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IMMEDIATE RELEASE

Release No: 152-96
March 25, 1996

SECRETARY OF DEFENSE APPROVES MAJOR RESTRUCTURING OF DEFENSE ACQUISITION POLICY PROCEDURES

Secretary of Defense William Perry today announced his March 15, 1996 approval of an historic restructuring of defense acquisition policy and procedures. The new policy and procedures, which are contained in DoD Directive 5000.1 and DoD Regulation 5000.2-R, represent dramatic change in almost every major aspect of the way the Pentagon has traditionally done business: commercial practices and products are given special emphasis; cost is treated as an independent variable, rather than a byproduct of performance; program managers and other acquisition personnel are empowered to use their professional judgment; over 30 separate policy memos and report formats are canceled; and - in a move designed to implement the President's executive order to cut federal regulations- the new policy documents themselves are almost 90 percent shorter than the previous documents.

The new documents were jointly forwarded to Perry by Paul Kaminski, under secretary of Defense (Acquisition and Technology), Philip Coyle, director of Operational Test and Evaluation, and Emmett Paige, Jr., assistant secretary of Defense (Command, Control, Communications, and Intelligence). In their transmittal letter, they said that the new policies and procedures are the "key to institutionalizing fundamental change in the defense acquisition process. The issuance of the new DoD Directive 5000.1 and DoD 5000.2-R will be a visible symbol of the Department's acquisition reform efforts, which, rather than shackling employees with rigid rules and regulations, establishes a minimal set of mandatory policies and procedures and encourages members of the acquisition workforce to use their professional judgment to manage risk and tailor acquisition strategies."

Major accomplishments of the new policy and procedures documents include:

· Implementing Landmark Legislation. The new documents fully implement the Federal Acquisition Streamlining Act of 1994, the landmark legislation passed by Congress in October 1994. Implementing the Roles and Missions Commission. The new policies also implement the recommendations of the 1995 Commission on Roles and Missions. For example, the new documents now state a clear preference for contractor-provided logistics support and direct the collocation and consolidation of joint programs at the location of the lead Component's program office.

· Minimizing Mandatory Direction. The new policies explicitly recognize that since each acquisition program is different, tailored management approaches are a key element in successful program execution. To facilitate this approach, the new documents set forth only a minimal set of mandatory direction and encourage program managers to tailor acquisition strategies. Useful information that professionals should know and may incorporate into their strategies - but that is not mandatory - will be contained in the soon-to-be-released Defense Acquisition Deskbook, a computerized reference set for acquisition professionals.

· Policy Integration. The new policies consolidate and integrate acquisition policy and procedures for both weapon systems and automated information systems, rather than maintaining two separate sets of rules and regulations as the Department has historically done. This integration allows DoD to cancel several AIS policy documents.

· Decentralizing Policy Execution. While the new documents articulate a few guiding principles for all acquisition across the Department, mandatory procedures are set forth only for major programs. In this way, the Acquisition Executives of the Military Departments and Defense Agencies are empowered to manage the programs under their purview as they see fit, without a lot of second-guessing from higher headquarters.

· Institutionalization of New Ways of Doing Business. The new policies institutionalize Integrated Product Teams as a means of bringing representatives of all functional disciplines together as a team to build successful programs, identify and resolve issues, and make sound and timely recommendations to facilitate decision-making.

· Regulatory Streamlining. The new documents represent a significant reduction in regulatory volume; the previous version of the policy documents was over 1,000 pages long whereas the new version is only 160 pages long. This reduction helps the Department to implement President Clinton's Executive Order 12861 to reduce the volume of internal management regulations.

· Streamlining Paperwork. The policy documents mandate standard formats for only a handful of reports and authorize cancellation of the DoD 5000.2-M, a 300-plus page manual that established mandatory formats for numerous acquisition reports and fostered a "one-size-fits-all" approach to documentation. · Simplifying the Acquisition Decision Process. Among other things, the new policy eliminates the former Milestone IV decision point and states a preference for the Defense Acquisition Board to hold only one formal production review (either at the low rate or full rate point). The other production review will be delegated to the lead Service or Agency.

· Encouraging Innovation. The new policy encourages acquisition professionals to innovate through a variety of practices and techniques, including such non-traditional approaches as Advanced Concept Technology Demonstrations and rapid prototyping.

Secretary Perry pointed out that the Department employed some of the basic tenets of acquisition reform to produce the new policy. The documents, for example, were produced by an Integrated Product Team - the 5000 Working Group, which was co-led by the offices of Acquisition Reform and Acquisition Program Integration. Using the IPT approach, the working group was able to draft and coordinate the documents in only nine months, compared to the Department's historical two-year average. Moreover, the working group was able to resolve over 2,500 individual issues through the IPT process.

Copies of the new documents are available on the Internet's World Wide Web at the following site: http://www.acq.osd.mil/api/asm. Hard copies are available for the media at the Pentagon in Room 2E765.