Software Acquisition

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Contracting 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 5000.87 Section 3.2.d


Consistent with modern software development practices, the acquisition strategy and related program documentation will be tailored to what is needed to effectively manage the program.


Key elements of the acquisition strategy include, but are not limited to:

  • Flexible and modular contract strategy that enables software development teams to rapidly design, develop, test, integrate, deploy, and support software capabilities.
Modular Contracting

Reference Source: GAO Agile Assessment Guide GAO-20-590G

An organization’s contracting process must be deliberate and well executed to support regular program delivery timelines. Contracting strategies, processes, and the culture should create a business environment that supports small, frequent releases and responds to change, taking into consideration programmatic risks and the scope and purpose of a program (e.g., whether it is a large weapon system or small web application). One technique to accomplish this is called Modular Contracting.

Reference Source: OUSD(A&S) Guidance

Modular contracting is the preferred approach for acquiring major software IT systems in accordance with 41 U.S.C. §2308 – Modular Contracting for Information Technology, and implemented by FAR Part 39.103, and may also be considered when acquiring non-major systems. It is intended to reduce program risk and to incentivize contractor performance while meeting the Government’s need for timely access to rapidly changing technology. When using modular contracting, an acquisition of a system of IT may be divided into several smaller acquisition increments that:

1. Are easier to manage individually than would be possible with one comprehensive acquisition

2. Address complex IT objectives incrementally in order to increase the likelihood of achieving workable systems or solutions for attainment of those objectives

3. Provide for delivery, implementation, and testing of workable systems or solutions in discrete increments, each of which comprises a system or solution that does not depend on any subsequent increment in order to perform its principal functions

4. Provide an opportunity for subsequent increments to take advantage of any evolution in technology or needs that occur during implementation and use of the earlier increments

5. Reduce risk of potential adverse consequences for the overall project by isolating and avoiding custom-designed system components.

Modular Contracting Strategy

Reference Source: OUSD(A&S) Guidance

When planning a modular contracting strategy, it is important to understand the program needs and objectives to identify the contract vehicles needed to support the mission. The collection of modular contracts should be expected to change and evolve throughout the development lifecycle, especially as scaling occurs and more development activities are added. For example, modular contracting solutions a program may need to acquire to support an Agile development effort could include, but are not limited to:


  • Sustainment of existing legacy systems – until modernized or no longer needed
  • Infrastructure-as-a-Service (IaaS) subscription needs – establish an accredited cloud-hosted foundational infrastructure layer for compatible platform environments (servers, network, storage, etc.)
  • Platform-as-a-Service (PaaS) subscription needs
  • Services:
    • Cloud development and configuration – establish a cloud-based environment, and/or rehost or re-platform existing software applications in the environment
    • DevSecOps – instantiation of a software delivery pipeline for continuous integration and continuous delivery
    • Agile development team/s – software developers and designers to develop new or update existing solutions
    • Subject matter experts – to enable the Government to efficiently design, secure, and scale its solution architecture including cloud enterprise architects, platform engineers, cybersecurity engineers, software engineers, DevSecOps engineers, Site Reliability Engineers (SREs), etc.
    • Advisory and assistance (A&AS) support – program office support, Agile training, Agile coaching, etc.
  • Microservice Solutions – independent software applications – compatible with PaaS/IaaS solution/s
  • Cybersecurity – security vulnerability protection during software coding development
  • Communication/collaboration tools – to address purchase, installation, configuration, and licensing costs of any software required to support the management, configuration control, and visibility of the work being performed.

Contracting Strategies

Reference Source: Contracting Cone

The Contracting Cone presents the full spectrum of FAR and non-FAR based contracting solutions available for consideration.

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


Contracting Strategies to consider in developing a modular contracting solution include: