Major Capability Acquisition (MCA)

AAF  >  MCA  >  Develop Strategies  >  Acquisition Strategy

Acquisition Strategy

How to use this site

Each page in this pathway presents a wealth of curated knowledge from acquisition policies, guides, templates, training, reports, websites, case studies, and other resources. It also provides a framework for functional experts and practitioners across DoD to contribute to the collective knowledge base. This site aggregates official DoD policies, guides, references, and more.

DoD and Service policy is indicated by a BLUE vertical line.

Directly quoted material is preceeded with a link to the Reference Source.

Reference Source: DODI 5000.85 Appendix 3C.3.a.

Acquisition Strategy 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. The acquisition strategy is a comprehensive, integrated plan that identifies the acquisition approach and key framing assumptions, and describes the business, technical, product support, 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.

 

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.

 

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.

 

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.

 

Program Planning

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 tester involvement.  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. 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. To facilitate a flexible and rapid acquisition process, MDAs, program managers (PMs), and other relevant authorities will implement certain processes described in [Flexible Implementation].

 

Flexible Implementation

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.

 

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.

  • The PM’s recommendation will be reviewed by the MDA and the decision will be documented in an ADM.
  • 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.
  • Statutory requirements will not be waived unless permitted by the relevant statute.

 

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.

 

The Defense Acquisition Guidebook (DAG), available online at https://www.dau.edu/tools/dag, provides the acquisition workforce with discretionary best 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.

 

Product Support and Supportability Planning

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. 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).

 

The acquisition strategy is the basis of contract data requirement lists and should provide incentives to the PS provider by planning for incremental quality reviews of vendor/original equipment manufacturer deliverables per Defense Federal Acquisition Regulation Supplement (DFARS) quality clauses and government requirements. 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.

 

Business Approach

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.

 

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.

 

Competition

The acquisition strategy will address how program management will create and sustain a competitive environment, from program inception through sustainment.  Program management should use both direct competition at various levels and indirect means 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. 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.

 

Modular Open Systems Approach (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.

 

In general, the acquisition strategy for a system should identify where, why, and how MOSA will be used in the program. 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.

 

For an MDAP that uses MOSA, the acquisition strategy must clearly describe:

  1. How MOSA will be used, including business and technical considerations.
  2. 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.
  3. The evolution of capabilities that will be added, removed, or replaced in future increments.
  4. The additional major system components that may be added later in the life cycle.
  5. How IP and related issues, such as technical data deliverables, will be addressed.
  6. The system integration and system-level configuration management approach to ensure the system can operate in the applicable cyber threat environment.

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.

International Acquisition and Exportability

Reference Source: DODI 5000.85 Appendix 3C.4

 

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:

  • 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.
  • 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.
  • Pursue cooperative opportunities and international involvement throughout the acquisition life cycle to enhance international cooperation and improve interoperability in accordance with DoDI 2010.06.

 

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 Defense Acquisition Guidebook.

 
International Cooperative Program (ICP) Management

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).

 

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.

 

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).

Industrial Base Analysis and Considerations

Reference Source: Draft DODI 5000.85 Appendix 3C.5

 

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:

  • Identify and support economic and stable development and production rates.
  • Identify and mitigate industrial capabilities risks such as single points of failure and unreliable suppliers.
  • Avoid, to the maximum extent practicable, lock-in to sole and single source suppliers at any tier.
  • Support resilience of critical defense industrial base capabilities.
  • Support DoD’s management of defense procurement surges and contractions.
  • Avoid, to the maximum extent practicable, exposure to FOCI risks associated with adversary nations.

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.

Contracting Strategy

Reference Source: DAG CH 1-4.1 Acquisition Strategies and Plans

The statutory topics required in an Acquisition Strategy include… Contract Type Determination (including multiyear).

10 USC 2305, Contracts: Planning, Solicitation, Evaluation, and Award Procedures establishes a requirement for acquisition planning. According to 10 USC 2305 (a)(1)(A), in preparing for the procurement of property or services, the head of an agency shall— (ii) use advance procurement planning and market research.

 

Reference Source: Contracting Cone

Contracting Cone showing a spectrum of contracting strategies, which are categorized by FAR and Non-FAR/Statutory authorities.

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. A comparison of contract types is available here. Additionally, a contract type matrix is available here and maps contract types allowed for each of the major strategies outlined in the contracting cone.

DAU offers Continuous Learning Modules (CLMs) for a variety of contracting topics here. Links to relevant CLM modules are offered on each MCA pathway contracting page in addition to relevant DAU Functional Gateways, Communities of Practice, and other resources.