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TITLE VIII--ACQUISITION POLICY, ACQUISITION MANAGEMENT, AND RELATED MATTERS

Subtitle A--Acquisition Policy and Management

P. L. 111-

Joint Explanatory Statement of the Committees on Armed Services of the U. S. Senate and House of Representatives on H. R. 6523

From H. R. 6523

SEC. 804. REVIEW OF ACQUISITION PROCESS FOR RAPID FIELDING OF CAPABILITIES IN RESPONSE TO URGENT OPERATIONAL NEEDS.

(a) Review of Rapid Acquisition Process Required-

(1) IN GENERAL- Not later than one year after the date of the enactment of this Act, the Secretary of Defense shall complete a review of the process for the fielding of capabilities in response to urgent operational needs and submit a report on the review to the congressional defense committees.

(2) REVIEW AND REPORT REQUIREMENTS- The review pursuant to this section shall include consideration of various improvements to the acquisition process for rapid fielding of capabilities in response to urgent operational needs. For each improvement, the report on the review shall discuss--

(A) the Department's review of the improvement;

(B) if the improvement is being implemented by the Department, a schedule for implementing the improvement; and

(C) if the improvement is not being implemented by the Department, an explanation of why the improvement is not being implemented.

(3) IMPROVEMENTS TO BE CONSIDERED- The improvements that shall be considered during the review are the following:

(A) Providing a streamlined, expedited, and tightly integrated iterative approach to--

(i) the identification and validation of urgent operational needs;

(ii) the analysis of alternatives and identification of preferred solutions;

(iii) the development and approval of appropriate requirements and acquisition documents;

(iv) the identification and minimization of development, integration, and manufacturing risks;

(v) the consideration of operation and sustainment costs;

(vi) the allocation of appropriate funding; and

(vii) the rapid production and delivery of required capabilities.

(B) Clearly defining the roles and responsibilities of the Office of the Secretary of Defense, the Joint Chiefs of Staff, the military departments, and other components of the Department of Defense for carrying out all phases of the process.

(C) Designating a senior official within the Office of the Secretary of Defense with primary responsibility for making recommendations to the Secretary on the use of the authority provided by subsections (c) and (d) of section 806 of the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (10 U.S.C. 2302 note), as amended by section 803 of this Act, in appropriate circumstances.

(D) Establishing a target date for the fielding of a capability pursuant to each validated urgent operational need.

(E) Implementing a system for--

(i) documenting key process milestones, such as funding, acquisition, fielding, and assessment decisions and actions; and

(ii) tracking the cost, schedule, and performance of acquisitions conducted pursuant to the process.

(F) Establishing a formal feedback mechanism for the commanders of the combatant commands to provide information to the Joint Chiefs of Staff and senior acquisition officials on how well fielded solutions are meeting urgent operational needs.

(G) Establishing a dedicated source of funding for the rapid fielding of capabilities in response to urgent operational needs.

(H) Issuing guidance to provide for the appropriate transition of capabilities acquired through rapid fielding into the traditional budget, requirements, and acquisition process for purposes of contracts for follow-on production, sustainment, and logistics support.

(I) Such other improvements as the Secretary considers appropriate.

(b) Discriminating Urgent Operational Needs From Traditional Requirements-

(1) EXPEDITED REVIEW PROCESS- Not later than 270 days after the date of the enactment of this Act, the Secretary shall develop and implement an expedited review process to determine whether capabilities proposed as urgent operational needs are appropriate for fielding through the process for the rapid fielding of capabilities or should be fielded through the traditional acquisition process.

(2) ELEMENTS- The review process developed and implemented pursuant to paragraph (1) shall--

(A) apply to the rapid fielding of capabilities in response to joint urgent operational need statements and to other urgent operational needs statements generated by the military departments and the combatant commands;

(B) identify officials responsible for making determinations described in paragraph (1);

(C) establish appropriate time periods for making such determinations;

(D) set forth standards and criteria for making such determinations based on considerations of urgency, risk, and life-cycle management;

(E) establish appropriate thresholds for the applicability of the review process, or of elements of the review process; and

(F) authorize appropriate officials to make exceptions from standards and criteria established under subparagraph (D) in exceptional circumstances.

(3) COVERED CAPABILITIES- The review process developed and implemented pursuant to paragraph (1) shall provide that, subject to such exceptions as the Secretary considers appropriate for purposes of this section, the acquisition process for rapid fielding of capabilities in response to urgent operational needs is appropriate only for capabilities that--

(A) can be fielded within a period of two to 24 months;

(B) do not require substantial development effort;

(C) are based on technologies that are proven and available; and

(D) can appropriately be acquired under fixed price contracts.

(4) INCLUSION IN REPORT- The Secretary shall include a description of the expedited review process implemented pursuant to paragraph (1) in the report required by subsection (a).

From S. 3454, National Defense Authorization Act for Fiscal Year 2011

SEC. 811. NEW ACQUISITION PROCESS FOR RAPID FIELDING OF CAPABILITIES IN RESPONSE TO URGENT OPERATIONAL NEEDS.

(a) New Acquisition Process Required-

(1) IN GENERAL- Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense shall develop and implement a new acquisition process to ensure the rapid fielding of capabilities in response to urgent operational needs.

(2) ELEMENTS- The acquisition process developed and implemented pursuant to this subsection shall, to the extent determined appropriate by the Secretary--

(A) be consistent with--

(i) the fifth recommendation of the July 2009 report of the Defense Science Board Task Force on Fulfillment of Urgent Operational Needs; and

(ii) the recommendations of the April 2010 report of the Government Accountability Office on DOD's Urgent Needs Processes;

(B) clearly define the roles and responsibilities of the Office of the Secretary of Defense, the Joint Chiefs of Staff, the military departments, and other components of the Department of Defense for carrying out all phases of the process;

(C) designate a senior official within the Office of the Secretary of Defense with primary responsibility for making recommendations to the Secretary on the use of the authority provided by subsections (c) and (d) of section 806 of the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (10 U.S.C. 2302), as added by section 811 of the Ronald Reagan National Defense Authorization Act for Fiscal Year 2005 (Public Law 108-375; 118 Stat. 2012), in appropriate circumstances;

(D) be designed to provide a streamlined, expedited, and tightly integrated approach to--

(i) the identification and validation of urgent operational needs;

(ii) the analysis of alternatives and identification of preferred solutions;

(iii) the development and approval of appropriate requirements and acquisition documents;

(iv) the identification and minimization of development, integration, and manufacturing risks;

(v) the consideration of operation and sustainment costs;

(vi) the allocation of appropriate funding; and

(vii) the rapid production and delivery of required capabilities;

(E) ensure that a target date is established for the fielding of a capability pursuant to each validated urgent operational need;

(F) include a system for--

(i) documenting key process milestones, such as funding, acquisition, fielding, and assessment decisions and actions; and

(ii) tracking the cost, schedule, and performance of acquisitions conducted pursuant to the process; and

(G) include an established, formal feedback mechanism for the commanders of the combatant commands to provide information to the Joint Chiefs of Staff and senior acquisition officials on how well fielded solutions are meeting urgent needs.

(b) Applicability of New Process-

(1) REVIEW OF APPLICABILITY OF NEEDS FOR FIELDING THROUGH PROCESS- Not later than 270 days after the date of the enactment of this Act, the Secretary shall develop and implement an expedited review process to determine whether capabilities proposed as urgent operational needs are appropriate for fielding through the acquisition process developed and implemented pursuant to subsection (a) or should be fielded through the traditional acquisition process.

(2) ELEMENTS- The review process developed and implemented pursuant to paragraph (1) shall--

(A) apply to the rapid fielding of capabilities in response to joint urgent operational need statements and to other urgent operational needs statements generated by the military departments and the combatant commands;

(B) identify officials responsible for making determinations described in paragraph (1);

(C) establish appropriate time periods for making such determinations;

(D) set forth standards and criteria for making such determinations based on considerations of urgency, risk, and life cycle management;

(E) establish appropriate thresholds for the applicability of the review process, or of elements of the review process; and

(F) authorize appropriate officials to make exceptions from standards established under this subsection in exceptional circumstances.

(3) COVERED CAPABILITIES- The review process developed and implemented pursuant to paragraph (1) shall provide that, subject to such exceptions as the Secretary considers appropriate for purposes of this section, the acquisition process developed and implemented pursuant to subsection (a) is appropriate only for capabilities that--

(A) can be fielded within a period of 2 to 24 months;

(B) do not require substantial development effort;

(C) are based on technologies that are proven and available; and

(D) can be acquired under fixed price contracts.

(c) Review of Organization and Funding for Urgent Operational Needs-

(1) REVIEW- The Secretary shall review the organization and funding of the Department of Defense for the rapid fielding of capabilities in response to urgent operational needs in order to develop such recommendations on the enhancement of such organization and funding as the Secretary consider appropriate.

(2) RECOMMENDATIONS- The recommendations developed by the Secretary under paragraph (1) shall include, at a minimum, recommendations on the advisability of establishing a dedicated source of funding, and a new agency, dedicated to the rapid fielding of capabilities in response to urgent operational needs, as recommended by the Defense Science Board Task Force on Fulfillment of Urgent Operational Needs.

(d) Testing Requirements-

(1) PROCESS FOR DEMONSTRATION OF PERFORMANCE- The acquisition process developed and implemented pursuant to this section shall include a process for demonstrating performance of capabilities in a manner that is consistent with the requirements of section 806(b)(2) of the Bob Stump National Defense Authorization Act for Fiscal Year 2003 (10 U.S.C. 2302 note), the principles established in the July 2007 report to Congress pursuant to section 231 of the John Warner National Defense Authorization Act for Fiscal Year 2007 (Public Law 109-364; 120 Stat. 2131), and the need for rapid fielding of capabilities in response to urgent operational needs.

(2) DEVELOPMENT OF OPERATION AND DEVELOPMENTAL TESTING REQUIREMENTS- To the maximum extent practicable and consistent with the need for rapid fielding, operational and developmental testing requirements for capabilities covered by the acquisition process shall be developed in coordination with the Director of Operational Test and Evaluation and the Director of Developmental Test and Evaluation.

(e) Follow-on Production, Sustainment, and Logistics Support- Not later than 270 days after the date of the enactment of this Act, the Secretary shall issue guidance to provide for the appropriate transition of capabilities fielded through the acquisition process developed and implemented pursuant to this section into the traditional budget, requirements, and acquisition process for purposes of contracts for follow-on production, sustainment, and logistics support.

(f) Reports to Congress-

(1) INITIAL REPORT- Not later than one year after the date of the enactment of this Act, the Secretary shall submit to the Committees on Armed Services of the Senate and the House of Representatives a report on the implementation of the requirements of this section. Such report shall include, at a minimum, the following:

(A) A description of the acquisition process developed and implemented pursuant to subsection (a).

(B) A description of the expedited review process developed and implemented pursuant to subsection (b).

(C) The results of the review conducted pursuant to subsection (c), including the recommendations described in that subsection.

(D) A description of the testing process established pursuant to subsection (d).

(E) A description of the transition guidance issued pursuant to subsection (e).

(F) Such recommendations for such legislative action as the Secretary considers appropriate to enhance the utility of the expedited acquisition process required by this section.

(G) Such other matters relating to the implementation of the requirements of this section as the Secretary considers appropriate, including such other recommendations as the Secretary considers appropriate.

(2) ANNUAL REPORTS- Not later than 30 days after the end of fiscal year 2011, and 30 days after the end of each subsequent fiscal year through fiscal year 2016, the Secretary shall submit to the congressional defense committees a report on the rapid fielding of capabilities under the acquisition process developed and implemented pursuant to this section. Each such report shall include, at a minimum, the following:

(A) The number and dollar value of acquisitions conducted pursuant to the acquisition process during the previous fiscal year.

(B) An assessment of the successes and failures of acquisitions conducted pursuant to the acquisition process during the previous fiscal year.

(C) An identification of each acquisition conducted pursuant to the acquisition process during the previous fiscal year in which a capability was not fielded by the target date established under this section, the reasons for the failure to field such capability by the target date, and the plans of the Department for fielding such capability.

(D) A description of any plans of the Department to improve or enhance the acquisition process.

The Senate committee-reported bill contained a provision (sec. 811) that would require the Secretary of Defense to develop a new acquisition process for rapid fielding of capabilities in response to urgent operational needs.

The House bill contained no similar provision.

The agreement includes the Senate provision with an amendment that would require the Secretary to revise and update existing processes for the rapid fielding of capabilities in response to urgent operational needs.

From S. Rpt. 111-201, to accompany S. 3454, NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2011

New acquisition process for rapid fielding of capabilities in response to urgent operational needs (sec. 811)

The committee recommends a provision that would require the Secretary of Defense to develop and implement a new acquisition process to ensure the rapid fielding of capabilities in response to urgent operational needs, in accordance with certain recommendations of the July 2009 report of the Defense Science Board Task Force on Fulfillment of Urgent Operational Needs and the April 2010 report of the Government Accountability Office (GAO). The Secretary would also be required to develop and implement an expedited review process to determine whether capabilities proposed as urgent operational needs are appropriate for fielding through the rapid acquisition process or should be fielded through the traditional acquisition process. As a general rule, the rapid acquisition process would be available only for capabilities that can be fielded within a period of 2 to 24 months, do not require a substantial development effort, are based on technologies that are proven and available, and can be acquired under fixed price contracts.

The acquisition process and the review process required by this section would apply to the full range of processes used by the Department of Defense to identify urgent operational needs, including both joint urgent operational need statements and comparable documents generated by the military departments and the combatant commands. The committee expects the guidance issued pursuant to this section to rationalize the relationship between joint processes and service-specific processes for responding to such needs. In general, the committee understands that service-specific processes are intended to address narrower and more discrete requirements that should require minimal development. In the view of the committee, a fielding requirement of 180 days or less would be appropriate for such requirements.

In some cases, it appears that the military services have stretched the boundaries of rapid acquisition authorities to undertake large and complex acquisition programs that would be more suitable to the traditional acquisition process. For example, the Marine Corps and the Air Force Special Operations Command have used rapid acquisition authority to modify KC-130Js and AC-130s for use in theater, while the Army sought to use other transactions authority to field Long Endurance Multi-Intelligence Vehicles, and the Navy and Air Force have proposed leasing commercially-available, propeller-driven aircraft and fundamentally modifying them for military use. In view of the high development risk associated with some of these programs and the fact that a number of them appear to be redundant or duplicative of existing programs, the committee concludes that the Department needs stronger guidance on the proper application of rapid acquisition processes.

In April 2010, GAO reported significant shortcomings in existing Department of Defense (DOD) processes for meeting urgent operational needs. According to GAO:

`DOD's guidance for its urgent needs processes is dispersed and outdated. Further, DOD guidance does not clearly define roles and responsibilities for implementing, monitoring, and evaluating all phases of those processes or incorporate all of the expedited acquisition authorities available to acquire joint urgent need solutions. Data systems for the processes lack comprehensive, reliable data for tracking overall results and do not have standards for collecting and managing data. In addition, the joint process does not include a formal method for feedback to inform joint leadership on the performance of solutions. . . . In the absence of a management framework for its urgent needs processes, DOD lacks tools to fully assess how well its processes work, manage their performance, ensure efficient use of resources, and make decisions regarding the long term sustainment of fielded capabilities.'

The committee urges the Department to address these shortcomings in its rapid acquisition processes as quickly as possible.