GSA Expo 2009

Overview of Major Acquisition Management

Bruce W. Moler

US Department of Homeland Security

What’s So Special AboutMajor Acquisitions ?

Bruce MolerPM, Acquisition WorkforceDHS – OCPObruce.moler@dhs.gov202-447-5340

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Big “A” Acquisition (AKA “program acquisition”) encompasses everything a program must accomplish, from requirements analysis, planning, technology development, systems engineering, budgeting, procurement, logistics support, testing, system safety, and maintenance--through production, deployment and planning for disposal.

Think “cradle

to grave”

Think “procurement”

Little “a” acquisition (AKA “stand-alone acquisition”) is, basically, buying stuff. Little “a” may require an Acquisition Plan (subject to thresholds), but don’t confuse Little “a” with Big “A.”

Buying stuff that

already “exists”

Buying stuff that

doesn’t exist - yet

DHS Acquisition Directive 102-01 reflects “Big A” acquisition

Big “A” and Little “a” Acquisition

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What is a Major Acquisition?

“It depends on who you ask”

As defined in OMB Circular A–11, Part 7: “Major acquisitions are capital assets that require special management attention because of their importance to the agency mission; high development, operating, or maintenance costs; high risk; high return; or their significant role in the administration of agency programs, finances, property, or other resources. Major acquisitions should be separately identified in the agency's budget.

Capital assets are land, (including parklands), structures, equipment (including motor and aircraft fleets), and intellectual property (including software) which are used by the Federal Government and have an estimated useful life of two years or more; and an acquisition cost of $5M or more….”

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What is a Major Acquisition?

FAR Part 2 - Definitions

“Major system” means that combination of elements that will function together to produce the capabilities required to fulfill a mission need. The elements may include hardware, equipment, software, or any combination thereof, but exclude construction or other improvements to real property. A system is a major system if— (1) The Department of Defense is responsible for the system and the total expenditures for research, development, test, and evaluation for the system are estimated to be more than $173.5 million or the eventual total expenditure for the acquisition exceeds $814.5 million; (2) A civilian agency is responsible for the system and total expenditures for the system are estimated to exceed $1.8 million or the dollar threshold for a “major system” established by the agency pursuant to Office of Management and Budget Circular A-109, entitled “Major System Acquisitions,” whichever is greater; or (3) The system is designated a “major system” by the head of the agency responsible for the system (10 U.S.C. 2302 and 41 U.S.C. 403).

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What is a Major Acquisition?

DHS AcquisitionDirective 102-01

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ACAT 1D:• DAB or DSAB review• Designated by USD(AT&L)• Decision by USD(AT&L)• Component review• Designated by USD(AT&L)• Decision by Component Head/CAE

• ITAB review• Designated by USD(AT&L) or ASD(NII)*• Decision by USD(AT&L) or designee*

• Component review• Designated by USD(AT&L) or ASD(NII)*• Decision made by Component Head/CAE

• Does not meet ACAT I Criteria• Designated by Component Head/CAE• Decision by CAE or as designed by CAE

$378M Life Cycle Cost or$126M Total Prog. Cost or

$32M Prog. Cost in any single year

(FY2000 Constant $)

$365M RDT&E or$2.19B Procurement(FY2000 Constant $)

ACAT II:

ACAT IAC:

ACAT IAM:

ACAT IC:

$140M RDT&E or$660M Procurement(FY2000 Constant $)

ACAT III:• Does not meet ACAT I, IA or II Criteria• Designated IAW Component policy• Decision at lowest appropriate Level

Major AISAcq Programs

(MAIS)

No FiscalCriteria

ACAT IV:• Not otherwise designated ACAT I, IA, II or III• Designated IAW SECNAV policy• Decision at lowest appropriate level SECNAVINST 5000.2

(Navy and Marine Corps)

Major DefenseAcq Programs

(MDAP)

Major Systems

all other programs(except for

Navy & USMC)

NavyUSMC

*ASD(NII) when delegated by USD(AT&L)

What is a Major Acquisition?DoDI 5000.2

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What is a Major Acquisition?

Common Themes

Cost

Level of Interest/Decision Review

Mission Criticality

Risk

“Other” as Determined by the Agency

If Congress Says So……..

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MDAMDA

PEOPEO

PMPM

USD(AT&L) Defense Acquisition Executive

ComponentAcquisition Executive

(Asst Secretary or Equivalent)

Program Executive Officer(General Officer/SES Civilian)

Program Manager(Col/LtCol/Civilian Equivalent)

ASD(NII)DoD Chief Information Officer

Note: some PM’s do not report through a PEO

Or, if delegated for ACAT IAM -

CAECAE

Who Plays in Major Acquisitions?

ProgramManager

Component Acquisition Executive

AcquisitionProgram

ManagementDivision (APMD)

AcquisitionDecision

Authority (ADA)

ChiefAcquisition

Officer

Under Secretaryfor Management

Deputy Secretary

DoDDHS

Level 1

Levels 1 & 2

Levels 2 & 3

(or the HCA)

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Who Plays in Major Acquisitions?

Decision Makers

End User

Project/Program Managers

Contracting Officers

Business; Finance Specialists

Logisticians

Systems Engineers

Cost Estimators and Analysts

Test and Evaluation

Information Technology Specialists

Private Industry

Congress

Tax Payers

Foreign Allies

Other Stakeholders

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• Cost growth• Schedule delays• High risk technology• Software issues• Supportability issues• Unclear/evolving requirements• Acquisition strategy• Test and evaluation highlights/operational

effectiveness/suitability• Co-development concerns• Manpower and training

Typical Issues at Milestones/Key Decision Points

A Successful Major Acquisition?

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Planning, Programming,

Budgeting, Execution

Calendar Driven

Requirements Process – High Level

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Prepare MNS/ORD & Build

Budget Requirements

Executive Review

Prepare Briefing Materials for EGB

Yes

KEY

Decision Review

Process

In Process Review

PROGRAM Initiation

Make Final Decision on Level 3s & 4s. Forwards

Level 1 & 2s.

NoMission Area Analysis

Connection to Budget / FYHSP Process

RequirementsNeed Driven

AcquisitionEvent Driven

A Successful Major Acquisition?

Decision Loops inFederal Acquisition

Acquisition Life Cycle

Contracting

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A Successful Major Acquisition?

Stay close to your customerClear; agreed upon requirementsLeverage the synergy of people working in teamsManage the “Big Three”: Acquisition; Budget; RequirementsManage Risk: Cost, Schedule; PerformanceManage InnovationUse mature technologyBe an expert in the “Golden Rule”Pay special attention to software and IT requirementsDon’t forget logistics; environmental; producibility; disposalPrudent documentation managementGet the cost right – up frontManage your stakeholders; continually communicateUse performance based management approach/metricsFoster competition in the marketplaceLead your people

“ People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf. “ George Orwell