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

Subtitle H - Provisions Relating to Software Acquisition

P. L. 115-

House Conference Report. 115-404

(a) Pilot Program.—

(1) IN GENERAL.—Not later than 30 days after the date of the enactment of this Act, the Secretary of Defense, in consultation with the Secretaries of the military departments and the chiefs of the armed forces, shall establish a pilot program to tailor and simplify software development requirements and methods for major software-intensive warfighting systems and defense business systems.

(2) IMPLEMENTATION PLAN FOR PILOT PROGRAM.—Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense, in consultation with the Secretaries of the military departments and the chiefs of the armed forces, shall develop a plan for implementing the pilot program required under this subsection, including guidance for implementing the program and for selecting systems for participation in the program.

(3) SELECTION OF SYSTEMS FOR PILOT PROGRAM.—

(A) The implementation plan shall require that systems be selected as follows:

(i) For major software-intensive warfighting systems, one system per armed force and one defense-wide system, including at least one major defense acquisition program or major automated information system.

(ii) For defense business systems, not fewer than two systems and not greater than eight systems.

(B) In selecting systems for participation, the Secretary shall prioritize systems as follows:

(i) For major software-intensive warfighting systems, systems that—

(I) have identified software development as a high risk;

(II) have experienced cost growth and schedule delay; and

(III) did not deliver any operational capability within the prior calendar year.

(ii) For defense business systems, systems that—

(I) have experienced cost growth and schedule delay;

(II) did not deliver any operational capability within the prior calendar year; and

(III) are underperforming other systems within a defense business system portfolio with similar user requirements.

(b) Realignment Plans.—

(1) IN GENERAL.—Not later than 60 days after selecting a system for the pilot program under subsection (a)(3), the Secretary shall develop a plan for realigning the system by breaking down the system into smaller increments using agile or iterative development methods. The realignment plan shall include a revised cost estimate that is lower than the cost estimate for the system that was current as of the date of the enactment of this Act.

(2) REALIGNMENT EXECUTION.—Each increment for a realigned system shall—

(A) be designed to deliver a meaningfully useful capability within the first 180 days following realignment;

(B) be designed to deliver subsequent meaningfully useful capabilities in time periods of less than 180 days;

(C) incorporate multidisciplinary teams focused on software production that prioritize user needs and control of total cost of ownership;

(D) be staffed with highly qualified technically trained staff and personnel with management and business process expertise in leadership positions to support requirements modification, acquisition strategy, and program decisionmaking;

(E) ensure that the acquisition strategy for the realigned system is broad enough to allow for proposals of a service, system, modified business practice, configuration of personnel, or combination thereof for implementing the strategy;

(F) include periodic engagement with the user community, as well as representation by the user community in program management and software production activity;

(G) ensure that the acquisition strategy for the realigned system favors outcomes-based requirements definition and capability as a service, including the establishment of technical evaluation criteria as outcomes to be used to negotiate service-level agreements with vendors; and

(H) consider options for termination of the relationship with any vendor unable or unwilling to offer terms that meet the requirements of this section.

(c) Removal Of Systems.—The Secretary may remove a system selected for the pilot program under subsection (a)(3) only after the Secretary submits to the Committees on Armed Services of the Senate and House of Representatives a written determination that indicates that the selected system has been unsuccessful in reducing cost or schedule growth, or is not meeting the overall needs of the pilot program.

(d) Education And Training In Agile Or Iterative Development Methods.—

(1) TRAINING REQUIREMENT.—The Secretary shall ensure that any personnel from the relevant organizations in each of the military departments and Defense Agencies participating in the pilot program, including organizations responsible for engineering, budgeting, contracting, test and evaluation, requirements validation, and certification and accreditation, receive targeted training in agile or iterative development methods, including the interim course required by section 891 of this Act.

(2) SUPPORT.—In carrying out the pilot program under subsection (a), the Secretary shall ensure that personnel participating in the program provide feedback to inform the development of education and training curricula as required by section 891.

(e) Sunset.—The pilot program required under subsection (a) shall terminate on September 30, 2023. Any system selected under subsection (a)(3) for the pilot program shall continue after that date through the execution of its realignment plan.

(f) Agile Or Iterative Development Defined.—In this section, the term “agile or iterative development”, with respect to software—

(1) means acquisition pursuant to a method for delivering multiple, rapid, incremental capabilities to the user for operational use, evaluation, and feedback not exclusively linked to any single, proprietary method or process; and

(2) involves—

(A) the incremental development and fielding of capabilities, commonly called “spirals”, “spins”, or “sprints”, which can be measured in a few weeks or months; and

(B) continuous participation and collaboration by users, testers, and requirements authorities.

The Senate amendment contained two provisions (secs. 883 and 884) that would establish two pilots that encourage the Department’s use of tailoring to realign several major warfighting programs and defense business systems.

The House bill contained no similar provision. The House recedes with an amendment that would combine the two provisions, extend associated timelines, modify the definition of agile development, and require staff involved in programs selected under the pilot to take training on agile methods.

The conferees note that the Department of Defense’s warfighting, business, and enterprise capabilities are increasingly reliant on or driven by software and information technology. The conferees note with concern that the Department is behind other federal agencies and industry in implementing best practices for acquisition of software and information technologies, to include agile and incremental development methods.

The conferees note that existing law and acquisition regulation provide significant flexibility to the Department and that the Department has explicitly provided for tailoring in its acquisition directives and instructions.

The conferees note with concern that the organizational culture and tradition of acquiring capabilities using a hardware-dominant approach impedes effective tailoring of acquisition approaches to incorporate agile and incremental development methods. Therefore, the conferees expect that in conducting the program selection and tailoring under this section, the Secretary:

(1) Use the tools, resources, and expertise of digital and innovation organizations resident in the Department, such as the Defense Innovation Board, the Defense Innovation Unit Experimental, the Defense Science Board, the Defense Digital Services, federally funded research and development centers, research laboratories, and other technical, management, and acquisition experts;

(2) Use the digital development and acquisition expertise of the General Services Administration’s Technology Transition Service, Office of 18F; and

(3) Leverage the science, technology, and innovation activities established pursuant to section 217 of the National Defense Authorization Act for Fiscal Year 2016 (Public Law 114– 92; 10 U.S.C. 2445a note).