................................................................ 20
3A.2. ACATs. ........................................................................................................................ 20
a. Categories. .................................................................................................................... 20
b. ACAT IB Programs. ..................................................................................................... 21
c. Program Recategorization. ........................................................................................... 22
APPENDIX 3B: PROGRAM INFORMATION ....................................................................................... 23
3B.1. Program Information. ................................................................................................... 23
3B.2. Information Selection. .................................................................................................. 23
APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS .................................... 24
3C.1. Purpose. ........................................................................................................................ 24
3C.2. Program Office Structure and Organizations. .............................................................. 24
a. Program Office Structure. ............................................................................................ 24
b. Joint Program Office Organization. ............................................................................. 24
3C.3. Program Management Responsibilities. ....................................................................... 25
a. Acquisition Strategies. ................................................................................................. 25
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TABLE OF CONTENTS 3
b. Program Baseline Development and Management. ..................................................... 28
c. Investment Management. ............................................................................................. 28
d. Risk Management. ....................................................................................................... 31
e. Configuration Steering Board (CSB). .......................................................................... 33
3C.4. International Acquisition and Exportability. ................................................................ 33
a. International Acquisition and Exportability Planning. ................................................. 33
b. Exportability and International Acquisition Roadmap Study. ..................................... 34
c. International Cooperative Program (ICP) Management. ............................................. 34
3C.5. Industrial Base Analysis and Considerations. .............................................................. 34
3C.6. Records Management. .................................................................................................. 35
GLOSSARY ..................................................................................................................................... 36
G.1. Acronyms. ...................................................................................................................... 36
G.2. Definitions. ..................................................................................................................... 38
REFERENCES .................................................................................................................................. 39
TABLES
Table 1. Description and Decision Authority for ACAT I – III Programs. .................................. 20
FIGURES
Figure 1. Adaptive Acquisition Framework. ..................................................................................5
Figure 2. Major Capability Acquisition Model. ............................................................................10
Figure 3. Options Matrix...............................................................................................................29
Figure 4. Sample Program Cost, Fielding, and Performance Goals Memorandum. ....................30
DoDI 5000.85, August 6, 2020
Change 1, November 4, 2021
SECTION 1: GENERAL ISSUANCE INFORMATION 4
SECTION 1: GENERAL ISSUANCE INFORMATION
1.1. APPLICABILITY.
This issuance applies to OSD, the Military Departments, the Office of the Chairman of the Joint
Chiefs of Staff and the Joint Staff, the Combatant Commands, the Office of the Inspector
General of the Department of Defense, the Defense Agencies, the DoD Field Activities, and all
other organizational entities within the DoD (referred to collectively in this issuance as the “DoD
Components”).
1.2. POLICY.
a. The overarching management principles that guide the defense acquisition system are set
forth in Paragraph 1.2. of DoDD 5000.01.
b. In accordance with DoD Instruction (DoDI) 5000.02, it is DoD policy to deliver
operationally effective, suitable, survivable, affordable, secure, and supportable solutions to the
end user in a timely manner.
(1) To that end, the DoD will prioritize speed of delivery, security, continuous
adaptation, and frequent modular upgrades to ensure a highly effective and lethal force.
(2) To achieve that objective, the DoD will employ an adaptive acquisition framework
(Figure 1), comprised of acquisition pathways, each tailored for the unique characteristics and
risk profile of the capability being acquired.
1.3. SUMMARY OF CHANGE 1.
This change is administrative and:
a. Updates the references list.
b. Removes Appendix 3D of this issuance and updates affected references pursuant to
DoDI 5000.91.
DoDI 5000.85, August 6, 2020
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SECTION 1: GENERAL ISSUANCE INFORMATION 5
Figure 1. Adaptive Acquisition Framework.
December 2019
xxCybersecurity
Path
Selection
Defense
Business
Systems
Middle Tier
of
Acquisition
Acquisition
of Services
Major
Capability
Acquisition
Urgent
Capability
Acquisition
OPERATIONS AND SUSTAINMENT
Business Capability Acquisition Cycle
< 2 years
Software
Acquisition
Rapid
Prototyping
Capability
Need
Identification
Solution
Analysis
Functional
Requirements and
Acquisition
Planning
Acquisition,
Testing, and
Deployment
Capability
Support
Planning
Phase
I1 I2…
MVP MVCR
Rn
OD
Rapid
Fielding
1
0
Materiel
Solutions
Analysis
Technology
Maturation and
Risk Reduction
Engineering and
Manufacturing
Development
Production
and
Deployment
MDD MS A MS B MS C IOC FOC
ATP ATP ATP ATP
In In In
Execution Phase
OD
≤ 5 years
< 1 year
DD
Tenets of the Defense Acquisition System
1. Simplify Acquisition Policy
2. Tailor Acquisition Approaches
3. Empower Program Managers
4. Conduct Data Driven Analysis
5. Actively Manage Risk
6. Emphasize Sustainment
DoDD 5000.01: The Defense Acquisition System
DoDI 5000.02: Operation of the Adaptive Acquisition Framework
Legend:
ATP: Authority to Proceed
DD: Disposition Decision
FOC: Full Operational Capability
I: Iteration
IOC: Initial Operational Capability
MDD
: Materiel Development Decision
MS: Milestone
MVCR: Minimum Viable Capability Release
MVP: Minimum Viable Product
OD: Outcome Determination
R: Release
≤ 5 years
PLAN DEVELOP EXECUTE
1
Form
the
Team
2
Review
Current
Strategy
3
Perform
Market
Research
4
Define
Require-
ments
5
Develop
Acquisition
Strategy
6
Execute
Strategy
7
Manage
Performance
DoDI 5000.85, August 6, 2020
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SECTION 2: RESPONSIBILITIES 6
SECTION 2: RESPONSIBILITIES
The responsibilities in this section are in addition to those specified in DoDD 5000.01.
2.1. UNDER SECRETARY OF DEFENSE FOR ACQUISITION AND SUSTAINMENT
(USD(A&S)).
The USD(A&S) is the Defense Acquisition Executive (DAE) and establishes policies on and
supervises all elements of the Department relating to acquisition (including system design,
development, and production and procurement of goods and services) and sustainment (including
logistics, maintenance, and materiel readiness).
2.2. SECRETARIES OF THE MILITARY DEPARTMENTS.
The Secretary of the Military Department acquiring an MDAP represents the customer (i.e., the
DoD Component(s) fielding the system). The Secretary acquiring an MDAP:
a. In coordination with the Military Service Chiefs, balances resources against priorities and
ensures appropriate trade-offs are made among cost, schedule, technical feasibility, and
performance throughout the life of the program.
b. Ensures that the requirements document supporting a Milestone B or subsequent decision
for an MDAP are not approved until the Service Chief determines in writing that the
requirements in the document are necessary and realistic in relation to the program cost and
fielding targets established pursuant to Section 2448a of Title 10, United States Code (U.S.C.).
2.3. MILITARY SERVICE CHIEFS.
a. The Military Service Chiefs, not including the Commandant of the United States Coast
Guard, assist the Secretary of the Military Department concerned in performing the acquisition-
related functions outlined in Paragraphs (1) through (6):
(1) Decisions regarding the balancing of resources and priorities, and associated trade-
offs among cost, schedule, technical feasibility, and performance on MDAPs.
(2) The coordination of measures to control requirements creep.
(3) The recommendation of trade-offs among life-cycle cost, schedule, and performance
objectives, and procurement quantity objectives, to ensure acquisition programs deliver best
value in meeting the approved military requirements.
(4) Termination of development or procurement programs for which life-cycle cost,
schedule, and performance expectations are no longer consistent with approved military
requirements and levels of priority, or which no longer have approved military requirements.
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SECTION 2: RESPONSIBILITIES 7
(5) The development and management of career paths in acquisition for military
personnel pursuant to Section 1722a of Title 10, U.S.C.
(6) The assignment and training of contracting officer representatives when such
representatives are required to be members of the armed forces because of the nature of the
contract concerned.
b. For MDAPs, the Service Chief, or for joint programs, the Service Chiefs concerned,
concur:
(1) With the need for a materiel solution as identified in the materiel development
decision (MDD) review prior to entry into the materiel solution analysis (MSA) phase.
(2) With the cost, schedule, technical feasibility, and performance trade-offs that have
been made with regard to the program before Milestone A approval is granted pursuant to
Section 2366a of Title 10, U.S.C.
(3) That appropriate trade-offs among cost, schedule, technical feasibility, and
performance objectives have been made to ensure that the program is affordable when
considering the per unit cost and the total life-cycle cost before Milestone B approval is granted
pursuant to Section 2366b of Title 10, U.S.C.
(4) Before Milestone C approval is granted, that the requirements in the requirements
document are necessary and realistic in relation to program cost and fielding targets, pursuant to
Section 2448a of Title 10, U.S.C.
c. The Service Chiefs fielding MDAPs will represent the customer, and will advise the
milestone decision authority (MDA) on trade-offs before Milestones A and B.
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 8
SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES
3.1. GENERAL PROCEDURES.
a. Program Planning.
(1) A rapid, iterative approach to capability development reduces cost, avoids
technological obsolescence, and reduces acquisition risk. Consistent with that intent,
acquisitions will rely on mature, proven technologies and early testing. Planning will capitalize
on commercial solutions and non-traditional suppliers, and expand the role of warfighters and
security, counterintelligence, and intelligence analysis throughout the acquisition process.
(2) Acquisition programs will be designed to facilitate capability enhancements by using
open systems architectures and common, open, and consensus-based standards. An open system
design supports sustainment and rapid integration of new or updated subsystems into the
platform.
(3) To facilitate a flexible and rapid acquisition process, MDAs, program managers
(PMs), and other relevant authorities will implement the processes described in Paragraph 3.2.
b. Decision Reviews.
The purpose of decision reviews embedded in the acquisition procedures described in this
section is to carefully assess a program’s readiness to proceed to the next acquisition phase and
to make a sound investment decision committing the Department’s financial resources.
Consequently, reviews will be issue and data focused to facilitate an examination of relevant
questions affecting the decisions under consideration and to allow the MDA to judge whether the
program is ready to proceed. The policies outlined in Paragraphs (1) through (3) will guide
decision reviews:
(1) The MDA is the sole and final decision authority. Staff members and staff
organizations support and facilitate the MDA's execution of that authority.
(2) The Defense Acquisition Board will advise the DAE on critical acquisition decisions
when the DAE, or designee, is the MDA. The DAE or designee will chair the Defense
Acquisition Board. Similar procedures will be established at the DoD Component level for use
by other MDAs. An acquisition decision memorandum (ADM) will document decisions
resulting from reviews.
(3) Overarching Integrated Product Teams at the OSD level, and similar organizations
within the DoD Components, are expected to collectively assist the MDA in making sound
investment decisions for the department, and to ensure programs are structured and resourced to
succeed. These organizations are not decision bodies and they and their leaders do not supplant
the authority of the PM, Program Executive Officer (PEO), component acquisition executive
(CAE), or DAE.
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 9
c. DoD Process Relationships.
Acquisition, requirements, and budgeting are closely related and must operate simultaneously
in close coordination. Validated requirements provide the basis for defining the products that
will be acquired through the acquisition system. The budgeting process determines DoD
priorities and resource allocations and provides the funds necessary to execute planned
programs. Adjustments may have to be made during a program’s life cycle to keep the three
processes aligned to ensure programs are executable and to adapt to evolving circumstances.
Decisions in this context must consider mission area or portfolio considerations as well as those
directly impacting the program under review.
3.2. FLEXIBLE IMPLEMENTATION.
a. MDAs will structure program strategies and oversight, phase content, the timing and
scope of decision reviews, and decision levels based on the specifics of the product being
acquired, including complexity, risk, security, and urgency to satisfy validated capability
requirements.
b. PMs will “tailor-in” the regulatory information that will be used to describe their program
at the MDD or program inception. In this context, “tailor-in” means that the PM will identify
and recommend for MDA approval, the regulatory information that will be employed to
document program plans and how that information will be formatted and provided for review by
the decision authority.
(1) The PM’s recommendation will be reviewed by the MDA and the decision will be
documented in an ADM.
(2) MDAs will resolve issues related to implementation of this approach, and will
coordinate, when necessary, with other regulatory document approval authorities to facilitate its
implementation.
(3) Statutory requirements will not be waived unless permitted by the relevant statute.
c. Technologies successfully demonstrated in an operational environment via the Rapid
Prototyping procedures in the Middle Tier Acquisition pathway, or other prototyping authorities,
may be transitioned to major capability acquisition programs at decision points proposed by the
PM and approved by the MDA. The technologies may provide the technical foundation for a
formal acquisition program, incrementally improve a program capability in support of approved
requirements, or support the development and insertion of more efficient program components.
Similarly, products and technologies that have been successfully demonstrated via the Rapid
Fielding procedures under the Middle Tier Acquisition pathway may provide the basis for a
program developed in accordance with the procedures in this issuance. PMs for Middle Tier
programs will identify and develop the statutory and regulatory information needed to facilitate
an efficient pathway transition. DoDI 5000.80 provides additional direction for middle tier
acquisitions.
d. The Defense Acquisition Guidebook (DAG), available online at
https://www.dau.edu/tools/dag, provides the acquisition workforce with discretionary best
DoDI 5000.85, August 6, 2020
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 10
practice that should be tailored to the needs of each program. The DAG is intended to inform
thoughtful program planning and facilitate effective program management.
3.3. PROGRAM ACATS.
All major capability acquisition pathway programs are designated by an ACAT. The ACAT
identifies the program’s MDA, required processes, and documents. The details regarding
ACATs, decision authority and associated policy are presented in Appendix 3A.
3.4. ACQUISITION PROCESS DECISIONS AND PHASES.
a. Acquisition decisions will be made at the lowest authorized level, commensurate with the
ACAT and program risk, to ensure they are timely, and made by those with the greatest
knowledge of the program.
b. Figure 2 depicts the major capability acquisition model. The paragraphs that follow
describe the decision points and activity phases that apply to almost any acquisition.
c. Appendix 3B discusses the information requirements that apply throughout the phases and
decision points, subject to PM and MDA decisions and statutory requirements.
Figure 2. Major Capability Acquisition Model.
B
A
C
= Milestone Decision = Decision Point
Legend:
Materiel
Development
Decision
CDD
Validation
Full
Rate Production /
Full Deployment
Decision
Development
RFP
Release
Decision
Initial
Operational
Capability
(IOC)
Full
Operational
Capability
(FOC)
Materiel
Solution
Analysis
Technology
Maturation &
Risk
Reduction
Production &
Deployment
Engineering &
Manufacturing
Development
Disposal
Low Rate Initial Production /
Limited Deployment
Operational Test and
Evaluation (OT&E)
Operations & Support
Sustainment
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 11
3.5. MDD.
a. Purpose.
The MDD is the mandatory entry point into the major capability acquisition process and is
informed by a validated requirements document (e.g., an initial capabilities document (ICD) or
equivalent) and the completion of the analysis of alternatives (AoA) study guidance and the AoA
study plan.
b. At the MDD Review.
The Director of Cost Assessment and Program Evaluation (DCAPE) (or DoD Component
equivalent for ACAT II or below programs) will present the AoA study guidance, and the DoD
Component will present the AoA study plan. For MDAPs, DCAPE issues the AoA study
guidance, and approves the AoA study plan. The DoD Component will provide the plan to staff
and fund program activities up to and including the next decision point, usually Milestone A.
c. Decisions.
The MDA will determine the acquisition phase of entry and the initial review milestone.
MDA decisions will be documented in an ADM. The approved AoA study guidance and study
plan will be attached to the ADM.
3.6. MSA PHASE.
a. Purpose.
The purpose of this phase is to conduct the AoA and other activities needed to choose the
concept for the product to be acquired, to begin translating validated capability gaps into system-
specific requirements, and to conduct planning to support a decision on the acquisition strategy
for the product.
b. Phase Description.
(1) The MSA phase will be guided by the ICD and the AoA study plan. Phase activity
will focus on identification and analysis of alternatives, measures of effectiveness, key trades
between cost and capability, life-cycle cost, schedule, concepts of operations, and overall risk.
The AoA will inform and be informed by affordability analysis, sustainment considerations,
early systems engineering analysis, threat projections, and coalition interoperability as identified
in the ICD.
(2) During this phase, the CAE will select a PM and establish a program office to
complete the actions necessary to plan the acquisition program and prepare for the next decision
point. The actions described in Paragraph 3.2.b. will be completed in time to support planning
for the initial program milestone.
(3) MDAP MDAs will establish program goals consistent with the procedures in
Paragraph 3C.3.(c)(1) of this issuance. An independent cost estimate (ICE) and independent
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 12
technical risk assessment (ITRA) will be conducted before granting Milestone A approval for an
MDAP.
(4) Product support (PS) and sustainment planning begin during this phase and support
the determination of core logistics capability requirements.
(5) The phase ends when the DoD Component has completed the necessary analysis and
the activities necessary to support a decision to proceed to the next decision point/phase in the
acquisition process.
3.7. MILESTONE A.
a. Purpose.
(1) Milestone A approves program entry into the technology maturation and risk
reduction (TMRR) phase, approval of the program acquisition strategy, and release of the final
request for proposals (RFPs) for TMRR activities. A draft capability development document
(CDD) approved by the DoD Component informs the acquisition strategy and the RFP for
TMRR.
(2) Principal considerations include:
(a) Justification for and the affordability and feasibility of the preferred military
solution;
(b) Identification of the technologies that must be matured during the TMRR phase;
(c) The scope of the capability requirement trade space and an understanding of the
priorities within that trade space;
(d) Technical, cost and schedule risks, and the plans and funding to offset them
during the TMRR phase;
(e) A proposed acquisition strategy, including intellectual property (IP), program
protection, and exportability and acquisition planning;
(f) The test strategy;
(g) A life-cycle mission data plan for each intelligence mission data-dependent
program (including cyber) and the projected threat and its impact on the materiel solution.
b. At the Milestone A Review.
(1) The PM will present the acquisition strategy, the business approach, “Should Cost”
targets, framing assumptions, an assessment of program risk and planned mitigation actions, and
initial PS planning.
(2) For MDAPs, the DoD Component will present a quantitatively supported
affordability analysis based on the resources projected to be available in the DoD Component
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 13
portfolio(s) or mission area(s) associated with the program under consideration. Similar,
appropriately-scaled affordability analyses will be required for all other programs. The analysis
will demonstrate the DoD Component’s ability to afford the program over its life cycle, and the
DoD Component will demonstrate that the program will be fully funded within the Future Years
Defense Program (FYDP).
(3) Pursuant to Section 2366a of Title 10, U.S.C., MDAs for MDAPs must determine,
with a high degree of confidence, that the technology developed within the program will not
delay the fielding target of the program. If the MDA determines that a technology related to a
major system component will delay the program:
(a) The technology must be sufficiently matured and demonstrated in a relevant
environment separate from the program, using the prototyping authorities in subchapter II of
Chapter 144B of Title 10, U.S.C., or other authorities, as appropriate.
(b) The MDA must have an effective plan for adoption or insertion by the relevant
program.
c. Decisions.
The MDA will approve the acquisition strategy to determine the materiel solution, the
strategy for the TMRR phase, PM waiver requests, release of the final RFP for the TMRR phase,
exit criteria required to complete TMRR, and entrance criteria for the engineering and
manufacturing development (EMD) phase. The MDA will document decisions in an ADM.
3.8. TMRR PHASE.
a. Purpose.
The TMRR phase is guided by the draft CDD and the acquisition strategy. The purpose of
this phase is to reduce technology, engineering, integration and life-cycle cost risk to the point
that a decision to contract for EMD can be made with confidence in successful program
execution for development, production and sustainment.
b. Phase Description.
(1) This phase includes a mix of activities intended to reduce program risks. These
include the design and requirements trades necessary to ensure an affordable product and an
executable development and production program. Close collaboration with the requirements
community is essential and will inform development and validation of the CDD.
(2) The acquisition strategy will describe the overall approach to acquiring the capability
and include the program schedule, risks, funding, business strategy, and an IP strategy. PS and
sustainment planning continues during this phase and will include consideration of data rights.
Program security and program protection requirements will be evaluated. Unless waived by the
MDA, a preliminary design review (PDR) will be conducted prior to Milestone B. This phase
normally includes multiple competitive sources conducting technology risk reduction activity to
demonstrate new technologies in a relevant environment. An ICE and an ITRA will be
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 14
conducted for MDAPs, before granting Milestone B approval. Development testing will be
guided by the test and evaluation master plan.
c. CDD Validation.
During the TMRR phase, the requirements validation authority will validate the CDD (or
equivalent requirements document) for the program. This action will precede the Development
RFP release decision point.
3.9. DEVELOPMENT RFP RELEASE DECISION POINT.
a. Purpose and Objective.
(1) The purpose of the Development RFP release decision point is to ensure, prior to the
release of the solicitation for EMD, that an executable and affordable program has been planned
using a sound business and technical approach.
(2) The objective is to ensure that the program requirements to be proposed against are
firm and clearly stated, that the risk of committing to development (and eventually production)
has been adequately reduced, that program security has been accommodated, and the program
strategy and business approach are structured to provide value to the government while treating
industry fairly.
b. At the Release Decision.
The PM will summarize TMRR phase progress and results and detail the strategy for the
EMD phase. Specific attention will be given to overall affordability, the strategy for maintaining
competition throughout the program life cycle, source selection criteria, contract incentives, the
IP strategy, threat projections, assessments of foreign ownership, control or influence (FOCI),
and the use of a modular open systems approach (MOSA) to evolve systems capability and
establish and maintain interoperability.
c. Decisions.
The MDA will approve the release of the final RFP for the EMD phase and determine the
preliminary low-rate initial production (LRIP) quantity or, for an AIS, the scope of limited
deployment at this decision point. Decisions resulting from the decision review will be
documented in an ADM. The ADM will include specific criteria required for Milestone C
approval including test and evaluation accomplishments, exportability and international
acquisition planning, LRIP quantities or the limited deployment scope, affordability
requirements and program goals, finalized sustainment metrics, and FYDP funding requirements.
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 15
3.10. MILESTONE B.
a. Purpose.
The Milestone B decision authorizes a program to enter into the EMD phase and commit the
required investment resources to support the award of phase contracts. Requirements for this
milestone may have been satisfied at the Development RFP release decision point; however, if
significant changes have occurred between the two decisions that would alter the decisions made
at the earlier point, those changes will be addressed at the Milestone B review.
b. At the Milestone B Review.
This review requires demonstration that all sources of risk have been adequately mitigated to
support a commitment to design, development and production. Risk sources include, but are not
limited to, technology, threat projections, security, engineering, integration, manufacturing,
sustainment and cost risk. Validated capability requirements are required for all programs. Full
funding in the FYDP, compliance with affordability/program goals demonstrated through
technical assessments and ICEs are required for MDAPs and programs in other categories when
directed.
c. Decisions.
The MDA will approve entry into the EMD phase and formally initiate the program by
approving the acquisition program baseline (APB). The program decisions, EMD phase exit
criteria, approval of the LRIP quantity, and specific technical event-based criteria for initiating
production or fielding at Milestone C will be documented in an ADM.
3.11. EMD PHASE.
a. Purpose.
The purpose of the EMD phase is to develop, build, test, and evaluate a materiel solution to
verify that all operational and implied requirements, including those for security, have been met,
and to support production, deployment and sustainment decisions.
b. Phase Description.
(1) The program will complete all needed hardware and software detailed designs. A
critical design review assesses design maturity, design build-to or code-to documentation, and
remaining risks, and establishes the initial technical baseline. It will be used as the decision
point that the system design is ready to begin pre-production prototype hardware fabrication or
software coding with acceptable risk. If a preliminary design review prior to Milestone B was
waived, it will be scheduled as early as possible during this phase.
(2) Developmental testing and evaluation provides hardware and software feedback to
the PM on the progress of the design process and on the product’s compliance with contractual
requirements, effective combat capability, and the ability to achieve key performance parameters
(KPPs) and key system attributes (KSAs). The DoD Component’s operational test organization
will conduct independent evaluations, operational assessments, or limited user tests to provide
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 16
initial assessments of operational effectiveness, suitability, survivability, and the ability to satisfy
KPPs and KSAs. Opportunities to combine contractor and Government developmental testing
should be maximized, and integrated developmental and operational testing will be conducted
when feasible.
(3) The PM will finalize designs for PS elements and integrate them into a
comprehensive support package that is documented in a PS Strategy (PSS). The program will
demonstrate PS performance through appropriate verification means that satisfy the sustainment
requirements within the MDA-approved program goals established at Milestone A.
(4) Training devices will be planned, funded, designed, and developed in parallel with
the operational system to ensure that the training devices properly replicate the capability in
development. The training strategy will be evaluated during testing and evaluation events.
(5) Release of any RFPs for the production and deployment (P&D) phase must be
approved by the MDA. A current acquisition strategy and applicable elements of the RFP will
be required to support this decision.
(6) The EMD phase will end when the design is stable; the system meets validated
capability requirements demonstrated by developmental, live fire (as appropriate), and early
operational testing; manufacturing processes have been effectively demonstrated and are under
control; software sustainment processes are in place and functioning; industrial production
capabilities are reasonably available; program security remains uncompromised; and the program
has met or exceeds all directed EMD phase exit criteria and Milestone C entrance criteria per the
MDA’s direction. An ICE and an ITRA will be conducted for MDAPs before beginning LRIP.
3.12. MILESTONE C.
a. Purpose.
Milestone C is the point at which a program is reviewed for entrance into the P&D phase.
b. At the Milestone C Review.
The following information will typically be considered: the results of developmental tests
and evaluations and any early operational test and evaluation; evidence that the production
design is stable; the results of an operational assessment (if conducted); the maturity of the
software; any significant manufacturing risks; the status of critical intelligence parameters and
intelligence mission data requirements, relative to fielding timelines; and full funding.
c. Decisions.
The MDA’s decision to approve Milestone C will authorize the program to proceed to the
P&D phase, enter LRIP, or begin limited deployment for AISs, and award contracts for the
phase.
d. High Cost First Article Combined Milestone B and C Decisions.
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 17
Some programs such as spacecraft and ships will not produce prototypes during EMD for use
solely as test articles because of the high cost of each article. In that case, the first article
produced will be tested and evaluated, and then fielded as an operational asset. The acquisition
approach for these programs can be tailored by measures such as combining development and
initial production investment commitments and a combined Milestone B and C. Additional
decision points with appropriate criteria may be established for subsequent production
commitments.
3.13. P&D PHASE.
a. Purpose.
The purpose of the P&D phase is to produce and deploy requirements-compliant materiel
solutions to the receiving operating organizations.
b. Phase Description.
The P&D phase is guided by an updated CDD if required, the acquisition strategy, and the
test and evaluation master plan. In this phase the product is produced and fielded or deployed for
use by operational units.
(1) The phase includes a number of key events: LRIP, personnel training, completion of
developmental test and evaluation (if required), initial operational test and evaluation, and the
full-rate production (FRP) or full-deployment (FD) decision. In this phase, all system
sustainment and support activities are initiated if not already begun, and the appropriate
operational authority will declare initial operational capability (IOC) when the defined
operational organization has been equipped and trained and is determined to be capable of
conducting mission operations. “Should cost” management and other techniques will be used
continuously to control and reduce costs.
(2) For MDAPs, and other programs on the Director of Operational Test and Evaluation
(DOT&E) Oversight List, the DOT&E will provide a report providing the opinion of the
DOT&E as to whether the program is operationally effective, suitable and survivable before the
MDA makes the decision to proceed beyond LRIP or limited deployment. If LRIP is not
conducted for programs on the DOT&E oversight list, production representative test articles
must be provided for the conduct of operational and live fire testing.
3.14. FRP DECISION OR FD DECISION.
The MDA will conduct an FRP decision review to assess the results of initial OT&E and initial
manufacturing to determine whether to proceed to FRP. Proceeding to FRP requires control of
the manufacturing process, acceptable performance and reliability, the establishment of adequate
sustainment and support systems, and for MDAPs, an ICE and an ITRA. This decision will be
informed by consideration of any new validated threat environments that might affect operational
effectiveness. The MDA may consult with the requirements validation authority as part of the
decision making process to ensure that capability requirements are current. The MDA will
document the results of the review in an ADM.
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SECTION 3: MAJOR CAPABILITY ACQUISITION PROCEDURES 18
3.15. OPERATIONS AND SUPPORT (O&S) PHASE.
a. Purpose.
This phase executes the PSS, satisfies materiel readiness and operational support
performance requirements including personnel training, and sustains the system over its life
cycle, including disposal. The O&S phase begins upon fielding of the first system(s), which may
precede IOC, and is based on an MDA-approved PSS.
b. Phase Description.
This phase includes two major efforts: sustainment and disposal. The MDA-approved PSS is
the basis for the activities conducted during this phase.
(1) Sustainment.
During this phase the PM will deploy the support package and monitor its performance
according to the PSS.
(a) The PM will ensure that resources are programmed; IP deliverables and
associated license rights, tools, equipment, and facilities have been programmed and acquired to
support each of the levels of maintenance that will provide PS; and necessary organic depot
maintenance capability, consistent with statute and the PSS, are established. A successful
program meets sustainment performance requirements without compromise to the security and
integrity of the capability or service delivery, remains affordable, and continues to seek cost
reductions by applying “should cost” management and other cost reduction techniques.
(b) During O&S, the PM will measure, assess, and report system readiness using
sustainment metrics, and implement corrective actions for trends diverging from the required
performance outcomes defined in the APB and the PSS. Over the program life cycle, operational
needs, training requirements, technology advances, evolving threats, process improvements,
fiscal constraints, plans for follow-on systems, changes to the industrial base, or a combination
of these influences may warrant revision to the PSS.
(c) When revising the PSS, the PM will revalidate the supportability analysis and
review the most current PS requirements, senior leader guidance, and fiscal assumptions to
evaluate system support changes or alternatives to determine best value.
(2) Disposal.
At the end of its useful life, a system will be demilitarized and disposed of in accordance
with all legal and regulatory requirements and policy relating to safety (including explosives
safety), security, and the environment, in accordance with the PSS. Disposal planning will
include consideration of retirement, disposition, and reclamation.
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APPENDIX 3A: ACATS 19
APPENDIX 3A: ACATS
3A.1. PURPOSE.
This appendix provides the descriptions and dollar thresholds for the ACATs, and prescribes the
policy for assignment of the MDAs.
3A.2. ACATS.
a. Categories.
An acquisition program will be categorized based on the criteria in Table 1. Table 1 contains
the description and decision authority for ACAT I through ACAT III programs. The DAE or
designee will review ACAT ID programs. Pursuant to Section 2430 of Title 10, U.S.C., the
service acquisition executive (SAE) will review ACAT IB programs unless otherwise specified.
The CAE will review ACAT IC programs. The CAE, or the individual designated by the CAE,
will review ACAT II and ACAT III and below programs.
Table 1. Description and Decision Authority for ACAT I – III Programs.
ACAT
Reason for ACAT Designation
Decision Authority
ACAT I
• MDAP
1
(Section 2430 of Title 10, U.S.C.)
o Dollar value for all increments of the program: estimated by the DAE to require
an eventual total expenditure for research, development, and test and evaluation
of more than $525 million in Fiscal Year (FY) 2020 constant dollars or, for
procurement, of more than $3.065 billion in FY 2020 constant dollars
o MDA designation
• MDA designation as special interest
3
ACAT ID: DAE
ACAT IB: SAE
2
ACAT IC: Head of
the DoD Component
or, if delegated, the
CAE
ACAT II
• Does not meet criteria for ACAT I
• Major system (Section 2302d of Title 10, U.S.C.)
o Dollar value: estimated by the DoD Component head to require an eventual total
expenditure for research, development, and test and evaluation of more than $200
million in FY 2020 constant dollars, or for procurement of more than $920
million in FY 2020 constant dollars
o
MDA designation (Section 2302 of Title 10, U.S.C.)
CAE or the
individual
designated by the
CAE
4
ACAT III
• Does not meet dollar value thresholds for ACAT II or above
•
Is not designated a “major system” by the MDA
Designated by the
CAE
4
Footnotes
1. Unless designated an MDAP by the Secretary of Defense (SecDef), AIS programs
5
, Defense Business System
programs, and programs or projects carried out using rapid prototyping or fielding procedures pursuant to Section 804 of
Public Law (PL) 114-92, do not meet the definition of an MDAP.
2. ACAT IB decision authority is assigned pursuant to Section 2430 of Title 10, U.S.C. Paragraph 3A.2.b. provides DoD
implementation details.
3. The Special Interest designation is typically based on one or more of the following factors: technological complexity;
congressional interest; a large commitment of resources; or the program is critical to the achievement of a capability or set
of capabilities, part of a system of systems, or a joint program. Programs that already meet the MDAP thresholds cannot be
designated as Special Interest.
4. As delegated by the SecDef or Secretary of the Military Department.
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APPENDIX 3A: ACATS 20
Table 1. Description and Decision Authority for ACAT I – III Programs, Continued.
Footnotes
5. An AIS is a system of computer hardware, computer software, data or telecommunications that performs functions such
as collecting, processing, storing, transmitting, and displaying information. Excluded are computer resources, both
hardware and software, that are: embedded as an integral part of a weapon or weapon system; used for highly sensitive
classified programs (as determined by the SecDef) or other highly sensitive information technology programs (as
determined by the DoD Chief Information Officer; or determined by the DAE or designee to be better overseen as a non-
AIS program (e.g., a program with a low ratio of research, development, testing, and evaluation funding to total program
acquisition costs or that requires significant hardware development). An AIS that breaches the dollar thresholds in Section
2302d of Title 10, U.S.C., as adjusted, is a “major system.”
b. ACAT IB Programs.
(1) Pursuant to Subsection (d) of Section 2430, of Title 10, U.S.C., the SAE of the
Military Department that is managing an MDAP reaching Milestone A after October 1, 2016 will
be the MDA for the MDAP unless, based on one or more exceptions in the statute, the SecDef
designates an alternate MDA. In accordance with DoDD 5135.02, the SecDef has delegated the
authority to designate an alternate MDA for an MDAP to the USD(A&S).
(2) At least annually, at submission of the Program Objective Memorandum, each SAE
will provide, in writing, sufficient information to allow the USD(A&S) to consider whether any
of the bases for designation of an alternate MDA as set forth in Section 2430(d) of Title 10,
U.S.C., apply. This information must be provided for all programs for which the Military
Department anticipates an MDD or a Milestone A decision (or later milestone decision if this
will be the program's first milestone) in the first year of the Program Objective Memorandum
FYDP and that are estimated to require eventual total expenditures of funds for all increments
that exceed the MDAP dollar value thresholds set in Section 2430 of Title 10, U.S.C., as adjusted
and specified in Table 1.
(3) Programs, for which the SAE is the MDA by operation of Section 2430 of Title 10,
U.S.C., will be designated within the DoD as ACAT IB programs to differentiate these programs
from ACAT ID programs, where the USD(A&S) is the MDA, or ACAT IC programs, where the
USD(A&S) as the DAE has delegated the DAE's decision authority to the SAE. Should the
USD(A&S) designate the DAE or other official as the alternate MDA the ACAT IB program
will be re-designated as ACAT ID.
(4) Pursuant to subparagraph (d)(3)(A) of Section 2430, of Title 10, U.S.C., for programs
for which the USD(A&S) has designated an alternate MDA, the Secretary of the Military
Department concerned, or designee, may request reversion of responsibility back to the SAE.
The USD(A&S) must make a decision with regard to the Military Department's request within
180 days after receiving the request. In the event the MDA for the program reverts back to the
SAE, either at the request of the Military Department or at the DAE's discretion, the program
would revert from its ACAT ID designation to an ACAT IB designation.
(5) SAEs managing ACAT IB programs must continue to comply with all statutes that
require information about an MDAP to be provided to OSD or the Office of the USD(A&S). For
example, Section 2432 of Title 10, U.S.C., requires the SecDef to submit Selected Acquisition
Reports (SARs) for MDAPs. For ACAT IB programs, the Military Departments must continue
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APPENDIX 3A: ACATS 21
to use the Defense Acquisition Visibility Environment system for preparation and management
of APBs and SARs, to enable continued efficient and streamlined execution of Congressional
reporting for all MDAPs, including ACAT IB programs, through the Principal Deputy Assistant
Secretary of Defense (Acquisition Enablers).
(6) The Military Departments will use the Defense Acquisition Management Information
Retrieval system for the ACAT IB program quarterly unit cost reporting required by Section
2433 of Title 10, U.S.C., and will continue to report other quarterly DAE Summary information.
(7) All programs that have been initiated by having entered the acquisition management
system at either Milestone A or a later milestone before October 1, 2016, and that are designated
as either an ACAT ID or ACAT IC program, will continue to follow the acquisition information
and reporting requirements described in this issuance.
c. Program Re-categorization.
The MDA will consider re-categorization when at any point in a program there is program
cost growth within 10 percent of the next highest ACAT level.
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APPENDIX 3B: PROGRAM INFORMATION 22
APPENDIX 3B: PROGRAM INFORMATION
This appendix identifies the information applicable to programs employing the major capability
acquisition pathway and specifies the policy applicable to information selection.
3B.1. PROGRAM INFORMATION.
a. The tables described in Paragraphs 3B.1.a(1) through 3B.1.a (9) identify program
information requirements, and have been placed online at
https://www.dau.edu/mdid/Pages/Default.aspx to facilitate access to content:
(1) Milestone and phase information requirements.
(2) APB.
(3) Statutory program breach definitions.
(4) Recurring program reports.
(5) Exceptions, waivers, and alternative management and reporting requirements.
(6) Cost and software data reporting (CSDR).
(7) Earned value management system (EVMS) application requirements.
(8) EVMS reporting requirements.
(9) Actions associated with Clinger Cohen Act compliance.
b. PMs must comply with the online requirements, consistent with the policy specified in
this issuance. Requirements set out at https://www.dau.edu/mdid/Pages/Default.aspx are to be
treated the same way as they would be if they were published in this document. Substantive
changes to online content not required by law must be formally coordinated in accordance with
the procedures in DoDI 5025.01. Substantive changes include any additional requirements that
add to the financial, personnel, or administrative burden of any of the DoD Components.
3B.2. INFORMATION SELECTION.
The policy outlined in Paragraphs 3B.2.a. and 3B.2.b. will govern the applicability and selection
of program information:
a. Statutory requirements must be satisfied unless the statute allows the requirement to be
waived.
b. Regulatory requirements will follow a “tailored-in” approach, as described in
Paragraph 3.2.b.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 23
APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT
CONSIDERATIONS
3C.1. PURPOSE.
This appendix describes a broad range of policies and procedures applicable to the management
of major capability acquisition programs.
3C.2. PROGRAM OFFICE STRUCTURE AND ORGANIZATIONS.
a. Program Office Structure.
It is a program manager’s responsibility to fully understand the skills and capacity required
for successful program execution and for the CAE to provide those skills to ensure that programs
execute successfully. Program offices will be established prior to Milestone A or earlier as
necessary. Program offices for MDAPs will be staffed in key leadership positions with military
or DoD civilian employees qualified in accordance with DoDI 5000.66. Key leadership
positions include the PM and deputy PM, and the other positions identified in DoDI 5000.66.
b. Joint Program Office Organization.
(1) A joint program office will be established when a defense acquisition program
involves the satisfaction of validated capability requirements from multiple DoD Components or
international partners, and is funded by more than one DoD Component or partner during any
phase of the acquisition process In joint programs, a lead Component will be designated to
manage the acquisition process and act as the acquisition agent for the participating DoD
Components. The participating DoD Components (i.e., those with a requirement for the
program’s products) support and participate with the lead DoD Component in managing the
acquisition process.
(2) Joint programs will be managed in accordance with the provisions of a memorandum
of agreement and with the lead DoD Component’s acquisition procedures and acquisition chain
of command, unless directed otherwise by the DAE.
(3) DoD Components will neither terminate nor substantially reduce participation in joint
MDAPs without capability requirements validation authority review and DAE approval. The
DAE may require a DoD Component to continue some or all funding, as necessary, to sustain the
joint program in an efficient manner, despite approving a request to terminate or reduce
participation. Memorandums of agreement between DoD Components should address
termination or reduced participation by any parties to the agreement. Substantial reduction will
be determined by the MDA in coordination with the requirements validation authority, and is
defined as a funding or quantity decrease that impacts the viability of the program or
significantly increases the costs to the other participants in the program.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 24
3C.3. PROGRAM MANAGEMENT RESPONSIBILITIES.
PMs direct the development, production, deployment, PS, sustainment, and supportability of new
defense systems. Management activities will be designed to achieve the cost, schedule, and
performance parameters specified in the MDA-approved APB, and include PS considerations.
The tools outlined in Paragraphs 3C.3.a. thorugh e. will be used to facilitate effective program
planning and execution.
a. Acquisition Strategies.
(1) Overview.
The PM will develop and execute an approved acquisition strategy. This document is the
PM’s plan for program execution across the entire program life cycle.
(a) The acquisition strategy is a comprehensive, integrated plan that identifies the
acquisition approach and key framing assumptions, and describes the business, technical, PS,
security, and supportability strategies that the PM plans to employ to manage program risks and
meet program objectives. The strategy evolves over time and should continuously reflect the
current status and desired goals of the program.
(b) The strategy should address capability requirements for system performance
likely to evolve during the life cycle because of evolving technology, threat, or interoperability
needs or to reduce program cost or schedule and enable technology refresh. The acquisition
strategy defines the relationship between the acquisition phases and work efforts, and key
program events such as decision points and reviews.
(c) The strategy must reflect the PM’s understanding of the business environment;
technical alternatives; small business strategy; costs, risks and risk mitigation approach;
environment, safety, and occupational health (ESOH) risk and requirements management
approach; contract awards; the incentive structure; test activities; manufacturing and quality
approach and risks; production lot or delivery quantities; operational deployment objectives;
opportunities in the domestic and international markets; foreign disclosure, exportability,
technology transfer, and security requirements; and the plan to support successful delivery of the
capability at an affordable life-cycle price, on a realistic schedule. Acquisition strategies are
baseline plans for the execution of the program and should be prepared and submitted in time to
obtain approval to support more detailed planning and the preparation of RFPs.
(d) The acquisition strategy is an approved plan; it is not a contract. Minor changes
to the plan reflected in the acquisition strategy due to changed circumstances or increased
knowledge are to be expected and do not require MDA pre-approval. Major changes, such as
contract type or basic program structure, do require MDA approval prior to implementation. All
changes should be noted and reflected in an update at the next program decision point or
milestone.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 25
(2) PS and Supportability Planning.
(a) The PM, with the support of the PS manager (PSM), will include PS and
supportability planning, tests, evaluations, and quality reviews in the acquisition strategy and the
integrated master plan/schedule.
(b) The PM uses PS analyses (e.g., failure modes, effects and criticality analysis;
level of repair, source of repair; maintenance task, provisioning) to determine logistics product
data contract and technical data requirements, logistics support analysis, and the maintenance
concept (organic, contractor, or a combination).
(c) The acquisition strategy is the basis of contract data requirement lists and should
consider providing for planning for incremental quality reviews of vendor/original equipment
manufacturer deliverables.
(d) The acquisition strategy and the PSS should include the transition plan from
interim contractor support to organic, contractor logistics support, or a combination of both.
Based on the results of the product support business case analysis (PS BCA), the acquisition
strategy should clearly document sustainment and O&S cost risk management, and the cost to
reduce risk, thereby providing cost transparency and traceability throughout the life cycle.
(3) Business Approach.
(a) The business approach detailed in the acquisition strategy should be designed to
manage the risks associated with the product being acquired. It should fairly allocate risk
between industry and the government. The approach will be based on a thorough understanding
of the risks associated with the product being acquired (including security, FOCI, supply chain
risks to acquisition, and industrial base concerns) and the steps that should be taken to reduce
and manage that risk. The business approach should be based on market analysis that considers
market capabilities and limitations.
(b) The contract type and incentive structure should be tailored to the program and
designed to motivate industry to perform in a manner that rewards achievement of the
government’s goals. The incentives in any contract strategy should be significant enough to
clearly promote desired contractor behavior and outcomes that the government values, while also
being realistically attainable. When risk is sufficiently reduced, PMs will consider the use of
fixed-price contracts when the use of such contracts is cost-effective.
(4) Competition.
(a) The acquisition strategy will address how program management will create and
sustain a competitive environment, from program inception through sustainment. Program
management should use competition at various levels to create competitive environments that
encourage improved performance and cost control. Decisions made in the early phases of the
acquisition process can either improve or reduce program management’s ability to maintain a
competitive environment throughout the program life cycle.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 26
(b) Strategies to be considered include: competitive prototyping, dual sourcing, and a
modular open systems approach that enables competition for upgrades, acquisition of complete
technical data packages, and competition at the subsystem level. This also includes providing
opportunities for small business and organizations employing those with disabilities.
(5) MOSA.
Pursuant to Section 2446a of Title 10, U.S.C., PMs are responsible for evaluating and
implementing MOSA to the maximum extent feasible and cost effective. This approach
integrates technical requirements with contracting mechanisms and legal considerations to
support a more rapid evolution of capabilities and technologies throughout the product life cycle
through the use of architecture modularity, system interfaces that are compliant with widely
supported and consensus-based standards, if they are available and suitable, and appropriate
business practices.
(a) In general, the acquisition strategy for a system should identify where, why, and
how MOSA will be used in the program.
1. To enable incremental development, and to enhance competition, innovation,
and interoperability, MDAPs that receive Milestone A or B approval after January 1, 2019, must
be designed and developed with MOSA to the maximum extent practicable.
2. For an MDAP that uses MOSA, the acquisition strategy must clearly describe:
a. How MOSA will be used, including business and technical considerations.
b. The differentiation between the major system platform and major system
components being developed under the program, as well as major system components developed
outside the program that will be integrated into the MDAP.
c. The evolution of capabilities that will be added, removed, or replaced in
future increments.
d. The additional major system components that may be added later in the life
cycle.
e. How IP and related issues, such as technical data deliverables, will be
addressed.
f. The system integration and system-level configuration management
approach to ensure the system can operate in the applicable cyber threat environment.
(b) The MDA for an MDAP that uses MOSA must ensure that the RFPs for the EMD
phase and the P&D phase describe the MOSA and the minimum set of major system components
that must be included in the system design.
(c) Additional information about using MOSA appears at https://www.dau.edu/aaf.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 27
b. Program Baseline Development and Management.
The APB documents the program cost, schedule, and performance baselines, and is the
fundamental binding agreement between the MDA, the CAE if applicable, the PEO, and the PM.
The PM is responsible for developing the APB. KPPs from the validated CDD are listed,
verbatim, in the APB. The APB serves as the basis for reporting to the MDA through the DoD
management information system.
c. Investment Management.
(1) MDAP Goal Development Procedures.
The procedures outlined in Paragraphs 3C.3.c.(1)(a) through (d) are applicable to all
MDAPs initiated after October 1, 2017, without regard to what milestone initiates the program.
(a) Immediately following completion of the AoA and the final out brief to the Study
Advisory Group, the MDA will provide the Joint Staff, the USD(A&S), the Under Secretary of
Defense for Research and Engineering, and the DCAPE, a complete options matrix (Figure 3),
and the access necessary to complete independent analysis in their area of responsibility. The
analysis will address the AoA results and consider the aggregated risk regarding technical
feasibility, cost, schedule, and affordability. The analytical results will be submitted to the MDA
within 30 days of the AoA out brief to support a goal establishment meeting (GEM) and the
MDA’s goal decision.
(b) Within 30 days of the AoA out brief, the MDA will co-chair a GEM with the
component Vice Chief of Staff or the Vice Chief of Naval Operations (or for ACAT ID
programs, the Vice Chairman of the Joint Chiefs of Staff). The GEM will be supported by the
organizations mentioned above and will discuss the analysis and the recommended cost, fielding,
and performance goals.
(c) The MDA will consider the advice provided by the OSD and Joint Staff, approve
the goals for cost, schedule, and performance, and document the decision in a program goals
approval memorandum, similar to that portrayed in Figure 4. The MDA must approve the goals
before funds are obligated for technology development, systems development, or production.
The initial goals will inform MDAP initiation.
(d) The MDA is responsible for monitoring the goals. If the estimated procurement
unit cost for the program is higher than the program cost target, or if the estimated date for IOC
for the baseline description for the program exceeds the fielding target, the MDA will re-assess
the program and, if justified, increase the program cost target or increase the fielding target prior
to the next milestone or production decision in consultation with the OSD advisors identified in
Paragraph 3C.3.c.(1)(a). The new goals must be approved before the program can proceed
through a milestone event.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 28
Figure 3. Options Matrix.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 29
Figure 4. Sample Program Cost, Fielding, and Performance Goals Memorandum.
(2) Cost Baseline Control and Use of “Should Cost” Management.
For MDAPs, it is DoD policy to budget to the DCAPE ICE unless an alternative estimate
is specifically approved by the MDA. PMs will also develop a “should cost” estimate as a
management tool to control and reduce cost. PMs should not allow the ICE to become a self-
fulfilling prophecy.
(a) “Should cost” is a management tool designed to proactively target cost reduction
and drive productivity improvement into programs. “Should cost” management challenges
managers to identify and achieve savings below budgeted most-likely costs.
DoDI 5000.85, August 6, 2020
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 30
1. “Should cost” analysis can be used during contract negotiations, particularly
for sole source procurements, and throughout program execution including sustainment. PMs
are to proactively seek out and eliminate low-value-added or unnecessary elements of program
cost, to motivate better cost performance wherever possible, and to reward those that succeed in
achieving those goals. “Should cost” estimates used in contract negotiations will be based on the
government’s reasonable expectation of successful contractor performance, consistent with the
contractor’s previous experience and other relevant data.
2. Realized “should cost” savings will be retained at the lowest organizational
level possible and applied to priority needs.
3. “Should cost” applies to programs in all ACATs, in all phases of the product’s
life cycle, and to all elements of program cost.
(b) Program management will develop, own, track, and report against “should cost”
targets. Estimates and results will be provided at milestone reviews and at specified decision
points. PMs will report progress against “should cost” goals via OSD- or DoD Component-
specified procedures.
(3) EVM.
(a) EVM is one of DoD’s and industry’s most powerful program planning and
management tools. It is normally used in conjunction with cost plus and fixed-price incentive
contracts with discrete work scope.
(b) The purpose of EVM is to ensure sound planning and resourcing of all tasks
required for contract performance. It promotes an environment where contract execution data is
shared between project personnel and government oversight staff and in which emerging
problems are identified, pinpointed, and acted upon as early as possible.
(c) EVM provides a disciplined, structured, objective, and quantitative method to
integrate technical work scope, cost, and schedule objectives into a single cohesive contract
baseline plan called a performance measurement baseline for tracking contract performance.
Tables accessible at https://www.dau.edu/mdid/Pages/Default.aspx summarize EVM
applicability and reporting requirements.
d. Risk Management.
(1) PMs are responsible for prioritizing programmatic risks and mitigating them within
program constraints. Most of program management is about the process of eliminating
programmatic risk over the life of the program. Formal risk management is one tool to
accomplish that objective. Top program risks and associated risk mitigation plans will be
detailed in the program acquisition strategy and presented at all relevant decision points and
milestones. The PM will consider the risk management techniques outlined in Paragraphs
3C.3.d.(1)(a) through (l):
(a) Prototyping at the system, subsystem, or component level; and competitive
prototyping, where appropriate.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 31
(b) Modeling and simulation, to include the need for development of any new
modeling and simulation tools to support a comprehensive risk management and mitigation
approach.
(c) Technology demonstrations and decision points to discipline the insertion of
planned technologies into programs or the selection of alternative technologies provide
additional discussions of technical management activities.
(d) Intelligence analyses, data dependencies, and threat projections.
(e) Multiple design approaches.
(f) Alternative designs, including designs that meet requirements but with reduced
performance.
(g) Phasing program activities or related technology development efforts to address
high-risk areas early.
(h) Manufacturability.
(i) Industrial base availability and capabilities (further discussed in Paragraph 3C.5.).
(j) Analysis or detailed identification of sub-tiers in the prime contractor supply
chain.
(k) Independent risk assessments by outside subject matter experts.
(l) Providing schedule and funding margins for identified risks.
(2) The PM is responsible for integrating ESOH considerations into the decision-making
process.
(a) Prior to exposing people, equipment, or the environment to known system-related
hazards, PMs are responsible for documenting the associated risks and for ensuring that ESOH
risks have been accepted by the following acceptance authorities: the CAE for high risks, PEO-
level for serious risks, and the PM for medium and low risks. User-representative approval is
required prior to high and serious risk acceptance. For joint programs, the ESOH risk acceptance
authorities reside within the lead DoD Component.
(b) The PM will manage schedule and cost risks associated with statutory
requirements in PL 91-190 and Executive Order 12114, and other statutes and regulations as
applicable, to assure timely production, testing and fielding events. The PM will manage
program risks from compliance with other ESOH requirements, such as hazardous materials
regulations, impacting system performance and readiness, including those impacting
international acquisition and exportability. DoDI 5000.91 provides additional information.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 32
e. Configuration Steering Board (CSB).
The CAE for each DoD Component will form and chair a CSB with broad executive
membership, as identified in Section 814 of PL 110-417, as amended.
(1) The CSB will meet at least annually to review all requirements changes, critical
intelligence parameter changes, and any significant technical configuration changes for ACAT I
programs in development, production, and sustainment that have the potential to result in cost
and schedule impacts to the program. De-scoping options will also be considered. CSBs will
review potential requirements changes and propose to the requirements authority for validation
those changes that may be necessary to achieve affordability or program goal constraints or that
will result in a more cost effective product. Changes that increase cost will not normally be
approved unless funds are identified and schedule impacts are addressed.
(2) If the SAE determines in writing that there have been no changes to program
requirements or adversary advancements against critical intelligence parameters in the preceding
year, the CSB is not required to meet.
3C.4. INTERNATIONAL ACQUISITION AND EXPORTABILITY.
a. International Acquisition and Exportability Planning.
PMs will integrate international acquisition and exportability planning into the program’s
acquisition strategy beginning at the entry milestone and continuing through all phases of the
acquisition process. PMs will:
(1) Design the system for exportability to foreign partners, except when the program has
an MDA-approved waiver allowing for a U.S.-only design. PMs for MDAPs pursuing a
U.S.-only design and not planning for system export require an MDA-approved exportability
design waiver which must be reviewed at each milestone. If a program has been approved for a
waiver for a U.S.-only design, the MDA will notify the USD(A&S) and the requirements
validation authority.
(2) Plan for the demand and likelihood of cooperative development or production, and
foreign sales (e.g., direct commercial sales or foreign military sales), early in the acquisition
process, and consider U.S. export control laws, regulations, and DoD policy for foreign transfers
when formulating and executing the acquisition strategy in accordance with DoDI 2040.02. In
preparing for an international acquisition effort, PMs should consult with the appropriate
technology security and foreign disclosure authorities (e.g., a principal disclosure authority or
designated disclosure authority) to determine whether classified or controlled unclassified
information can be disclosed to other governments or international organization participants.
Failure to consider security requirements prior to obtaining foreign commitments on involvement
can result in program delays at critical stages of the program.
(3) Pursue cooperative opportunities and international involvement throughout the
acquisition life cycle to enhance international cooperation and improve interoperability in
accordance with DoDI 2010.06.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 33
(4) Ensure that all efforts to design and implement exportability to foreign partners are
consistent with Sections 2357 and 2457 of Title 10, U.S.C., and Section 1049 of PL 115-232, and
other applicable statutory authority.
b. Exportability and International Acquisition Roadmap Study.
For systems with export markets, the programs must conduct an exportability roadmap study
beginning no later than Milestone B. Additional guidance regarding the content of the study is
included in the DAG.
c. International Cooperative Program (ICP) Management.
(1) An ICP is any acquisition program or technology project that includes participation
by the United States and one or more foreign nations, through an international agreement, during
any phase of a system’s life cycle. All ICPs will consider applicable U.S.-ratified materiel
international standardization agreements in accordance with the Chairman of the Joint Chiefs of
Staff Manual for the Operation of the Joint Capabilities Integration and Development System
(JCIDS), and fully comply with foreign disclosure, export control, technology transfer, program
protection, and all applicable security requirements. Programs containing classified information
and/or controlled unclassified information will have a delegation of disclosure authority letter or
other written authorization issued by the DoD Component’s cognizant foreign disclosure office
prior to entering discussions with potential foreign partners. When pursuing ICPs, staff members
are encouraged to use the streamlined agreement procedures overseen and managed by the
USD(A&S).
(2) DoD Components will notify and obtain DAE approval before terminating or
substantially reducing MDAP participation in ICPs under signed international agreements. The
DAE may require the DoD Component to continue to provide funding for the program. A
substantial reduction is defined as a funding or quantity decrease that impacts program viability
or significantly increases costs to the other program participants.
(3) Foreign military sales or direct commercial sales of major defense equipment prior to
successful completion of operational test and evaluation require USD(A&S) approval (i.e., a
Yockey Waiver).
3C.5. INDUSTRIAL BASE ANALYSIS AND CONSIDERATIONS.
a. Industrial base analysis is a continuing process with two primary components, both of
which rely in part on information from program management. The first gathers program specific
industrial base information to create the appropriate acquisition strategy for a program; the
second engages throughout the program life cycle to provide feedback and updates. The
objective is to ensure that the DoD can:
(1) Identify and support economic and stable development and production rates.
(2) Identify and mitigate industrial capabilities risks such as single points of failure and
unreliable suppliers.
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APPENDIX 3C: ADDITIONAL PROGRAM MANAGEMENT CONSIDERATIONS 34
(3) Avoid, to the maximum extent practicable, lock-in to sole and single source suppliers
at any tier.
(4) Support resilience of critical defense industrial base capabilities.
(5) Support DoD’s management of defense procurement surges and contractions.
(6) Avoid, to the maximum extent practicable, exposure to FOCI risks associated with
adversary nations.
b. Program management is responsible for incorporating industrial base analysis, to include
capacity and capability considerations, into acquisition planning and execution. The industrial
base considerations should be documented in the acquisition strategy and include identification
of industrial capability problems (e.g., access to raw materials, export controls, FOCI concerns,
production capabilities) that have the potential to impact the DoD near- and long-term, and
identification of mitigation strategies that are within the scope of program management.
Program management provided information is aggregated with other sources of information at
CAE and DAE levels to inform Service- and DoD-level industrial base decisions.
3C.6. RECORDS MANAGEMENT.
PMs must comply with the records management requirements of Chapter 31 of Title 44, U.S.C.
and DoDI 5015.02 for the information created, collected, and retained in the form of electronic
records. DoDI 5000.82 provides additional guidance on records management for programs
containing information technology.
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Change 1, November 4, 2021
GLOSSARY 35
GLOSSARY
G.1. ACRONYMS.
A
CRONYM
M
EANING
ACAT
acquisition category
ADM
acquisition decision memorandum
AIS
automated information systems
AoA
analysis of alternatives
APB
acquisition program baseline
ATE
automatic test equipment
BCA
business case analysis
CAE
component acquisition executive
CDD
capability development document
CPC
corrosion prevention and control
CSB
Configuration Steering Board
CSDR
cost and software data reporting
DAE
Defense Acquisition Executive
DAG
Defense Acquisition Guidebook
DCAPE
Director of Cost Assessment and Program Evaluation
DFARS
Defense Federal Acquisition Regulation Supplement
DLA
Defense Logistics Agency
DMSMS
diminishing manufacturing sources and material shortages
DoDD
DoD directive
DoDI
DoD instruction
DOT&E
Director of Operational Test and Evaluation
EMD
engineering and manufacturing development
ESOH
environment, safety, and occupational health
EVMS
earned value management system
FD
full-deployment
FOCI
foreign ownership, control or influence
FRP
full-rate production
FY
fiscal year
FYDP
Future Years Defense Program
GEM
goal establishment meeting
ICD
initial capabilities document
ICE
independent cost estimate
ICP
international cooperative program
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GLOSSARY 36
A
CRONYM
M
EANING
ILA
independent logistics assessment
IOC
initial operational capability
IP
intellectual property
ITRA
independent technical risk assessment
JCIDS
Joint Capabilities Integration and Development System
KPP
key performance parameter
KSA
key system attribute
LRIP
low-rate initial production
MDA
milestone decision authority
MDAP
major defense acquisition program
MDD
materiel development decision
MOSA
modular open systems approach
MSA
materiel solution analysis
O&S
operations and support
P&D
production and deployment
PL
Public Law
PEO
program executive officer
PM
program manager
PS
product support
PSM
product support manager
RAM
reliability, availability, and maintainability
RFP
request for proposal
RSSP
replaced system sustainment plan
SAE
service acquisition executive
SCRM
supply chain risk management
SecDef
Secretary of Defense
SR
sustainment review
TMRR
technology maturation and risk reduction
U.S.C.
United States Code
USD(A&S)
Under Secretary of Defense for Acquisition and Sustainment
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GLOSSARY 37
G.2. DEFINITIONS.
A complete glossary of acquisition terms is maintained on the Defense Acquisition University
website. The Defense Acquisition University Glossary can be found at
https://www.dau.edu/tools/t/DAU-Glossary.
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REFERENCES 38
REFERENCES
Aerospace Industries Association, National Aerospace Standard, 411, Hazardous Materials
Management Program,” current version
Aerospace Industries Association, National Aerospace Standard, 411-1, “Hazardous Materials
Target List,” current version
Chairman of the Joint Chiefs of Staff Manual for the Operation of the Joint Capabilities
Integration and Development System
1
Defense Federal Acquisition Regulation Supplement, current version
Director of Cost Assessment and Program Evaluation, “Operating and Support Cost-Estimating
Guide,” March 2014
2
DoD Directive 4151.18, “Maintenance of Military Materiel,” March 31, 2004, as amended
DoD Directive 5000.01, “The Defense Acquisition System.” May 12, 2003, as amended
DoD Directive 5135.02, “Under Secretary of Defense for Acquisition and Sustainment
(USD(A&S)),” July 15, 2020
DoD Instruction 2010.06, “Materiel Interoperability and Standardization with Allies and
Coalition Partners,” July 29, 2009, as amended
DoD Instruction 2040.02, “International Transfers of Technology, Articles, and Services,”
March 27, 2014, as amended
DoD Instruction 3110.05, “Readiness-Based Material Condition Reporting for Mission-Essential
Systems and Equipment,” September 25, 2006, as amended
DoD Instruction 4140.67, “DoD Counterfeit Prevention Policy,” April 26, 2013, as amended
DoD Instruction 4151.20, “Depot Maintenance Core Capabilities Determination Process,” May
4, 2018, as amended
DoD Instruction 4151.22, “Condition Based Maintenance Plus (CBM+) for Materiel
Maintenance,” October 16, 2012, as amended
DoD Instruction 4160.28, “DoD Demilitarization (DEMIL) Program,” April 7, 2011, as amended
DoD Instruction 4245.14, “DoD Value Engineering (VE) Program,” October 26, 2012, as
amended
DoD Instruction 5000.02, “Operation of the Adaptive Acquisition Framework,” January 23,
2020
DoD Instruction 5000.66, “Defense Acquisition Workforce Education, Training, Experience, and
Career Development Program,” July 27, 2017, as amended
DoD Instruction 5000.67, “Prevention and Mitigation of Corrosion on DoD Military Equipment
and Infrastructure,” February 1, 2010, as amended
DoD Instruction 5000.73, “Cost Analysis Guidance and Procedures,” March 13, 2020
1
Available at https://www.jcs.mil/; requires authorized log-in
2
https://www.cape.osd.mil/files/OS_Guide_v9_March_2014.pdf
DoDI 5000.85, August 6, 2020
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REFERENCES 39
DoD Instruction 5000.80, “Operation of the Middle Tier of Acquisition (MTA),” December 30,
2019
DoD Instruction 5000.82, “Acquisition of Information Technology,” April 21, 2020
DoD Instruction 5000.91, “Product Support Management for the Adaptive Acquisition
Framework,” November 4, 2021
DoD Instruction 5015.02, “DoD Records Management Program,” February 24, 2015, as
amended
DoD Instruction 5025.01, “DoD Issuances Program,” August 1, 2016, as amended
DoD Instruction O-5240.24, “Counterintelligence (CI) Activities Supporting Research,
Development, and Acquisition (RDA),” June 8, 2011, as amended
DoD Manual 4140.01, Volume 3, “DoD Supply Chain Materiel Management Procedures:
Materiel Sourcing,” October 9, 2019
DoD Manual 4160.21, Volume 1, “Defense Materiel Disposition: Disposal Guidance and
Procedures,” October 22, 2015, as amended
DoD Manual 4160.21, Volume 2, “Defense Materiel Disposition: Property Disposal and
Reclamation,” October 22, 2015, as amended
DoD Manual 4160.21, Volume 3, “Defense Materiel Disposition: Reutilization, Transfer, And
Sale of Property,” October 22, 2015, as amended
DoD Manual 4160.21, Volume 4, “Defense Materiel Disposition: Instructions for Hazardous
Property and Other Special Processing Materiel,” October 22, 2015, as amended
DoD Manual 4160.28, Volume 1, “Defense Demilitarization: Program Administration” August
9, 2017, as amended
DoD Manual 4160.28, Volume 2, “Defense Demilitarization: Demilitarization Coding,” March
9, 2017, as amended
DoD Manual 4160.28, Volume 3, “Defense Demilitarization: Procedural Guidance,” June 7,
2011, as amended
Executive Order 12114, “Environmental Effects Abroad of Major Federal Actions,” January 4,
1979
Performance Based Logistics Guidebook: A Guide to Developing Performance-Based
Arrangements, 2016, as amended
3
Public Law 91-190, “National Environmental Policy Act of 1969,” January 1, 1970, as amended
Public Law 110-417, “The Duncan Hunter National Defense Authorization Act for Fiscal Year
2009,” October 14, 2008
Public Law 111-23, “Weapon Systems Acquisition Reform Act of 2009,” May 22, 2009
Public Law 112-81, “National Defense Authorization Act for Fiscal Year 2012,” December 31,
2011
3
https://www.dau.edu/guidebooks/Shared%20Documents%20HTML/PBL%20Guidebook.aspx
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Change 1, November 4, 2021
REFERENCES 40
Public Law 112-239, “National Defense Authorization Act for Fiscal Year 2013,” January 2,
2013
Public Law 113-66, “National Defense Authorization Act for Fiscal Year 2014,” December 26,
2013
Public Law 114-92, “National Defense Authorization Act for Fiscal Year 2016,” January 6, 2015
Public Law 115-91, “National Defense Authorization Act for Fiscal Year 2018,” January 3, 2017
Public Law 115-232, “The John S. McCain National Defense Authorization Act for Fiscal Year
2019,” August 13, 2018
Specification Number DI-IPSC-81427 B, “Software Development Plan (SDP),” March 13, 2017
4
Specification Number DI-IPSC-81429 A, “Software Transition Plan (STrP),” January 10, 2000
5
United States Code, Title 10
United States Code, Title 40
United States Code, Title 44
4
http://everyspec.com/DATA-ITEM-DESC-DIDs/DI-IPSC/DI-IPSC-81427B_55763/
5
http://everyspec.com/DATA-ITEM-DESC-DIDs/DI-IPSC/DI-IPSC-81429A_3757/
