2.2. Program Strategy Document Requirements
Program Strategies must satisfy statutory and regulatory information requirements noted in Department of Defense (DoD) Instruction 5000.02.
The Technology Development Strategy (TDS) must be approved prior to entry into the Technology Development Phase and, in most cases, precedes the formal Acquisition Strategy (AS). Two exceptions are:
- If program initiation is declared at Milestone A (currently a potential exception for shipbuilding programs only), information requirements for a TDS will be incorporated in the Acquisition Strategy.
- If a program enters the acquisition decision process at Milestone B or later (the Milestone Decision Authority determines that technology development is not required for the program to proceed).
The TDS serves as the basis for program acquisition activities in the Technology Development Phase, moving toward a Milestone B decision. The TDS should serve as an information baseline for efforts that continually evolve during the progression through the acquisition management system and be incorporated into the initial Acquisition Strategy (AS), as appropriate.
Department of Defense (DoD) Instruction 5000.02 requires an approved AS prior to any final Request for Proposal (RFP) release for the Engineering and Manufacturing (EMD) Development phase and prior to final RFP release for Milestone C or Full Rate Production/Full Deployment Decisions. The Acquisition Strategy should be updated for all major decision points subsequent to the pre-EMD review and whenever the approved strategy changes. An initial MDA-approved Acquisition Strategy is required prior to program initiation (normally MS B). The AS is required to be updated as necessary, minimally at MS C (Low Rate Initial Production or Limited Deployment) and at Full Rate Production or the Full Deployment Decision.
When submitting TDS and AS documents, DoD acquisition policy and associated business practices require Program Managers to describe their business strategies in substantial detail to include overall approach, contract types, source selection procedures, expected competition and incentive structures.
The level of detail described below should be included in all TDS and AS documents to ensure that the Milestone Decision Authority may make well informed assessments of the efficiency and effectiveness of the business arrangements that are planned. If this information is not provided, program strategy approval will be delayed until it is made available.
- Business Strategy: Address the main contracting approach to include contract types, how competition will be sought, promoted and sustained, source selection procedures, provisions, sources, and product support considerations and leasing arrangements.
- Contracting Strategy: Explain and, to the extent necessary, provide the analysis and rationale for the contracting strategy. Justify the use of fixed-price or cost-plus vehicles. Explain why the incentives provided were chosen and why there is confidence that they will successfully motivate the contractor to provide the performance desired by the government.
- Major Contract(s): Identify the number and type of contracts anticipated.
- a. For each major contract planned (greater than $40 million [then-year dollars] for an Major Defense Acquisition Program and greater than $17 million for a Major Automated Information System program) describe: what the basic contract buys; how major deliverable items are defined; options, if any, and prerequisites for exercising them; and the events established in the contract to support appropriate exit criteria for the phase or intermediate development activity.
- b. Indicate whether a competitive award, sole-source award, or multiple-source development with down select to one production contract is contemplated. Describe how the strategy changes from core (initial) to subsequent increments. If a sole source is chosen, identify the exception to full and open competition that applies and provide justification for the duration and timing of the sole-source procurement.
- c. Identify any special contracting considerations. Discuss any unique clauses/special provisions that will be included in the contract. Identify any special test and evaluation, unique tooling, or other similar contractual requirements.
- d. Identify any other pertinent information that may ensure understanding of the contracting strategy to include, but not limited to, projected use of Government Furnished Property, plans to re-use hardware and software, safety office review/involvement, period of performance/length of contract, and contract format.
- e. If a cost-type contract is to be used, provide information (an explanation of technical risk and the steps required to remediate the risk) with supporting documentation to support the Milestone Decision Authority's mandatory assessment that:
- f. If a warranty has been considered, summarize the reasoning. If a product warranty option is being considered, explain the results of the Cost Benefit Analysis to determine if the warranty will be cost beneficial.
- Incentives: For each major contract, describe the contract incentives in detail. State how contract incentives are going to be employed to achieve required cost, schedule, and performance outcomes. If more than one incentive is planned for a contract, the Technology Development Strategy (TDS) and Acquisition Strategy (AS) should explain how the incentives complement each other and do not interfere with one another.
- Technical Data Management: The strategy for Acquisition Category I and II programs shall assess the long-term technical data needs for the system and reflect that assessment in the Technical Data Rights Strategy that is included in both the TDS and the AS. The Technical Data Rights Strategy shall assess the data required to design, manufacture and sustain the system, as well as to support recompetition for production, sustainment or upgrades. It will also address the merits of a price-based option for the future delivery of technical data and intellectual property rights not acquired upon initial contact award and consider the contractors responsibility to verify any assertion of restricted use and release of data.
- Sustainment: The AS should provide an overview of the sustainment-related contract(s) and performance-based agreements with government and industry providers describing how the integrated product support package will be acquired for the system being supported. The discussion should include the contract/agreement and length along with: major terms and conditions; performance measures being used; and the portion of the system covered with the associated sustainment-related functions, plus hardware and data covered in each contract/agreement.
2.2.1. Program Strategies for Increments and Subprograms
An evolutionary acquisition approach delivers capability in increments, recognizing, up front, the need for future capability improvements.
Each increment must be a militarily useful and supportable operational capability that can be developed, produced, deployed, and sustained. Block upgrades, pre-planned product improvement, and similar efforts that provide a significant increase in operational capability are managed as separate increments.
Each increment must be traceable back to an approved requirements document and have its own set of threshold and objective values. Each increment must also have an Acquisition Program Baseline establishing cost, schedule, and performance program goals.
If a major defense acquisition program requires the delivery of two or more categories of end items which differ significantly from each other in form and function, the Defense Acquisition Executive may designate such category of end item as a major subprogram for the purposes of acquisition reporting under Title 10 United States Code. An example of the intended use for subprograms would be the designation of a satellite (subprogram #1) and the affiliated ground control station (subprogram #2) under a total program composed of both elements.
Increments represent operational capabilities; whereas subprograms represent end items that differ significantly from each other in form and function. The premise for establishing increments or subprograms is significantly different, but the reporting mechanisms are very similar.
Department of Defense Instruction 5000.02 requires each increment or subprogram to have its own program strategy document (Technology Development Strategy or Acquisition Strategy), or minimally, have a distinctly separate annex from the ‘core’ program strategy document. When appropriate, an annex for an increment can leverage the core program information.
2.3. Program Strategy Relationship to Other Program Documents
Program Documents should not duplicate content, but rather be managed as an integrated set. The Program Strategy (Technology Development Strategy (TDS) or Acquisition Strategy (AS)) should describe the integrated plans that identify the acquisition approach, the business strategy, overall program schedule, and risk management strategies to meet program objectives while balancing cost, schedule and performance.
Content of other documents, such as the Systems Engineering Plan, Life Cycle Sustainment Plan, Program Protection Plan, and Test and Evaluation Master Plan should all align with the TDS or AS content, with minimal overlap.
2.4. Relationship to Request for Proposal (RFP)
Department of Defense Instruction 5000.02 requires an approved program strategy as a prerequisite for final Request for Proposal (RFP) release: a Technology Development Strategy (TDS) prior to entry into the Technology Development phase and an Acquisition Strategy (AS) prior to entry into Engineering and Manufacturing Development, Low Rate Initial Production (or Initial Deployment), and Full Rate Production (or Full Deployment).
Until the Milestone Decision Authority has approved the program strategy (TDS or AS), the formal RFP cannot be released, nor any action may be taken that would commit the program to a particular contracting strategy.
The efforts defined in the approved program strategy for a given phase of the acquisition life cycle must align with efforts to be put on contract for that phase.
The TDS/AS Outline presented at 2.8 in this chapter of the Guidebook describes the structure for a Program Strategy document.
2.5. Program Strategy Classification Markings
Program Strategy documents must be marked for proper handling. Classified AS or TDS documents (and their appendices) should be appropriately marked and handled in accordance with security classification procedures. At a minimum, a TDS or AS should be marked “For Official Use Only (FOUO)” and handled as “controlled unclassified information“ in accordance with DoD Directive 5230.24. Additionally, if the document contains proprietary information, or is competition sensitive, it should be so marked and appropriately handled.
In addition to displaying the correct markings, it is a good idea for a TDS or Acquisition Strategy to have a distribution statement. An example follows:
Distribution Statement – Distribution authorized to U.S. Government Agencies and their contractors; other requests must be referred to [enter the appropriate Program Executive Officer/Program Management Office], Address, City, State, Zip Code.
2.6. Program Strategy Document Approval Process
A Technology Development Strategy (TDS) or Acquisition Strategy (AS) for an Acquisition Category (ACAT) ID or IAM program requires the concurrence of the Program Manager, the Program Executive Officer (PEO) and the Component Acquisition Executive (CAE) prior to submittal for final approval by the Milestone Decision Authority (MDA). The Under Secretary of Defense (Acquisition, Technology, and Logistics) (USD(AT&L)) is the MDA for ACAT ID programs—and for ACAT IAM programs (unless delegated to the Deputy Chief Management Officer or Department of Defense Chief Information Officer).
For ACAT IC and IAC programs, MDA is delegated to the appropriate CAE by the USD(AT&L).
For Major Defense Acquisition Programs (MDAPs), MDA approval of the Program Strategy document is required prior to release of a Final Request for Proposal. Programs may not proceed beyond a major milestone decision point (A, B, or C), the pre-Engineering and Manufacturing Development (pre-EMD) review, or the Full-Rate Production (FRP) Decision/Full Deployment Decision review without an MDA-approved Strategy.
For ACAT ID, ACAT IAM, and OSD Special Interest programs, program strategy documents are initially submitted to the office of the Director, Acquisition Resources and Analysis (ARA) within the office of the Under Secretary of Defense for Acquisition, Technology and Logistics (USD(AT&L). ARA coordinates the documents with the appropriate stakeholders prior to submitting to the USD(AT&L) for final approval. Submittal of program strategies should be in accordance with the notional timelines specified in the Defense Acquisition Board Preparation section of Chapter 10.
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