10.1. Decision Points

DEFENSE ACQUISITION GUIDEBOOK
Chapter 10 -- Decisions, Assessments, and Periodic Reporting

10.1. Decision Points

10.1.1. Types of Decision Points

10.1.1.1. Defense Business System (DBS) Decision Points

10.1.1.2. Decision Reviews

10.1.2. Decision Point Certifications

10.1.2.1. Milestone A Certification Requirements

10.1.2.2. Milestone B Certification Requirements

10.1. Decision Points

10.1.1. Types of Decision Points

There are two types of decision points for Major Defense Acquisition Programs and Major Automated Information Systems: milestone decisions and other decision review points. Each such point results in a decision to initiate, continue, advance, change direction in, or terminate a project or program work effort or phase. The type and number of decision points may be tailored to program needs. The Milestone Decision Authority approves the program structure, including the type and number of decision points, as part of the program (technology development or acquisition) strategy.

Major decision points (including milestone decisions) authorize entry into the major acquisition process phases:

• Material Development Decision -- entry into Materiel Solution Analysis;
• Milestone (MS) A – entry into Technology Development;
• Pre-EMD Review
• Milestone B – entry into Engineering and Manufacturing Development;
• Milestone C – entry into Production & Deployment (Low Rate Initial Production (LRIP) for Major Defense Acquisition Programs and Major Programs, Production or Procurement for non-major programs that do not require LRIP, or Limited Deployment for operational testing for Major Automated Information Systems or software with no production components); and
• Full Rate Production or Full Deployment.

The statutory and regulatory information requirements specified in DoD Instruction 5000.02 support these major decision points.

10.1.1.1. Defense Business System (DBS) Decision Points

The BCL acquisition business model described in DTM-11-009, 12/09/2011 and described in Chapter 12 governs the decision process for DBSs. Although the major milestones have the same names as those in the standard defense acquisition decision framework, the phases are different:

• Material Development Decision -- entry into Investment Management;
• Milestone (MS) A – entry into Prototyping;
• Authorization to Proceed
• Pre-Engineering Development
• Milestone B – entry into Engineering Development;
• Milestone C – entry into Limited Fielding; and
• Full Deployment.

Additionally, the principles of BCL can be applied at the increment and at the release level. (There may be multiple releases within an increment.) Multiple increments may also be approved concurrently if they have well defined and approved requirements, are fully funded, and have appropriate entrance and exit criteria. For Increment two (2) and beyond, the Milestone Decision Authority must grant Authorization to Proceed (ATP) and document it in an Acquisition Decision Memorandum (ADM). ATP serves as the initiation of the 5-year period for time-certain delivery of capability to ensure compliance with section 2445c of title 10, United States Code.

10.1.1.2. Decision Reviews

Decision reviews assess progress and authorize (or halt) further program activity. The review process associated with each decision point typically addresses the program affordability and cost effectiveness; program progress, risk, and trade-offs; strategy, including maintaining competition and the business arrangement (contract type and incentive structure), program funding, and the development of exit criteria for the next phase or effort.

The regulatory information required to support both milestone decision points and other decision reviews should be tailored to support the review, but must be consistent with the requirements specified in DoD Instruction 5000.02.

10.1.2. Decision Point Certifications

The Milestone Decision Authority for an MDAP signs a certification memorandum for record prior to Milestone A and Milestone B as specified in sections 2366a and 2366b of title 10, United States Code.

10.1.2.1 Milestone A Certification Requirements

A major defense acquisition program may not receive Milestone A approval until the Milestone Decision Authority certifies, after consultation with the Joint Requirements Oversight Council on matters related to program requirements and military needs, to the following, without modification, from 10 USC 2366a, as amended by Public law 111-23, "Weapon Systems Acquisition Reform Act of 2009", and the FY 2012 NDAA:

1. that the program fulfills an approved initial capabilities document;
2. that the program is being executed by an entity with a relevant function as identified by the Secretary of Defense;
3. that a determination of applicability of core depot-level maintenance and repair capability has been made;
4. that an analysis of alternatives has been performed consistent with the study guidance developed by the Director of Cost Assessment and Program Evaluation;
5. a cost estimate for the program has been submitted, with the concurrence of the Director, Cost Assessment and Program Evaluation, and the level of resources required to develop, procure, and sustain the program is consistent with the priority level assigned by the Joint Requirements Oversight Council; and
6. [only include if the system duplicates a capability already provided by an existing system] the duplication provided by this system and (name of existing system) program is necessary to appropriate.

See Figure 10.1.2.1.F1 for a sample Milestone A certification memorandum.

Figure 10.1.2.1.F1. Sample Required Statement for Milestone Decision Authority Certification Memorandum Prior to Milestone A Approval.

10.1.2.2 Milestone B Certification Requirements

A major defense acquisition program may not receive a Milestone B approval until the Milestone Decision Authority certifies, without modification, from 10 USC 2366b of title 10, United States Code and as amended by Public law 111-23, "Weapon Systems Acquisition Reform Act of 2009", and the FY 2012 NDAA, that:

1. I have received a business case analysis and certify on the basis of the analysis that:
   1. the program is affordable when considering the ability of the Department of Defense to accomplish the program's mission using alternative systems;
   2. appropriate tradeoffs among cost, schedule, and performance objectives have been made to ensure that the program is affordable when considering the per unit cost and total acquisition cost in the context of the total resources available during the period covered by the future-years defense program submitted during the fiscal year in which the certification is made;
   3. reasonable cost and schedule estimates have been developed to execute, with the concurrence of the Director, Cost Assessment and Program Evaluation, the product development and production plan under the program;
   4. funding is available to execute the product development and production plan under the program, through the period covered by the future-years defense program submitted during the fiscal year in which the certification is made, consistent with the estimates described in subparagraph (C) for the program; and
2. I have received the results of the preliminary design review and conducted a formal post-preliminary design review assessment, and certify on the basis of such assessment that the program demonstrates a high likelihood of accomplishing its intended mission; and
3. I further certify that:
   1. appropriate market research has been conducted prior to technology development to reduce duplication of existing technology and products:
   2. the Department of Defense has completed an analysis of alternatives with respect to the program;
   3. the Joint Requirements Oversight Council has accomplished its duties with respect to the program pursuant to section 181(b) of title 10 United States Code, including an analysis of the operational requirements for the program;
   4. the technology in the program has been demonstrated in a relevant environment as determined by the Milestone Decision Authority on the basis of an independent review and assessment by the Assistant Secretary of Defense, Research and Engineering;
   5. life-cycle sustainment planning, including corrosion prevention and mitigation planning, has identified and evaluated relevant sustainment costs, throughout development, production, operation, sustainment, and disposal of the program, and any alternatives, and that such costs are reasonable and have been accurately estimated;
   6. an estimate has been made of the requirements for core depot-level maintenance and repair capabilities, as well as the associated logistics capabilities and the associated sustaining workloads required to support such requirements; and
   7. the program complies with all relevant policies, regulations, and directives of the Department of Defense.

See Figure 10.1.2.2.F1 for a sample Milestone B certification memorandum.

Figure 10.1.2.2 F1. Sample Required Statement for Milestone Decision Authority Certification Memorandum Prior to Milestone B Approval

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