1. Contracting in a Changing Environment
Leslie Deneault
Defense Acquisition University

2. Why don’t acquisition programs stay the same?
Requirement change
Threat changes
New missions
New users for the system
Technology improvements
Parts obsolescence
Congressional influence
Funding cuts
Sometimes these changes effect a specific contract and sometimes these changes effect our entire acquisition strategy and planning and what the user ultimately needs to satisfy their requirements in a changing environment.

3. Ideas about a Changing Environment
Partnering relationship
Increases trust and understanding
Contract Terms and Conditions
The contract allows for change
Evolutionary Acquisition
Strategy allows for change
Partnering increases trust between the parties and increases the understanding of the requirement being contracted for and what work will be done. I believe that inevitably it will help control changes.
Evolutionary acknowleges that the technical environment is changing and that the user may change its mind. It builds in the concept of short blocks of available technology to meet a current user need.

4. Partnering Alpha negotiations Alternative Disputes Resolution
Senior Leadership Meetings
Alpha – a few slides in a minute
ADR- Gov’t and Ktr agree that they will stay out of the courts at all cost. They will try to resolve disagreements at the lowest level using arbitrators and mediators
Sr Leadership mtgs. The big guys meet on a regular basis. Forces the big issues to rise and forces the small issues to get resolved.

5. Who are the partners? Buying Activity DCMA (ACO…) DCAA (Auditor)
Contractor
Subcontractors
User

6. ALPHA Process Modification
Requirement
ECP
Technical
&Cost
Understanding
CCB
Model
Modification
Distribution
Contractor and
Government
Sign
Rev iews
Contractor
offer/TINA
TINA requirements are still in place. We work together on the model modification to the contract, but the contractor must still submit certified cost and pricing data and a proposal
Sole Source
Contractor
and
Government
Government

7. Important Elements of the Process
MOA – Everyone agrees to play
Team Continuity
Standard Software & Formats
Communications – No back-room discussions
Schedule
Approval Guidelines
Engineers can meet and agree without contracting
Team Meetings
MOA: Ktrs have to play and they don’t always want to if they have complete competitive advantage. DCAA can support
Team continuity: Over time the same players will be working
Software: Doesn’t work very well if you do not have standard cost models to work out cost and pricing. Want to be able to work on the model contract at the same time
Communications: Ideas are bubbled up in front of each other. If you have to confer seperately all the time, then you are not doing alpha
Schedule: Up front agreement. Big commitment of time. Everyone should agree to the schedule.

8. Contract Terms and Conditions that help change
Swing Clauses
Contract type relates to risk
MOA for partnering
Agreed process for using the changes clause
Broad performance objectives
Set up study CLINs

9. Evolutionary Acquisition
Evolutionary acquisition is DoD’s preferred strategy for rapid acquisition of mature technology for the user. An evolutionary approach delivers capability in increments, recognizing, up front, the need for future capability improvements. The success of the strategy depends on the consistent and continuous definition of requirements and the maturation of technologies that lead to disciplined development and production of systems that provide increasing capability towards a materiel concept.
Willing to take a current technology and not meet all requirements. Short increments of deliverable The difference between evolutionary acquisition and P3I is that in evolutionary acquisition, requirements are vague, in P3I they are not
5000.2; 12 May 2003

10. Incremental Development
Incremental Development (ID) definition
In this process, a desired capability is identified, an end-state requirement is known, and that requirement is met over time by development of several increments, each dependent on available mature technology.
5000.2, 12 May 2003

11. Spiral Development Spiral Development (SD) definition
In this process, a desired capability is identified, but the end-state requirements are not known at program initiation. Those requirements are refined through demonstration and risk management; there is continuous user feedback; and each increment provides the user the best possible capability. The requirements for future increments depend on feedback from users and technology maturation.
5000.2; 12 May 2003

12. Evolutionary Acquisition versus Linear-Sequential Acquisition
Linear-Sequential Acquisition Process
Requirements
Design
Code & Unit Test
Integrate & Deploy
Support
Evolutionary Acquisition Process
Requirements development, experimentation, risk reduction, market analysis, etc.
This graphic shows the key differences between the linear-sequential acquisition process and the evolutionary acquisition process.
Note the ongoing requirements development, experimentation, risk reduction, market analysis effort. This will tend to drive substantial increases in system engineering/program management effort per delivered source instruction as compared to historical factors. This is driven by the need to control multiple simultaneous baselines, while continually eliciting/validating User requirements, and supporting the fielded capability
As a result, you will likely observe substantial decreases in specific productivity (e.g., delivered source instructions per unit time) due to development of non-deliverable software.
Finally, note the early initiation of support activities relative to the linear-sequential process.
Design
Design
Design
Incr 1
Incr 2
Incr 3
Code & Unit Test
Code & Unit Test
Code & Unit Test
Integrate & Deploy
Integrate & Deploy
Integrate & Deploy
Support

13. Advantages of Spiral Development
Spiral development is designed to be more responsive to user needs. It accomodates change
Shorten turn around time for emergent user needs
Focus on the most critical user needs at the current time
Address threat changes, technology improvements, new users of the system, parts obsolescence, new missions, congressional influence
Continuous feedback between testers, users and developers (Gov’t and Ktr).
Overtime we will relook at the requirement, and threat , new mission, new technologies. We will change what we are building

14. Evolutionary and Contracting
Be part of the preparing the Acquisition Strategy/Plan
Use Award Fee or performance incentives to motivate contractor
Schedule may be most important consideration
Broad scope to contracts to minimize ECP’s and J&A’s or new contracts.
Minimal thresholds. Broad performance objectives
Options
Section H clauses that develop scope
Contracts are CR, FFP, and ID/IQ.
FAR Modular Contracting (18 months/IDIQ)
IAW with 39: agencies should to the mximum extent praticable use modular contracting to aquire major system of information technology