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Evolutionary AcquisitionImplementation Challenges for Defense Space Programs
By Mark A. Lorell Julia F. Lowell Obaid Younossi
Rand CorporationCopyright © 2006 RAND Corporation
All right reserved.
Chapter OneIntroduction: The Evolutionary Acquisition Concept
This monograph presents lessons learned on the implementation of evolutionary acquisition (EA) strategies for the procurement of major space defense systems. It focuses on issues of interest to the U.S. Air Force and other Department of Defense (DoD) cost analysis and acquisition management communities.
In May 2003, DoD promulgated its long-anticipated definitive revision of the 5000 series acquisition directives and instructions that govern the acquisition of major weapon systems. These documents mandated EA strategies as the "preferred approach" to satisfying operational needs. Formal adoption and full implementation of EA by DoD was widely viewed at the time as necessitating a major overhaul of DoD acquisition procedures, particularly in the areas of requirements management, budgeting, cost estimating, and elsewhere.
The principal goal of EA strategies is to provide operationally useful capabilities to the warfighter much more quickly than traditional acquisition strategies. Instead of the old approach of "single step to full capability," evolutionary acquisition aims at achieving an overall objective end capability through the more rapid fielding of numerous operationally useful interim threshold capabilities bypursuing less demanding intermediary increments or steps. Thus, DoD defines EA as an approach that
delivers capability in increments, recognizing, up front, the need for future capability improvements. The objective is to balance needs and available capability with resources, and to put capability into the hands of the user quickly. The success of the strategy depends on consistent and continuous definition of requirements, and the maturation of technologies that lead to disciplined development and production of systems that provide increasing capability towards a materiel concept. (DoD, 2003c, Section 3.3.1)
Although reformers have advocated various types of incremental acquisition strategies for years, there had never been a DoD-wide implementation of such a strategy prior to the formal adoption of EA in October 2000 (with final revisions and clarifications in May 2003). EA advocates claim many potential benefits from the adoption of the strategy, while skeptics raise numerous concerns about formidable barriers and challenges to effectively implementing the policy. Yet little objective experience and evidence exists to assess the policy, and very little systematic analysis of what evidence does exist has yet been undertaken.
The overarching objective of this RAND research effort is to assist cost analysts and other elements of the Air Force acquisition management community in formulating cost analysis and program management policies and procedures that anticipate and respond to the prospect of more widespread use of EA strategies. To meet this objective, this project aimed to answer these questions:
What are the status, intent, and programmatic implications of evolutionary acquisition strategies as currently envisioned by senior DoD acquisition policymakers? What programmatic lessons learned are emerging from recent Air Force major space acquisition programs that incorporate key elements of evolutionary acquisition strategies as defined in the revised DoD 5000 series issued in May 2003 and incorporated into the National Security Space Acquisition Policy 03-01 (NSSAP 03-01)? What new policies and methods (if any) should the Air Force cost analysis and acquisition community adopt to assist most effectively in the implementation of evolutionary acquisition on space programs?
In order to provide some insight into possible answers to these questions, this research effort adopted a three-pronged approach. First, the researchers carried out a comprehensive review of published and unpublished reports and other studies on the theory and implementation of evolutionary acquisition. Second, the researchers conducted a wide-ranging series of interviews with senior DoD and Air Force acquisition management officials regarding their understanding of the meaning and implications of DoD's mandated EA policies. Finally, the researchers carefully reviewed five major space acquisition programs that have been recently restructured in accordance with EA concepts, in order to understand lessons learned to date on the implementation of EA. The information on these case studies was derived from open sources and from interviews with senior program officials. The five case studies reviewed are as follows:
Space-Based Space Surveillance (SBSS) System
Rapid Attack Identification, Detection, and Reporting System (RAIDRS)
Global Positioning Satellite (GPS) III
Space-Based Radar (SBR)
Kinetic Energy Interceptor (KEI)
Tables 1.1 and 1.2 list the organizations and the categories or positions of individuals interviewed for this research effort. In addition to the interviews identified in these two tables, the Air Force also invited the researchers to vet initial research findings from this research effort at a closed forum of senior government and industry officials organized by the Space and Missile Systems Center (SMC) Directorate of Contracting ("Teaming for Transformation," 2004). This forum included approximately 100 senior current and former DoD, Air Force, and industry leaders, many of whom provided important feedback for the project research approach and interim findings.
Later, this chapter discusses the rationale for focusing on space programs and for the selection of these specific acquisition efforts.
Why This Project?
Drawing from the brief preceding discussion, the basic rationale justifying the research reported in this monograph can be summarized as follows:
Despite numerous attempts at clarification by the Office of the Secretary of Defense (OSD), the definitions of critical terms related to EA and the key practical elements of specific strategies for implementing EA remain ambiguous and lack clarity, in the view of many cost analysts and acquisition managers. Advocates and opponents of EA present numerous claimed theoretical benefits or likely challenges that will arise from the widespread implementation of EA. Yet little systematic evidence has been collected from actual programs to support the claims of either advocates or opponents of EA.
The remainder of this subsection reviews these points in more detail. It begins, however, with a brief historical examination of the motivations and objectives behind the formulation of EA, and how its advocates originally perceived it.
Dissatisfaction with the Traditional Acquisition Process and the Promise of Evolutionary Acquisition
For decades, observers have criticized the growing length of time required to design and develop major DoD weapon systems, particularly when contrasted with the typical development times for complex commercial products. This criticism became particularly strident in the 1990s, as the cycle times for the development of new generation commercial electronics continued to shrink, leading to situations where electronic components and subsystems designated for use in such complex weapon systems as the F-22 fighter actually became obsolete and disappeared from the marketplace prior to the completion of system development.
The traditional DoD acquisition process, as laid out in the DoD 5000 acquisition policy guidance series, was essentially a rather inflexible, serial, linear, step-by-step approach determined in great detail by an extensive accumulation of DoD bureaucratic tradition, formal policy guidance, regulations, and public law. In addition to the widely recognized problem of inordinately long development cycles that commonly spanned ten to fifteen years, two other key problems particularly caught the attention of senior DoD officials in the late 1990s:
1. The traditional acquisition process often necessitated the identification and detailed formulation of all the program system performance requirements at the very earliest stage of the program, often before a full understanding of the ultimate system performance requirements could be attained, and when the technologies to achieve the necessary capabilities were either immature or unknown. Nonetheless, these requirements, once formally approved, would often become cast in stone as an unchangeable template against which all aspects of the program were judged, regardless of changing or newly emerging operational needs. This could lead to bitter mutual recriminations between the acquisition and the operational user communities, as well as criticism from Congress, on who was responsible for fielding a system of less than optimal capability. The Operational Test and Evaluation (OT&E) community would then dutifully and rigorously test each system to ensure it precisely met the original formal written requirements, even though those requirements might no longer reflect current operational needs because they were formulated so early in the program.
2. The traditional system, following the dictates of public law, required the formal development of a detailed life-cycle cost (LCC) estimate during the early developmental stages of the program. These point estimates might be required to cover many years of technology and system development, as well as procurement, and operations and support periods of 40 years or more. Not surprisingly, these estimates often proved to be unrealistic, because so many uncertainties and technology risks exist early in the developmental cycle. The result was often major cost overruns, schedule slippage, criticism from Congress, and mutual recriminations over who was at fault among the acquisition, user, and contractor communities.
By the mid-1990s, the senior DoD leadership was seriously considering a major overhaul of the entire DoD acquisition process, including a major revision of the DoD 5000 policy documents, to fix these and other perceived procurement process problems. EA rapidly became a central component in this acquisition reform effort. Reformers were inspired by a variety of innovative acquisition approaches being tried outside the mainstream acquisition process at this time. Many of the most important concepts that lay behind the EA concept emerged from early acquisition reform legislation developed in conjunction with Congress and the Defense Advanced Research Projects Agency (DARPA) in the early 1990s to facilitate operational and hardware development of innovative new platforms and technologies, among the most prominent of which were large surveillance unmanned aerial vehicles (UAVs) (Leonard and Drezner, 2002).
The most important acquisition reform tools developed at this time included the Advanced Concept Technology Demonstration (ACTD) designation, and the use of Section 845/804 Other Transaction Authority (OTA). These and other reform measures permitted DARPA to experiment simultaneously with hardware and operational concepts for development of surveillance UAVs without being burdened by the vast regulatory and statutory requirements of the standard DoD acquisition process. Most importantly for the future emergence of the EA concept, the ACTD approach did not necessitate a complete and precise understanding of the eventual operational performance requirements for the system at program inception, or the determination of detailed technical system requirements for the hardware. Rather, the ACTD concept envisioned a highly flexible exploratory technology demonstration process, which would lead to the unfolding of the precise operational utility and technological requirements for a system through feedback from field testing and experimentation with demonstrator prototypes.
With the apparent early success of DARPA ACTD programs such as the Global Hawk and DarkStar UAVs, DoD began searching for ways to transfer some of the key aspects of the more flexible approach of ACTDs to the mainstream world of traditional acquisition programs. Since DoD officials realized that the whole traditional acquisition process could not, and probably should not, be jettisoned in its entirety, the focus shifted to several key elements of ACTDs and other experimental approaches that were thought to be most likely to bring about beneficial results.
On a broad conceptual level, two key principles that were eventually folded into the emerging EA concept could be summarized as follows:
1. The breaking down of large, long, inflexible traditional acquisition programs into several, much shorter, lower risk, more manageable phased increments or spirals
2. The transformation of the early phases of the research and development (R&D) segment of acquisition programs into more flexible technology demonstration programs that would permit greater experimentation with requirements, operational concepts, and technology applications.
Ambiguity and Lack of Clarity in Definitions and Implementation Strategies
By the beginning of the new century, these basic concepts underlying EA had gelled in the minds of senior DoD acquisition managers and reformers, eventually leading to the major revision of the DoD 5000 series promulgated in October 2000 and clarified in May 2003. As noted previously, the revised 5000 series placed a central emphasis on EA as the preferred acquisition approach. The initial promulgation of EA, however, led to considerable confusion and uncertainty within the traditional acquisition community. This was partly because many of the fundamental concepts underpinning DoD's EA strategies were not new, and appeared to some observers to be similar to related concepts tried in the past. Confusion arose in some quarters regarding how EA differed from the earlier concepts. In addition, the original official formulations of EA were less than perfectly clear regarding the definition of many concepts, and the precise means of implementing the policy. Finally, many if not most of the old regulatory requirements, which were usually waived in ACTD programs and other innovative approaches, appeared to some observers to have remained embedded in the new revised 5000 series regulations, which seemed to conflict with the basic goals of acquisition reform.
As ably documented by Richard Sylvester and Joseph Ferrara among others (Sylvester and Ferrara, 2003), the adoption of strategies related to EA has been advocated by various DoD and other studies for at least twenty years. Indeed, as far back as the late 1960s, some DoD officials began urging adoption of a related acquisition strategy called preplanned product improvement (P3I), in which systems would be designed from their inception to incorporate later upgrades and newer technologies as they matured. Phased acquisition was another acquisition reform measure with some characteristics similar to EA that was often advocated in the 1970s and 1980s. Another related concept, spiral development, gained widespread support in the computer software industry during the 1980s. Indeed, according to Sylvester and Ferrara, as early as 1984, the logistics commanders of all three services endorsed evolutionary acquisition as a legitimate strategy and advocated development of a formal policy guide.
Excerpted from Evolutionary Acquisition by Mark A. Lorell Julia F. Lowell Obaid Younossi Copyright © 2006 by RAND Corporation. Excerpted by permission.
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