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Command, Control, and Communications (Deployed Systems)

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Our Defense acquisition programs involve expenditures of such enormous amounts of money that any management improvement or tech

nological breakthrough, no matter how small, can provide a very significant payoff in absolute dollars and operational advancement. Considering the challenges at hand and our restrained resources we must continually look for ways by which we can improve our acquisition management. The new Federal policies and practices for acquisition management, prescribed in OMB Circular A-109, have done much to add impetus to our efforts and while we have moved ahead in implementing many new policies and practices, a great deal more has to be done. NEW ACQUISITION STRUCTURE

A.

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Realignment of our personnel resources at the OSD level will enable us to develop an integrated approach to management more in line with the business-oriented approach taken by firms in the private sector. Our purpose is to construct an acquisition policy that spans the system life cycle and brings to bear the business management factors necessary to develop and produce a successful product. Our principal thrust is to establish an acquisition team responsible at the policy level for all major system program activities, including research, engineering, production, industrial readiness, standardi zation and contracting.

2.

Consolidation of Acquisition Functions

We have instituted a life cycle business management strategy

for our major systems.

Programmatic and technical aspects have been

combined and our Deputy Under Secretaries for Research and Engineering are now responsible for research and development, production and life cycle considerations for their assigned programs. This alignment is similar to the product line assignment of responsibilities in industry where market development and production functions are grouped under one product line manager.

We intend to construct a DoD-wide acquisition strategy that will highlight priorities, risks and magnitude of programs. Emphasis will be placed on introducing more active competition throughout development, beginning with solicitations for alternate concepts and extending, where practical, into production. Selection of the right type of contract and the use of incentive clauses and other provisions will be made commensurate with program experience and risk. promoting a direct tie between those who develop the policy within OSD and those who manage the execution of that policy. Our objective is to bring the manager into closer association with his business-oriented functions and tailor our policy to the environment of the manager.

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Although we believe the DoD's acquisition process is fundamentally sound, we must search for ways to improve the system. The changes we make should be in recognition of and within the framework of the competitive environment of our free enterprise system. Profit and other incentives will be emphasized to motivate the firms in our defense industry to better self-management rather than the regulatory approach emphasized in the past. As our contractors become more competitive, we

in DoD will share in the benefits of better performance and lower cost.

2. Front End Management

Much of the improvement in the acquisition process will have

the objective of improving the stature of DoD as a stable and reliable customer. Program stretchouts, abortive program starts and costly contract cancellations undermine public and Congressional confidence. They also are disruptive to the government-contractor relationship. To remedy these problems it is important that the acquisition process be started off properly. We must first be sure of the validity and priority of the mission task we want to perform and, equally important, determine whether we can afford it. At stake is the premature commitment to a false and costly start, an unproductive industry buildup and injury to government-industry relationships.

Particular attention has been paid to strengthening the first phase or the front end of the acquisition process, so that proper management attention and visibility are focused on a new program before it starts. A program "GO" decision will be given when the Secretary of Defense approves a mission need document termed "Mission Element Need Statement" (MENS). The MENS will form the basis for advising industry and the academia of our mission deficiencies and requesting their alternative proposals for solution in a wide latitude of conceptual approaches.

We have been conducting concept formulation and mission need determinations in the DoD for some time. The MENS approach formalizes the process in such a way that program initiation, operational need date and affordability are highlighted. In a program's early phase,

alternate conceptual solutions will be identified.

The most promising

ones will be competitively selected and then evaluated. Our new front end policy will require, among other things, a very careful assessment of design and manufacturing technologies, logistics factors and an

early, aggressive pursuit of program voids and deficiencies.

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A second change in the acquisition process is the coupling of a tentative decision to produce and deploy with the decision to enter full-scale development. Since full-scale development entails a major expense, we should also explicitly consider the follow-on affordability issue at the same time. Hopefully, the affordability issue will be faced early enough to prevent the government and industry from committing resources to the full-scale development of a system wnich will never be produced.

4. Revisions to DoDDs 5000.1 and 5000.2

In January 1977 DoD's two top policy regulations on the acquisition process, DoDD 5000.1, "Major System Acquisition" and DoDD 5000.2, "Major System Acquisition Process", were completely revised and reissued. These revisions implement the principal recommendations of the Commission on Government Procurement as set forth by the Office of Federal Procurement Policy (OFPP) in OMB Circular A-109, issued in April 1976.

The changes to DoDDs 5000.1 and 5000.2 cover the entire acquisition process. The importance of and priority to be afforded

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