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
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
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
· 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
· 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.