Lunch n Learn: 25 APR 2018Please Tailor Your Acquisition Strategy!

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Agenda

Date: April 25, 2018

Email Address: brian.schultz@dau.mil

joseph.Gueck@dau.mil

Please Tailor

Your

Acquisition Strategy!

Moderator:

LtCol Joe Gueck

Presenter:

Brian Schultz

3

Agenda

• Background

• How do we Tailor?

‾ Start with Priorities

‾ Prerequisite tasks

‾ Critical Thinking

‾ Industry Perspective

• How Can I Get Help?

• Summary

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Who Said All These Things?

• PM must be delegated near complete control of his program in all

aspects….

• Strong but small project offices must be provided both by the military

and industry

• A very simple drawing and drawing release system with great flexibility

for making changes must be provided

• A minimum number of reports required, but important work must be

recorded thoroughly

• There must be mutual trust between the military project organization

and the contractor, and there must be very close cooperation and

liaison on a day-to-day basis

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Kelly Johnson, Lockheed Skunkworks (February 27, 1910 – December 21, 1990)

He also said the following:

• Never do business with the Navy!

• No reports longer than 20 pages or

meetings with more than 15 people

• If it looks ugly, it will fly the same

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Tailoring is not new but needs continued emphasis

Background

• Acquisition Strategy often regarded as most important task for

DoD PMs!

‾ Lays the foundation for everything that follows

‾ Defines the business, technical, and support strategies to meet

program objectives

• PMs should consider and propose tailoring of information, work

efforts, and decision reviews if it results in more cost effective

approach in the acquisition strategy

• Words tailor and tailoring appear 48 times in DoDI 5000.02!

• No single cookbook solution for tailoring – requires critical

thinking

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• Comprehensive, integrated plan that identifies the acquisition

approach, and describes the business, technical, and support

strategies to manage risks and meet program objectives

– Defines the relationship between the acquisition phases and work efforts,

and key program events

– Provides PM’s understanding of the business environment, technical

alternatives, costs and risks/opportunities in the market, and the plan to

support successful delivery of the capability at an affordable life-cycle price

on a realistic schedule

– Business approach, including contracting strategy

– Plan for realizing and maximizing competition from inception through

sustainment

What is an Acquisition Strategy?

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Key Acquisition Strategy Content Areas

• Market Research

• Framing Assumptions

• Risk and Opportunity Assessment

• Program Structure and Tailoring

• Technical Strategy

• International Considerations

• Intellectual Property Strategy

• Industrial Base and Industry Analysis (including suppliers)

• Affordability, Funding, and Should Cost

• Supportability Considerations

• Source Selection Planning

• Business Strategy, including competition, contract types and Incentives

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Tailoring, Waiving, and Avoiding Requirements

• Tailoring - Proposing alternate means of achieving the same results

consistent with meeting statutory, programmatic/ joint requirements

- “Tailoring is always appropriate when it will produce a more efficient and

effective acquisition approach for the specific product” (DoDI 5000.02)

• Waiving – Proposing the elimination of specific requirements that

apply but don’t add value

– Acquisition Strategy can be used to request a regulatory waiver.

• Avoiding – Requirement does not apply (be sure to document rationale)

Authorities:

– Regulatory requirements can be tailored/ waived with the consent of the

MDA and/or other designated officials.

– Statutory requirements can only be waived by act of law but some

statutes also provide waiver language.

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Why is Tailoring Difficult?

• Limited knowledge and practical application of workforce

• How do we do it?

• Resistance from functional staffs who protect their functional

“turf”

• Must haves versus nice to haves versus not needed

versus negative value

• Easy to follow checklist mentality

• Requires critical thinking to assess opportunities, risks,

benefits, alternatives, and plan of action

• Risk-averse culture worries that we might break something

or fail

Imperatives to Consider

• Rapid and agile, deliver lethality at speed of relevance

• Pace of new commercial technology

• Near-Peer and Asymmetric threats

• Risk taking ahead of risk averse

– Manage risks versus avoid risks

• Innovate

– Explore new possibilities and approaches

– Investigate rapid contracting mechanisms

• Partnering with Allies

• Budget discipline and affordability

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• Rapid Prototyping and Experimentation:‾ Surface Navy Laser Weapon System (RPED)

‾ MRAP - Pre-Rapid Acq and Fielding Decision of 2008

• Rapid Acquisition:‾ MQ-25A - Unmanned Carrier Launched Air Vehicle (MACO)

‾ LDUUV - Large Diameter Unmanned Undersea Vehicle (MACO)

‾ Offensive Anti-Surface Ship Warfare (OASuW) Increment 1 (LRASM)

‾ SM-6 Variant of Standard Missile for OTH ASuW and Ground Tgts (SCO)

‾ USAF LRSB B-21 established in Air Force RCO

• Rapid Fielding:‾ PEO Soldier RFI Initiative

• Rapid Acquisition and Fielding:‾ MRAP – Once decision on Requirement was made

• Acquisition Tailoring of DODI 5000.2:

‾ Next-Gen Jammer (replacement for ASPJ)

Rapid Program Examples

Acquisition Strategies Can Involve Combinations Of Above

Tailoring Success Factors

• Leadership Support

• Organizational Buy-in*

• OSD and Component Support

• Robust Planning*

• Critical Thinking Skills*

• Credible rationale that documents benefits*

14Source: Tailoring the Acquisition process in the U.S. Department of Defense, Rand, 2015

*Within PM control

Tailoring Risks

• Assess value of tasks and documents and manage

risks associated with waivers, tailoring, and

streamlined approaches

– F-35 streamlined acquisition approach with concurrent

development and production suffered great cost growth

– Some programs have suffered cost growth due to lack of

robust systems engineering (technical strategy)

– Lack of thorough analysis and testing can add risk

– Compressing schedule without assessing risks of completing

event-driven tasks

– Lack of data to make informed decisions

– Not meeting stakeholder expectations

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Consider New Methods like Agile DevOps

Prioritized

Capability

BacklogRelease cadence every 1-2 weeks Push to ops

“Slices” of capability in production every 1-2 wks

Most important thing

Next most important

• No end-state – software is

perpetual

• No “cost of delay”

• Experimentation vs.

Estimation

• Capacity throttled by user

demand - LOE

• Users and developers

jointly make decision to

stop adding value; “Bends

Cost Curve”

Useable

Useful

Joyful

Feasible………

Working in small batches; one process owner

Cumulative Program Risk High

Medium

Low

Risk only assumed in 1-2 week chunks

Metrics/Management Levers

• VALUE to user

• Throughput (Release

cadence and backlog

velocity)

• Capacity (# of software

development teams needed

to keep parity with user and

tech-debt-driven prioritized

backlog)

• Quality (change fail rate)

VA

LU

E to

use

r

Perpetual Enhancement in Operations Versus ‘Requirements to System Delivery’ 15

Start with Program Priorities

• Determine priorities that will drive their strategy

– Starting point should be upfront analysis to assess the relative

importance of cost versus schedule versus performance

– Tradeoffs associated with priorities

• Relative importance of program factors can drive other strategy

considerations, including risks, opportunities, scope of work,

constraints and even contract type

• Analysis of priorities should involve acquisition leadership, user,

and test communities to ensure a common understanding and

alignment of stakeholder expectations

Food for thought: What implications and tradeoffs might be

associated with conduct of an accelerated acquisition program? 17

Cost Drivers (Most to Least) KPPs Current Estimate

Understand Cost Drivers & Cost Curve

CTEs TRL Map to KPPS Schedule Drivers

KPP 1: $$ RDT&E, PROC, O&S

KPP 5: $$ RDT&E, PROC, O&S

KPP 3: $$ RDT&E, PROC, O&S

KPP 2: $$ RDT&E, PROC, O&S

KPP 4: $$ RDT&E, PROC, O&S

Threshold ObjectiveTrade-Space

KPP 1

KPP 2

KPP 3

KPP 4

KPP 5

CTEs TRL KPP

A 5 3

B 6 2

C 4 1

D 5 5

E 6 4

$

Performance

Knee in the curveKPP 1

KPP 3

KPP 5

KPP 4

KPP 2

Knee in the Curve

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Conduct Prerequisite Tasks

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• Adopt a critical thinking method to help design your way forward

– Several pre-requisite tasks should be conducted before tailoring (e.g.,

market research, framing assumptions, risk and opportunity analysis,

industrial base analysis, technical strategy)

– Analyze required tasks and documents and tailor approach based on what

is adding value: Seek approval to tailor in acquisition strategy

– Analyze and discuss requirements with user and test communities and

determine priorities, cost drivers, trade-space, and phasing

-- Perform and/or review operational analysis using the CONOPS and

OMS/OMP

‒ Determine alternatives to reduce cycle time and pursue those that appear

credible

‒ Identify and assess use of non-developmental and commercial items

‒ Leverage capabilities from other programs

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Employ Critical Thinking

• What methods are used in your program? Are they effective?

• Thinking Frameworks - How we approach thinking– Argumentative Thinking

– Parallel Thinking

• Many Thinking Tools Available Such as: – SWOT Analysis

(Strengths, Weaknesses,

Opportunities, & Threats)

– Theory of Constraints

– Force Field Analysis

– Z Model

– Six Thinking Hats

“Thinking is the

hardest work

there is, which is

probably the

reason why so

few engage in it.”

- Henry Ford

Critical Thinking Standards

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1. Purpose or goal

2. Identify question at

issue

3. Gather Information

4. Interpret and infer

5. Conceptualize findings

Acquisition Strategy Requires Critical Thinking

Critical thinking requires

exploring alternatives,

questioning

assumptions and

identifying likely

consequences6.

Create/Question

assumptions

7. Understand

implications

and

consequence

s

8. Create

your point

of view

Ref: Foundation for Critical Thinking

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Build a Strategy Thought Map

Thought Map - Representation of the thinking process a products of thinking

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Consider the Industry Perspective

• Financial situation and motivations

– Financial ability to absorb overruns and invest

– Profit only one of several motivators

• Strategic alignment

– Program fit with company strategic vision and priorities

• Leverage

– Relative bargaining power of each party

• Suppliers and outsourced content

– Significant work and risk may be at lower tier

– Acquisition Strategy and RFP should consider

use of appropriate tools to manage risks

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Incentives Link DoD and Industry Goals

Industry Motivations,Incentives &

Rewards

Right IncentivesShould Tie Both

Together

Incentives Drive Motivation; Motivations Drive Performance (Good and Bad)

Company Seeks Return On Investment

DoD Seeks Capability Promised

Company Strategy

Internal Research and Development (IR&D)

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Financial Reporting Metrics

Program Strategy and Mission

Investment in DoDPriorities

Credible Cost, Schedule, Performance Execution

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• How can we better understand the company (or companies)

we are working with?

• How can we assess the strategic alignment of our program

with industry? What can we do about it?

• How do we determine leverage points and how can we use

this information to get a win-win on our program? What are

our leverage points versus industry?

• How can we influence company behavior and actions?

• How will outsourcing and potential supplier issues affect our

strategy

• What are the industrial base risks to our program?

• What input should industry have when we develop our

acquisition strategy?

Sample Industry Questions to Consider

Affordability & Cycle Time Considerations

Other Key Drivers- International- Operational Urgency

- Supportability

Market & Industrial Considerations

Synchronizing Acquisition Strategy Elements Requires Iterative and Integrating Effort!

Technology/Technical

Strategy Drivers

Notional Flow*

Business Strategy- Competition- Contract Type- Incentives

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4

5

*Repeat Flow and Feedback Loops to Enable Cohesive Thinking

Requirements

Inputs

Adjust the flow and feedback loops basedOn unique program circumstances

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Iterate and Integrate the Strategy

How Can I Get Help?

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• Tailorable Workshop designed to support initial weapons

system acquisition strategy (MS A) to include updates

and/or strategies required in support of other decisions

and RFP releases

‒ Apply critical thinking tools to develop program-specific

strategies that emphasize streamlined approaches

‒ Targeted to PM and key functional staff

‒ Robust upfront planning to mitigate risk and assess

programmatic opportunities

Mission Need Solution

Acquisition Strategy Development Workshop

Approach Value Proposition/Feedback

• Builds a strong program foundation by providing tools,

methods, and proven practices to help teams avoid common

inception and execution issues

‒ “It was tremendously helpful and helped shape a path forward

for our program”

‒ “Very helpful in breaking down components of the acquisition

strategy into manageable parts”

‒ “One of the very best tools the DAU has for educating the

workforce in the tools available to make for a successful

program”

Emphasis

on critical

thinking

Typical Workshop Schedule

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Monday FridayThursdayWednesdayTuesdayTopic 00

Intro

Lunch

Topic 01

Critical

Thinking

Lunch

Topic 03

Framing

Assumptions

Topic 04

Risk and Opp

Management

Topic 05

Technical

Strategy

Lunch

Topic 06

Intellectual

Property

Strategy

Topic 07

Phasing and

Tailoring

Topic 08

Industrial Base

& Industry

Topic 09

International

Considerations

Topic 10

Business

Strategy

Lunch

Topic 10

Business Strategy

(Cont)

Topic 11

Source Selection

Planning

Topic 12

Affordability &

Budget, and

12a Should Cost

Topic 13

Supportability

Strategy

Topic 14Strategy Integration

and De-brief

Wrap-Up

Topic 02

Market

Research

Topic 01

Critical

Thinking

(cont)

Briefing

Development

Topic 15High Performing Teams

Other Resources

• Mission Assistance Workshops (highly tailorable)

– Critical Thinking

– Understanding Industry

– Risk Management

– Team Effectiveness

– Managing Stakeholders

– Systems Engineering and Test

• Deep dive consulting efforts and peer reviews

• Local acquisition experts

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Summary

• No single approach to tailoring your

Acquisition Strategy but making informed

decisions requires significant upfront effort ‾ Start with priorities

‾ Use critical thinking method(s)

‾ Conduct prerequisite tasks

‾ Consider industry perspective

‾ Iterate and integrate the strategy

• Strategy should be tailored to support DoD

imperatives for speed, agility, and lethality

• Help is available through DAU and others‾ Let us know if we can assist or if you can

share your ideas and practices on tailoring

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• Brian Schultz (presenter): brian.schultz@dau.mil

– 703-805-5214

• LtCol Joe Gueck (moderator): joseph.gueck@dau.mil ‾

703-805-3387

Contact Information

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