Acquisition Policy & International Trends

Overview Defense Acquisition Basics International Acquisition Policies Sales, Cooperation, and Defense Trade Trends Program Trends

DoD Decision Support Systems “Little A” Acquisition 10/26/06 “Big A” Acquisition Joint Capabilities Integration and Development System (JCIDS) REQUIREMENTS Planning, Programming, Budgeting and Execution (PPBE) Defense Acquisition System MONEY MATERIAL “Little A” Acquisition Lesson 02 SE Requirements Planning

JCIDS – The Basics JCIDS Joint Capabilities Integration and Development System Guidance for Future Joint Warfighting Capabilities Strategic Guidance Joint Operations Concepts CONOPS Defense Planning Scenarios Feedback from the field Fielded Capabilities Non-Materiel Solutions Requirements Managers JCIDS Assess current capabilities Identify gaps Recommend non-materiel and/or materiel approaches Identify operational performance requirements Recommended Materiel Approaches Determine materiel solution Estimate cost and obtain funding Design, develop, and test Produce and field Resources Acquisition PPBE Congress

Defense Acquisition System The Materiel Development Decision precedes entry into any phase of the acquisition management system Entrance and Exit Criteria for each phase Model 1: Hardware Intensive Program IOC A B C Materiel Solution Analysis Engineering & Manufacturing Development Technology Maturation & Risk Reduction. LRIP Sustainment Operations & Support FRP Decision Materiel Development Decision DRFPRD CDD-V ICD Draft CDD CDD CPD Production & Deployment FOC PDR CDR Disposal Now we will use the structure show here to briefly go thru each decision point and phase to point out key activities. Initial Capabilities Document (ICD) DRAFT CDD Capability Development Document (CDD) Capability Production Document (CPD) RELATIONSHIP TO JCIDS PDR: Preliminary Design Review CDR: Critical Design Review CDD-V: CDD Validation LRIP: Low Rate Initial Production FRP: Full Rate Production DRFPRD: Development Request For Proposals Release Decision IOC: Initial Operational Capability FOC: Full Operational Capability

International Acquisition Policies

Preferred Order for Solutions JCIDS Guidance Non-Materiel Solutions Materiel Solutions DOTMLPF-P JCIDS Only Procurement or Modification Additional Production or Modification JCIDS and Defense Acquisition System Cooperative Development Program New DoD Joint Program New DoD Component Program

JCIDS Manual (New in 2015 version) JCIDS Provisions “For capability requirements documents advocating creation of international acquisition programs with allies/partner nations, Sponsors will consider to the greatest extent possible, foreign disclosure review and document structuring to facilitate releasability, in whole or in part, to the nations concerned.” “Other system attributes may include …… physical and operational security needs, including technology security, foreign disclosure, defense exportability features, and anti-tamper.” JCIDS Manual (New in 2015 version)

DoDI 5000.02 (Enclosure 2, paragraph 7.a.) New Acquisition Strategy “[Program Management [PM] is responsible for integrating [IA&E] considerations into the program’s Acquisition Strategy at each major milestone or decision point. [PM] will consider the potential demand and likelihood of cooperative development or production, Direct Commercial Sales, or Foreign Military Sales early in the acquisition planning process; and consider U.S. export control laws, regulations, and DoD policy for international transfers when formulating and implementing the acquisition strategy … Where appropriate, [PMs] will pursue cooperative opportunities and international involvement throughout the acquisition life cycle to enhance international cooperation and improve interoperability ...” DoDI 5000.02 (Enclosure 2, paragraph 7.a.) New

Cooperative Opportunities 10 USC 2350(a) requires Cooperative Opportunities Document before 1st milestone or decision point Statutory Cooperative Opportunities requirement is addresses in DoDI 5000.02 Due at first program milestone review Documented in Acquisition Strategy or equivalent document Required for MDAP, MAIS, ACAT II & III Approved by Milestone Decision Authority (MDA) DoDI 5000.02, Table 2 (Milestone and Phase Information Requirements), Page 47

DoDI 5000.02 (Enclosure 3, paragraph 13) New Program Protection “Program protection also supports international partnership building and cooperative opportunities objectives by enabling the export of capabilities without compromising underlying U.S. technology advantages.” Program managers will describe in their PPP the program’s critical program information and mission-critical functions and components … [including] planning for exportability and potential foreign involvement. Countermeasures should include anti-tamper, exportability features, security … and other mitigations …” DoDI 5000.02 (Enclosure 3, paragraph 13) New

Sales, Cooperation, and Defense Trade Trends

Adapting to a Changing Environment

FMS and Service Procurement: 5 Year Average, FY10-14 The Scale of FMS FMS and Service Procurement: 5 Year Average, FY10-14 #1. $45.1 Billion Navy (incl. USMC) #2. $39.0 Billion FMS #3 $38.8 Billion Air Force #4 $32.4 Billion Army Benefits to the U.S. Builds U.S.-partner relationships Interoperability Lowers unit costs for the U.S. DoD Maintain production lines Dollars into the U.S. economy Jobs 14

Agreement R&D Contributions ($ in Millions) 88 IAs New Slide IA = International Agreement

Top 10 Arms Exporters & Importers (2001-2012) Exporters USA $86437 Russia $74574 Germany $22540 France $20829 UK $12435 China $9955 Netherlands $6625 Italy $6507 Israel $5997 Spain $5768 Importers India $28776 China $27875 South Korea $13896 UAE $11914 Pakistan $10430 Australia $10365 Greece $10286 USA $9095 Turkey $7962 Singapore $7426 Source: Stockholm International Peace Research Institute (SIPRI) Arms Transfer Database (US$1990 millions)

Share of International Arms Exports (%) 2009-2013 Top 3 Customers USA 29 Australia, South Korea, UAE Russia 27 India, China, Algeria Germany 7 USA, Greece, Italy China 6 Pakistan, Bangladesh, Myanmar France 5 China, Morocco, Singapore UK 4 Saudi Arabia, U.S., India Spain 3 Norway, Austria, Venezuela Ukraine China, Pakistan, Russia Italy India, UAE, USA Israel 2 India, Turkey, Columbia Source: SIPRI Arms Transfer Database

Defense Companies - 2013 (World-Wide excluding China) Rank Company Arms Sales, 2012, ($M) Defense Sales % of Total Sales 1 Lockheed Martin (USA) 35,490 78 2 Boeing (USA) 30,700 35 3 BAE Systems (UK) 26,820 94 4 Raytheon (USA) 21,950 93 5 Northrop Grumman (USA) 20,200 82 6 General Dynamics (USA) 18,660 60 7 EADS (trans-European)* 15,740 20 8 United Technologies (USA) 10,560 19 9 Finmeccanica (Italy) 12,530 50 10 Thales (France) 10,370 55 www.sipri.org * EADS was renamed Airbus Group in January 2014

International Acquisition Program Trends

Foreign Military Sales (FMS) Program Trends Foreign Military Sales (FMS) Sale of DoD Configuration with Exportability Modifications Integration of Buyer Furnished Equipment (BFE) Development and Integration of New Equipment Direct Commercial Sales (DCS) Sale of DoD Configuration with Exportability Modifications DCS/FMS Hybrid Programs Sale of New or Highly Modified Systems International Cooperative Programs (ICPs) Cooperative Development of New Systems Incorporating Foreign Participation in DoD Program Cooperation Throughout Programs’ Life-Cycles Past Present

Joint Strike Fighter (JSF) Program Description Foreign Military Sales DoD requirement to replace the F-16, F-18, and AV-8B UK MoD joins as partner and accepts DoD’s STOVL capability requirement Other partner nations follow Current FMS customers: Israel, Japan, Korea Future FMS customers: TBD Coordination of ICP and FMS customer investment in follow-on development anticipated International Cooperative Program Combined Activities Concept Demo MOUs (several) EMD MOU (U.S. and 8 partners) Production, Sustainment, and Follow-On Development (PSFD) MOU (U.S. and 8 partners) PSFD MOU cost shares based on projected JSF air system buys (known as Composite Share Ratio) OT&E (selected partners) Training Various “Training Pooling” Implementing Arrangements Sustainment (Logistics) Coordinated depot Investment Automated Logistics Information System (ALIS)

Foreign Military Sales International Cooperative Program RC-135V/W Rivet Joint Program Description Foreign Military Sales UK retires Nimrod R1; wants to retain SIGINT capability UK decides to “buy into” U.S. RJ program USAF provides three KC-135Rs as EDA FMS Case UK-D-SAO KC-135s converted to RC-135s Ground support equipment, spares, and training International Cooperative Program Combined Operations Sustainment & Follow-on Development (SFD) MOU Common logistics support Cooperative follow-on development Cost shares based on fleet size (17 U.S./3 UK) Co-Manning MOU USAF to train UK cadre under FMS Cooperative Operations MOU Framework for cooperative operations

Saudi Arabia F-15SA Program Description Program Structure $30B development, production, test, modification/conversion, and sustainment program Largest single FMS case in history PEO: AFLCMC/CC – PEO-FB Security Asst PM (SAPM) (WR) D-SAPM Production (WP) D-SAPM Conversion (WR) D-SAPM Sustainment (WR) D-SAPM Training (AFSAT) Scope New Development Production: 84 F-15SA new aircraft Conversion: 70 F-15S to SA’s Sustainment: Construction/ modification at multiple bases/ training ranges/centers Training: 5500 RSAF for English language & specialty training Digital Electronic Warfare System Missile Warning System Fly-by-Wire flight controls Reconnaissance pod (DB-110) Color flat panel displays New precision weapons integration

P-8 Maritime Patrol Aircraft Program Description DCS and FMS Navy establishes a requirement to replace the P-3 Full cooperative program with Australia, Germany, and Italy attempted w/o success Australia decides on combination of P-8 and Navy MQ-4C Triton Current DCS Customer: India Current FMS Customers: None Future FMS Customers: TBD (but likely) International Cooperative Program Combined Activities MOU w/Australia late in EMD Production, Sustainment, and Follow-On Development (PSFD) MOU w/Australia PSFD MOU cost shares based on projected U.S. and Australia P-8 buys Sustainment (logistics) AUS will be treated as “13th Squadron” by Navy Follow-on development requirements definition Australia Cooperative Program Personnel part of Navy process

IA&E Policy Discussion International Cooperative Programs (ICPs) Consider partnership opportunities throughout life-cycle Allied and Coalition Partner Interoperability Establish JCIDS attributes for equipment interoperability Program Protection Planning Consider TSFD and exportability throughout life-cycle Acquisition Strategy Integrate IA&E considerations at each milestone/decision point What’s driving these policies? Are they appropriate? Are they achievable?

Handouts

Capability Requirement and Acquisition Processes Initial Capabilities Document* Materiel Solution Analysis Phase Draft Capability Development Document Requirements Authority Review of AoA Results Technology Maturation & Risk Reduction Phase A Decision Dev. RFP Release Point B Engineering & Manufacturing Development Phase Production Legend = Decision Point = Milestone Decision = Requirements Document = Requirements Authority Reviews C Production & Deployment Phase Operations & Support Phase Disposal * Or equivalent Approved/Validated Requirements Document

JCIDS Documents Initial Capabilities Document (ICD) Summarizes the Capability-Based Assessment Justifies requirement for materiel/non-materiel solutions Supports MDD for materiel solutions Guides MSA phase activities Capability Development Document (CDD) Outlines an affordable increment of militarily useful, logistically supportable, technologically mature capability Draft CDD supports Milestone A “risk reduction” decision Matured during TMRR and validated at requirements decision point prior to Milestone B Capability Production Document (CPD) Addresses production elements specific to a single increment of an acquisition program Defines an increment that is ready for a production decision Guides the production and final testing of the system demonstrated during EMD

Defense Acquisition System The Materiel Development Decision precedes entry into any phase of the acquisition management system Entrance and Exit Criteria for each phase Model 1: Hardware Intensive Program IOC A B C Materiel Solution Analysis Engineering & Manufacturing Development Technology Maturation & Risk Reduction. LRIP Sustainment Operations & Support FRP Decision Materiel Development Decision DRFPRD CDD-V ICD Draft CDD CDD CPD Production & Deployment FOC PDR CDR Disposal Now we will use the structure show here to briefly go thru each decision point and phase to point out key activities. Initial Capabilities Document (ICD) DRAFT CDD Capability Development Document (CDD) Capability Production Document (CPD) RELATIONSHIP TO JCIDS PDR: Preliminary Design Review CDR: Critical Design Review CDD-V: CDD Validation LRIP: Low Rate Initial Production FRP: Full Rate Production DRFPRD: Development Request For Proposals Release Decision IOC: Initial Operational Capability FOC: Full Operational Capability

Materiel Solution Analysis PURPOSE: to conduct the analysis and other activities needed to choose the concept for the product that will be acquired Materiel Solution Analysis Materiel Development Decision ICD Draft CDD ENTER: Approved ICD, study guidance for conducting the AoA, and an approved AoA plan. AoA study guidance for MDAPs and AoA plan approval will be provided by CAPE. ACTIVITIES: Establish PM & PMO, conduct AoA, user writes draft CDD, develop initial: Acquisition Strategy Test & Evaluation Master Plan (TEMP) Systems Engineering Plan (SEP) Life Cycle Sustainment Plan (LCSP) Cyber Security Strategy Program Protection Plan (PPP) GUIDED BY: ICD and AoA Plan EXIT: Completed the necessary analysis and activities to support a decision to proceed to the next decision point and desired phase in the acquisition process. Point out requirements to enter and leave (exit) each phase -Note the activities, and importance of JCIDS documents (ICD) to guide each phase. -The enter and exit bullets on these charts are “generic” to all programs. Read about program specific “exit criteria” in the DAG. Materiel Solution Analysis: The purpose of this phase is different from Concept Refinement (CR). The AoA during CR was conducted to “refine” the materiel solutions prioritized in the ICD. The ICD no longer does this, so the AoA is now focused on alternative solutions provided from a number of sources: “a diversified range of large and small businesses”. Revisions to JCIDS: Because portions of the 5000.02, like the MSA phase, take into account upcoming changes to JCIDS, these changes should be pointed out. -The Functional Solutions Analysis (FSA) part of the Capabilities-Based Assessment (CBA) has been eliminated. -ICD will no longer contain a prioritized list of potential materiel alternatives. The ICD will define non-materiel options, DOTMLPF and policy changes that may lead to a Joint DCR. If non-materiel approaches are not sufficient to mitigate the war fighting capability gap, and a materiel solution is required, the ICD will make a recommendation on the type of materiel solution preferred: IT system, evolution of existing systems with significant capability improvement, or a transformational approach for “breakout” systems that differ significantly in form, function, operation and capabilities from existing systems and offer significant improvement over current capabilities or transform how the mission is accomplished. -These materiel options will be investigated during the MSA phase during the AoA. Concurrent with the AoA, a draft CDD (see draft CJCSI 3170.01G) will be prepared to guide the TMRR phase activities.

Technology Maturation and Risk Reduction B PURPOSE: to reduce technology, engineering, integration, and life cycle cost risk to the point that a decision to contract for EMD can be made with confidence in successful program execution for development, production, and sustainment Final RFP Regarded by the USD (AT&L) as the most important decision in the program’s lifecycle Technology Maturation & Risk Reduction DRFPRD Final RFP CDD-V Draft CDD CDD PDR ENTER: MDA approved materiel solution and Acquisition Strategy, initial major program documentation and funding in the FYDP ACTIVITIES: Competitive prototyping of critical subsystems, SE trade-off analysis, develop contracting strategy, conduct CDD Validation, conduct Preliminary Design Review (PDR), conduct Development RFP Release Decision, begin source selection for EMD GUIDED BY: Acquisition Strategy and draft CDD/approved CDD EXIT: Demonstration that technology, engineering, integration, manufacturing, sustainment, and cost risks have been adequately mitigated to support a commitment to design for production, Validated capability requirements, full funding in the FYDP, and compliance with affordability goals for production and sustainment

Engineering and Manufacturing Development B C PURPOSE: to develop, build, and test a product to verify that all operational and derived requirements have been met and to support production or deployment decisions Engineering & Manufacturing Development CPD PDR? CDR ENTER: Adequate risk reduction; approved requirements; full funding in FYDP ACTIVITIES: Complete detailed design, system-level CDR, integrated testing, establish product baseline, demonstrate manufacturing processes and supportability GUIDED BY: CDD, Acquisition Strategy, SEP, and TEMP COMPLETION: (1) the design is stable; (2) the system meets validated capability requirements demonstrated by developmental and initial operational testing as required in the TEMP; (3) manufacturing processes have been effectively demonstrated and are under control; (4) industrial production capabilities are reasonably available; and (5) the system has met or exceeds all directed EMD Phase exit criteria and Milestone C entrance criteria

Production and Deployment IOC PURPOSE: to produce and deliver requirements-compliant products to receiving military organizations C LRIP Production & Deployment CPD FRP Decision FOC Full Rate Production ENTER: Acceptable performance in DT & Operational Assessments (OA); mature software; no significant manufacturing risks; approved CPD; acceptable interoperability and operational supportability; demonstration of affordability; fully funded ACTIVITIES: Low Rate Initial Production, IOT&E, LFT&E (if required) and interoperability testing of production-representative articles; Full-Rate Production Decision; fielding and support of fielded systems; IOC/FOC GUIDED BY: CPD, TEMP, SEP, LCSP EXIT: Full operational capability; deployment complete Essentially same as the 2003 DoDI 5000.02. Guided By: DoDI 5000.02 indicates what documents “guide” the phase activities for MSA, TD and EMD; however, it does not state what documents guide Production and Deployment. So, shown here some obvious documents that guide the activities.

Operations and Support PURPOSE: Execute a support program that meets materiel readiness and operational support performance requirements, and sustains the system in the most cost-effective manner over its total life cycle Sustainment Operations & Support Disposal FOC ENTER: Approved CPD; approved LCSP; successful FRP Decision ACTIVITIES: LCSP implementation; Performance-Based Life-Cycle Product Support (PBL) planning, development, implementation, and management; initiate system modifications as necessary; continuing reviews of sustainment strategies, demilitarize and dispose of systems IAW legal and regulatory requirements, particularly environmental considerations and explosives safety GUIDED BY: CPD/Acquisition Strategy/LCSP Performance-Based Life-Cycle Product Support (PBL), has the same meaning as Performance-Based Logistics (PBL) and uses the same acronym. Guided By: DoDI 5000.02 indicates what documents “guide” the phase activities for MSA, TD and EMD; however, it does not state what documents guide Operations and Support. So, shown here are some obvious documents that guide the activities.