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New DoD Acquisition Guidelines Emphasize Cost of Programs

Dec. 18, 2013 - 11:18AM   |  
By MARCUS WEISGERBER   |   Comments
Frank Kendall, the Pentagon's undersecretary for acquisition, technology and logistics, recently completed a laborious two-year rewriting of a document know as DoD Instruction 5000.02.
Frank Kendall, the Pentagon's undersecretary for acquisition, technology and logistics, recently completed a laborious two-year rewriting of a document know as DoD Instruction 5000.02. (Staff photo)
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WASHINGTON — A major update of the Pentagon’s acquisition bible makes cost control and cost management a higher priority during the procurement process.

The new guidance focuses heavily on setting realistic program goals by aligning weapons requirements with long-term spending realities.

The plan is to “get the programming community and the requirements community to sit down and figure out what kind of cost constraint they’re going to have to live in based on future budgets they can expect,” Frank Kendall, undersecretary for acquisition, technology and logistics, said during a Dec. 13 interview at the Pentagon.

Kendall recently completed a laborious two-year rewriting of a document know as DoD Instruction 5000.02, frequently called “Five-thousand two” by defense insiders.

In addition to the long-term spending emphasis, the new guidance formalizes Better Buying Power acquisition initiatives developed by Kendall and his predecessor Ashton Carter.

The 5000.02 update calls for locking in program requirements sooner by adding a new decision point earlier in the acquisition process, Kendall said. It also puts forth “much more specific guidance” about affordability analysis and spending caps.

“Basically it tells the services, and ... the operational communities and the programming communities that they need to do long-term capital planning before they start down a program [and] that cost is a requirement, “ Kendall said. “We can’t afford to pay whatever people want in terms of capabilities. We have to limit our reach to stay within our grasp.”

Looking at costs over a 30-year period, Kendall feels, will force those developing requirements to exercise design restraint when developing new systems.

“I think that will help us avoid a lot of cancellations,” he said. “We’ve had a lot of program cancelations where we discovered after we got into development or early production, that the product wasn’t affordable.”

DoD has spent billions of dollars over the past decade on programs that never entered production. The most recent example of this is the Marine Corps Expeditionary Fighting Vehicle, an amphibious assault craft.

“Program managers have a fundamental responsibility to understand their cost and to act to try to control their costs to drive them down,” Kendall said. “That’s a cultural change that’s going to take a little time, but that’s something fundamental of what I’m trying to accomplish.”

The new guidance also tackles tailoring and alternative models for how structuring programs.

“I’m trying to make a very big point that there’s not just one size or one way to set up a program,” Kendall said. “There are some basic things that you have to do in almost every program, but beyond that you have to look at the nature of the product and determine based on the nature of the product and factors like the operational urgency ... then lay out a program that makes sense for that product and those constraints that apply to that particular program.”

Much of the information in the new 5000.02 is already being used throughout DoD’s acquisition programs, however the new guidance formalized it.

“It’s a combination of a document that can be used by somebody who is new to this business to try to understand it more thoroughly,” Kendall said. “It’s also a document that somebody who is a serious, experienced professional can go back to as a reference to understand what the rules are that he’s going to have to follow and some of the fundamentals that he’s going to have to apply.”

Kendall’s revisions to 5000.02 have been implemented through an interim document, though he expects no major changes are expected in the finalized version. He is planning to get feedback on the changes during a program executive officer conference in January.

“All of this is a work in progress,” Kendall said. “I do expect that there will be changes in the future; there will be continuous improvement in this area as there is in other areas of acquisition.”

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