Middle Tier of Acquisition (MTA)
Costs & Funding
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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 5000.80, Paragraph 3.1.b
Acquisition and Funding Strategies. DoD Components will develop a process to implement acquisition and full funding strategies for the program. This process will result in an acquisition strategy, which includes security, schedule and production risks, and a cost estimate.
Cost of Organizing and Hosting Prototype Evaluations
Reference Source: DoD Prototyping Handbook, Nov 2019
The type of evaluation conducted and the level of realism pursued will determine the effort and cost associated with the evaluation. The more realistic the environment simulating the capability gap for which a prototype is being evaluated, the greater the effort and higher the cost of organizing and hosting the evaluation. In some cases, organizations will offer evaluation events to a large number of technology projects seeking to be transitioned to operational use by the warfighter in order to maximize the efficiency of the event as well as to ensure that the evaluation addresses as many of the doctrine, organization, training, materiel, leadership and education, personnel, and facilities (DOTMLPF) domains of the warfighter’s capability gap as possible.
CAPE Estimate of Life-cycle Costs
Reference Source: DoDI 5000.73, Paragraph 3.1.b.(1)
CAPE will conduct an estimate of life-cycle costs for programs likely to exceed acquisition category (ACAT) I threshold pursued using the MTA rapid prototyping pathway. CAPE may, in its discretion, delegate the authority for the conduct of the cost estimate to the Service Cost Agency (SCA). Estimates for rapid prototyping programs that do not exceed the ACAT I threshold must be conducted in accordance with guidance issued by the relevant SCA.
Preparation of Estimates of Life-Cycle Costs for MTA Programs
Reference Source: DoDI 5000.73, Paragraph 3.4.g
Figure 7 describes the typical timeline of events and deadlines to support the timely completion of an estimate of life-cycle costs for MTA rapid prototyping and fielding programs.
The PMO must submit a comprehensive program description to the SCA, no later than 10 days after the ADM documenting the DoD Component’s decision to pursue a program using the rapid prototyping or fielding pathway is signed. The program description must provide a sufficient level of detail upon which to base the cost estimate. The PMO may submit a CARD; however, a CARD is not required.
No later than 14 days after the ADM documenting the DoD Component’s decision to pursue a program using the rapid prototyping or fielding pathway is signed, the director of the relevant SCA will meet with the CAPE Deputy Director for Cost Assessment (DDCA). At the meeting, DDCA will determine whether CA will prepare the life-cycle cost estimate or whether the responsibility will be delegated to the SCA.
The estimate of life-cycle costs should be completed no later than 60 days after the ADM documenting the DoD Component’s decision to pursue a program using the rapid prototyping or fielding pathway is signed. A summary of the final cost estimate must be documented in a dated memorandum signed by the SCA Director or DDCA, as relevant, with copies delivered to the relevant defense acquisition executive, service acquisition executive, program manager, MTA governance board, and CAPE.
Figure 7. Timeline for Preparation of Rapid Prototyping and Fielding Cost Estimates
CAPE Cost Reporting Guidance for MTA
Table 1 of DoDI 5000.73 "Cost Analysis Guidance and Procedures" lists the Cost Data Reporting Requirements and when they are required.
Funding Prototyping Projects
Reference Source: DoD Prototyping Handbook, Nov 2019
Possibly the biggest challenge to experimentation is securing funding for the experiment or to apply the recommendations resulting from the experiment. When the initiation of a prototyping project is stymied or the developed prototype never makes it past the “valley of death” due to inappropriate or unavailable funds, the transformative effect of prototyping can be lost. In its report, “Weapon Systems: Prototyping Has Benefited Acquisition Programs, but More Can Be Done to Support Innovation Initiatives” (GAO-17-309), GAO points out that DoD’s funding structure and budget process create challenges both for obtaining funding to start projects and for transitioning projects to the acquisition domain at the conclusion of the project. DoD’s rigid funding structure regulates the type of technology development that an organization can pursue.
Likewise, DoD’s Planning, Programming, Budgeting, and Execution (PPBE) process makes it difficult for prototyping projects to obtain necessary funding when it’s needed. The PPBE process takes nearly two years from the time a funding need is identified to the time funding is available. In the fast-paced world of technology development, this lag in funding can prevent the timely development and deployment of a capability needed to address an emerging threat. DoD is working on developing a more strategic approach to funding innovation. Until that is in place, however, Congress has provided authorities and funded some accounts outside of acquisition programs that can be tapped into for prototyping projects. The following is a summary of some of the authorities, funding vehicles, and DoD offices that can be looked into as potential funding sources for their prototyping projects.
Reprogramming Funds for Prototyping Projects
Reference Source: USD (Comptroller) Budget Execution Reprogramming Homepage
A reprogramming…is the movement of funds from one appropriation to another or between legal subdivisions within an appropriation.
Given that the PPBE process may not be responsive for initiating an MTA program, it may be necessary to conduct a reprogramming action to garner the necessary near-term funds and congressional new start authorization. A reprogramming action may be above or below the statutorily established threshold which is determined by the funding appropriation. Below threshold reprogrammings (called BTRs) can be approved at the agency level but cannot provide new start authority. Above threshold reprogrammings require prior approval from the chairman and the ranking member of the House Appropriations Committee (HAC), House Armed Services Committee (HASC), Senate Appropriations Committee (SAC), and Senate Armed Services Committee (SASC) but can provide new start authority.
The BTR threshold is limited to $10M for RDT&E funds and $20M for Procurement funds.
Reference Source: DoD 7000.14-R Financial Management Regulation, Volume 3, Chapter 6, Section 060401, Sept 2015
ATRs are submitted on different cycles throughout the year. The first type is for specific requirements, which usually are combined [from amongst the Services] and submitted monthly. The second type is the annual Omnibus reprogramming action submitted prior to June 30 of each year
Programs are advised to consult with their Chief Financial Officers on the organizational process for submitting a reprogramming request.
DoD Rapid Prototyping Fund
Summary of DoD Rapid Prototyping Fund
- For acquisition programs under the rapid prototyping pathway
- Consists of appropriated funds and those credited by section 828
- Managed by a senior DoD official
- Shall notify the congressional defense committees of all transfers to Services for rapid prototypes
For full text, see part d of NDAA for FY16, Section 804
Other Potential Funding Sources
Reference Source: DoD Prototyping Handbook, Nov 2019
OUSD(A&S) Small Business Innovation Research (SBIR) Program
By funding small business innovation, the SBIR program encourages small businesses to engage in DoD’s R&D efforts. The SBIR budget represents over $1 billion in research funds annually. The SBIR program is managed by OUSD(A&S)’s Office of Small Business Programs.
OUSD(R&E) Rapid Innovation Fund (RIF)
The purpose of the RIF program is to fund small business innovative technologies that address operational challenges and transition them into defense acquisition programs. The RIF program seeks input from DoD offices to establish the requirements that are included in their annual solicitation. These programs are targeted to cost less than $3 million and complete within 24 months. RIF is administered by OUSD(R&E) and the DoD Office of Small Business Programs.
OUSD(R&E)/Developmental Test, Evaluation & Prototyping (DTEP) Funding Elements
OUSD(R&E)/DTEP has authority over five funding elements focused on identifying, developing, and rapidly delivering prototype capabilities to meet DoD needs. DTEP established a single call for proposals to ease the burden on Service and CCMD staffs seeking solutions to existing and emerging military capability gaps. DTEP manages its prototyping portfolio through a Joint Mission Forum and the Prototyping Senior Steering Group (PSSG) and leverages existing JS processes via the Joint Force Integration Cell (JFIC) to inform stakeholders on DoD-wide prototyping activities within specific mission domains. The PSSG provides recommendations and includes participation from the JS, CCMDs, Services, Agencies, and OUSD(R&E) Assistant Directors for the DoD modernization areas. The programs that follow are managed within OUSD(R&E)’s Prototypes and Experiments office.
- OUSD(R&E)/DTEP Emerging Capabilities Technology Development (ECTD)
The ECTD program pursues risk-reducing technology prototypes and demonstrations of cuttingedge land, sea, air, and space systems for the Joint warfighter across four lines of efforts: concept development, Joint experimentation, Joint prototyping, and red-teaming. These projects can start any time during the year and are targeted to cost less than $6 million and complete within 36 months. Additionally, the ECTD program funds venues where new technologies and concepts can be evaluated.
- OUSD(R&E)/DTEP Joint Capability Technology Demonstration (JCTD)
JCTD funds innovative prototyping projects that provide the Joint Force with a decisive technical advantage. The goal of the program is to rapidly develop, assess operational utility of, and transition needed capability to the Joint warfighter. These projects are targeted to cost less than $100 million and to complete within 48 months.
- OUSD(R&E)/DTEP Quick Reaction Special Projects (QRSP)
The QRSP program funds projects that mature emerging technologies to address immediate conventional and irregular warfare needs of the Joint warfighter. These projects can start any time during the year and are targeted to cost less than $2 million and complete within 18 months.
- OUSD(R&E)/DTEP Rapid Prototyping Fund (RPF)
The RPF seeks endorsed proposals from DoD Component headquarters for prototyping projects that deliver innovative capability in support of USD(R&E)’s “DoD Road-to-Dominance” modernization priorities. RPF funds projects of significant scope and complexity in the $20M range that are targeted to complete within 5 years. Proposals must demonstrate new capabilities that meet emerging military needs, be demonstrated in an operational environment, and provide a warfighter with residual operational capability.
- OUSD(R&E)/DTEP Rapid Prototyping Program (RPP)
RPP funds projects that rapidly develop, demonstrate, and deliver fieldable prototypes to meet existing and emergent Joint warfighter needs; drive down technical and integration risk; and generate Joint warfighter feedback that results in affordable and realistic requirements. These projects are targeted to complete within 12 months.
DoD Component Guidance
Note that DoD Component MTA Implementation policies and guidance are currently being updated to be consistent with the newly published DODI 5000.80 (effective 30 Dec 2019).
Reference Source: Air Force Guidance Memorandum for Rapid Acquisition Activities, 27 June 2019
4.1. Funding for rapid acquisition activities must be reasonably anticipated by the expected date of commitment to enable efficient personnel and contracting actions. Projected initiation date and criteria will be documented in the Acquisition Strategy Document (ASD).
4.1.1. Rapid prototyping and fielding efforts funded using the DoD Rapid Prototyping Fund may be subject to additional DoD guidance.
4.2. Funding for rapid acquisition activities will be managed using the normal Planning, Programming, and Budgeting Execution process managed by the Air Force and Department of Defense. Each program manager (PM) should keep the Office of the Assistant Secretary of the Air Force for Financial Management (SAF/FM) informed of additional schedule acceleration that is achievable should additional funding be provided. SAF/FM will handle these opportunities using the UFR process.
Reference Source: AFPD 65-5, 28 Dec 2018
Non-Advocate Cost Assessment (NACA) is an analysis of program cost / price, as well as schedule and technical risk, prepared by an organization not directly responsible for the development, acquisition, or support of the program. NACAs are designed to support the AFCS and acquisition milestone decision process, and can range from a simple sufficiency review of an existing estimate to a complete ICE. The NACA should include a cost risk/uncertainty analysis (when possible) and complete documentation.
Reference Source: ASA(ALT) Middle Tier of Acquisition Policy, 20 March 2020, Enclosure 1
[The required program acquisition strategy will include] a cost estimate identifying the full funding required. Program cost and funding plan, including cost, schedule and performance metrics.
Reference Source: ASA(ALT) Middle Tier of Acquisition Policy, 20 March 2020, Enclosure 2
Funding for MTA programs will be managed using the normal Planning, Programming, Budgeting, and Execution process.
PEOs/ PMs shall use current available funding and have a funding plan to execute their programs. PEOs/ PMs will keep the Deputy Assistant Secretary of the Army (Plans, Programs and Resources) (DASA(PPR)) informed of additional schedule acceleration that is achievable should additional funding be provided. DASA(PPR) will provide this information to the Assistant Secretary of the Army (Financial Management and Comptroller) for potential inclusion on the Unfunded Requirements List or in future Reprogramming Requests.
Reference Source: USSOCOM Middle Tier Acquisition Authorities and Guidance, 1 Aug 2018
Approved Resources: In order to meet the schedule constraints of an MTA strategy, by definition, the funding resources for an MTA may not have been explicitly resourced via the POM/Budget/Spend plan process. For the current authority, there is no set-aside rapid prototyping or rapid fielding funding. The Acquisition Team must have command-approved resources to execute the MTA strategy. The VCDR will approve any required funding realignments or reprogrammings via the SPP process. Whenever possible, anticipated MTA’s should be included in budget exhibits and budget briefings to Congress to ensure confidence that we are executing appropriated funds within Congressional intent. If an MTA is initiated after Budget Exhibit submission, the MDA will coordinate with SOLA to inform the PSM’s from the four Defense Committees.
- Rapid Prototyping: For RDTE to support Rapid Prototyping efforts, USSOCOM currently resources an Engineering Analysis line for advanced concept development and prototype development in the “SOF Advanced Technology Development” Rl. This funding is specifically intended to mature technology in preparation for fielding. All program 6.7 Rl line descriptions should address rapid prototyping explicitly in support of the program acquisition strategy. If resources for a rapid prototyping effort are not available within the SOST Rl or the appropriate commodity-based Rl, then a reprogramming action will be required. An ATR will likely not be responsive enough to meet the schedule constraints of an MTA. For BTR actions, we will use the SPP to ensure full transparency and approval of any fund ing reprogrammings in support of an MTA.
Financial Management: The greatest challenge for the BFM, in support of the PM, will be to identify appropriate funds for the initiation of an MTA which may be required in the execution or budget years. The BFM must also ensure stability of funds in the subsequent POM build to ensure fie lding is achieved on schedule.