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Under Secretary of Defense for Acquisition, Technology and Logistics

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1 Under Secretary of Defense for Acquisition, Technology and Logistics
10 U.S.C. Chapter 144A – Major Automated Information System (MAIS) Programs February 27, 2012 December 11, 2013 Under Secretary of Defense for Acquisition, Technology and Logistics DASD(C3&Cyber) Bob Ramsey

2 Outline 10 U.S.C. Chapter 144A establishes reporting regime
Enacted FY07 NDAA §816; amended FY09 NDAA §812, WSARA §101, FY10 NDAA §817 and §841, FY11 NDAA §805, FY12 NDAA §811 §2445a – definitions §2445b – requires annual and quarterly reports §2445c – Significant & Critical variance reporting §2445d – if MAIS program is MDAP magnitude SecDef decides 5-year development clock Critical Change process Resources

3 Key Requirements 10 U.S.C. Chapter 144A
Defines Major Automated Information System (MAIS) in statute Designates USD(AT&L) and Service Acquisition Executives as Senior Officials responsible for reporting regime Requires a MAIS Annual Report (MAR) to congressional defense committees (analogous to MDAP Selected Acquisition Report) MAR establishes the Original Estimate (baseline) Requires Program Managers to submit MAIS Quarterly Report (MQR) to the Senior Official any variance from the baseline Establishes Significant and Critical Change thresholds Imposes a reporting penalty if program exceeds 5 years from Milestone A (or selection of preferred alternative) to FDD Requires communication to Congress Significant Change → Notification letter Critical Change → Report w/ certifications based on program evaluation (almost identical to Nunn-McCurdy)

4 Definitions

5 MAIS Definition 10 U.S.C. 2445a Chapter 144A defines MAIS as a Department of Defense program for the acquisition of an automated information system (either as a product or a service) if— “(1) the program is designated by the Secretary of Defense, or a designee of the Secretary, as a major automated information system program; or “(2) the dollar value of the program is estimated to exceed— (A) $40,000,000 in fiscal year 2014 constant dollars for all program costs in a single fiscal year; (B) $165,000,000 in fiscal year 2014 constant dollars for all program acquisition costs for the entire program; or $520,000,000 in fiscal year 2014 constant dollars for the total life-cycle costs of the program (including operation and maintenance costs).” *italicized numbers are published in the Interim DoDI dated 26 Nov 2013

6 Amendment to MAIS Definition FY09 NDAA §812
Adds “Other Major Information Technology Investment Program” to MAIS definition (1) An investment that is designated by the Secretary of Defense, or a designee of the Secretary, as a ‘pre-MAIS’ program we try to avoid designating a program as “pre-MAIS” and rely instead on definition based on cost estimate (2) Any other investment in automated information system products or services that is expected to exceed a MAIS threshold, but is not considered to be a MAIS program because a formal acquisition decision has not yet been made “formal acquisition decision” = Milestone B This means “unbaselined MAIS”

7 MAIS of MDAP Magnitude 10 U.S.C. 2445d
FY10 NDAA §817 amendment makes MAIS programs and MDAP mutually exclusive If a MAIS program reportable under Chapter 144A is also an MDAP reportable under Chapter 144, SecDef may designate that program as either a MAIS or MDAP If program produces custom hardware → MDAP → Ch 144 If a program is software intensive → MAIS → Ch 144A MDAP definition thresholds Estimated RDT&E more than $480M (FY14 constant dollars) Estimated Proc more than $2.79B (FY14 constant dollars)

8 MAIS Program Increments
An “acquisition program” is used by the acquisition community to refer to the basic unit of management for an acquisition effort A MAIS “program” is usually composed of a number of increments A MAIS “program” is not baselined, only its increments have APBs Increment—the Increment is “a militarily useful and supportable operational capability that can be developed, produced, deployed, and sustained. Each Increment will have its own set of threshold and objective values set by the user.” (DODI , Encl.2, 2.c.) MAIS program = ∑ Inc 1 + Inc 2 + Inc n Regardless of cost, each increment of a MAIS program is managed and reported as if it is a MAIS program

9 MAIS Program Annual and Quarterly Reports

10 MAIS Annual Report (MAR) 10 U.S.C. 2445b
MAR submissions must start when funds are requested in the President’s Budget Due annually to Congress 45 days after submission of the President’s Budget (PB) The annual report must include the following Schedule including estimates of milestone dates, full deployment decision, and full deployment Estimates of total acquisition and total life-cycle costs Summary of key performance parameters The initial MAR constitutes the Original Estimate for determining Significant & Critical Changes in the program; Based on approved Acquisition Program Baseline (APB) by policy Original Estimate can only be changed if a Critical Change Report is sent to Congress An updated APB is not sufficient to change an Original Estimate

11 2014 MAR Preparation Events and Target Dates
Means Responsible Agency Target Date Train-the-Component Trainer Attend meeting OUSD(AT&L) & Components 18 Nov 13 Distribute updated MAR procedures OUSD(AT&L) 11 Dec 13 Release Draft MARs to OSD Lead DAMIR Components 10 Jan 14 Review Draft MARs; provide comments OSD staff 13-31 Jan 14 MAR issue resolution teleconferences; assign drafts back to PMO Telecon/DCO OSD & Components 3-7 Feb 14 Release Final MARs to OSD 28 Feb 14 Hold Final Release reviews 3 Mar 14 Coordinate MAR package within OSD SACCP 4-12 Mar 14 Staff MAR package to AT&L for signature Paper 13-15 Mar 14 Sign MAR Transmittal letters USD(AT&L) 19 Mar 14 Deliver MAR Transmittal letters to Congress; release DAMIR MARs Paper/DAMIR 24 Mar 14

12 MAIS Quarterly Report (MQR) 10 U.S.C. 2445c
Baselined MAIS programs submit a quarterly report (MQR) to the Senior Official MQR required even if no variance has occurred Also required for unbaselined MAIS programs ≥ 5 years past MS A / preferred alternative decision Unbaselined MAIS do not have Original Estimates; no c/s/p variances are possible If unbaselined, only Ch 144A breach possible is 5-year development clock needs no status reporting via MQR; can track status via ad hoc DAMIR report

13 MAIS Quarterly Report (MQR) 10 U.S.C. 2445c
MQR provides the PM’s Current Estimate For schedule, PM’s best estimate of dates For performance, PM’s best estimate of values For cost, PB ± fact of life changes Submitted on same (A, B, C) cycle as Defense Acquisition Executive Summary (DAES) MQR is not sent to Congress

14 Chapter 144A MAIS Reporting Automation
The APB, MAR, MAR Original Estimate, MQR, and DAES have been automated in DAMIR APB MAR OE MAR MQR DAES data DAMIR data data Working to combine MQR into DAES—Summer 2014

15 Reporting Variances

16 Senior Official 10 U.S.C. 2445c(b)
SAE: An AIS to be acquired for a military department USD(AT&L): AIS acquired by a Component other than military department USD(AT&L) delegated all his Senior Official responsibilities to: ASD(HA) DCMO CAEs (DISA, DLA, NSA) Note: the MDA is often NOT the Senior Official

17 Determinations 10 U.S.C. 2445c(c) and (d)
The Senior Official must review the Program Manager’s MQR and determine whether a Significant or Critical Change has occurred Significant Changes: notify congressional defense committees of the change within 45 days after the PM’s report is due Critical Changes: within 60 days after the PM’s report is due, the Senior Official must - Conduct an evaluation of the program, then Submit a report with certifications to the congressional defense committees Through the Secretary of Defense (USD(AT&L) transmittal ltr) The clock starts the date the MAIS Quarterly Report was due in the office of the Senior Official Last business day of every third month aligning with DAES Group

18 Significant and Critical Change Summary
Significant Critical Cost - total acquisition cost - total life-cycle cost 15 to 25% increase ≥ 25% increase Schedule > 6 months to <1 year delay ≥ 1 year delay Failed to achieve FDD within 5 yrs after MS A, or if no MS A, the date the preferred alternative was approved by the MDA Performance “Significant adverse change in expected performance” “Undermine the ability of the system to perform mission as originally intended” (i.e., did not meet a KPP threshold) Report to congressional defense committees Notification due 45 Days after MQR was due in the office of Senior Official Program Evaluation and Report due 60 days after MQR was due in the office of Senior Official

19 Significant Change Defined 10 U.S.C. 2445c(c)
Schedule: estimate a delay of more than six months but less than a year in any program schedule milestone or significant event from the Original Estimate Cost: estimate of total acquisition cost or total life-cycle cost for the program has increased by at least 15 percent, but less than 25 percent, over the Original Estimate Performance: a significant, adverse change in the expected performance of the major automated information system to be acquired

20 MAIS Significant Changes (as of December 11, 2013)
Program (in order received) Reason for variance Days to Prepare Notification SC Report Date DIMHRS (Navy) MS C and IOC slips due to requirements definition, Army interface delays, and data conversion complexity 81 20-Oct-08 GCCS-J (DISA) FDD schedule slip due to technical challenges and need for infrastructure upgrades 56   24-Apr-09 GFEBS (Army) Delayed FDD due to Army evaluation of OT report 43 13-Apr-10 KMI Inc 2 (NSA) Technical issues led to slip in OT&E 45 14-Jun-11 Navy ERP (Navy) Delayed FDD and IOT&E due to technical problems 35 5-Aug-11 GCSS-MC (Navy) FDD schedule slip to mature software 13-Feb-12 CANES (Navy) MS C schedule slip 36 6-Aug-12 GCSS-A (Army) FDD schedule slip 34 2-Nov-12 PKI Inc 2 (NSA) FDD schedule slip (later became Critical Change) 44 13-Sep-13 IPPS-A Inc 1 (Army) pending

21 Critical Change Defined 10 U.S.C. 2445c(d)
Schedule: estimate a delay of one year or more in any program schedule milestone or significant event from the Original Estimate Cost: estimate of total acquisition cost or total life-cycle cost for the program has increased by 25 percent or more over the Original Estimate Performance: a change in expected performance that will undermine the ability of the system to perform the functions anticipated in the Original Estimate DoD has defined a failure to achieve a Threshold Key Performance Parameter as a Critical Change Five-year to full deployment decision threshold: failed to achieve a full deployment decision within five years of MS A or if no MS A selection of preferred alternative Excluding any delay as a result of bid protest Only variance based on actual delay instead of PM’s estimate

22 MAIS Critical Changes (as of December 11, 2013)
Program (in order of date MQR received) Reason for Variance Days to Deliver CCR Report Date CAC2S (Marine Corps) Schedule slip due to architecture issues 237  24-Apr-09  GCSS-MC (Marine Corps) Cost & schedule slips caused by grand design 118 16-Jan-09 TMIP-J Inc 2 (TMA) Cost & schedule slips due to Wounded Warrior rqmts 175   24-Apr-09 DIMHRS (Navy) Schedule slips caused by requirements complexity  65  7-Apr-09 ISPAN Inc 1 (Air Force) Cost increase due Original Estimate cost admin error 69   10-Apr-09 TELEPORT Gen 1&2 (DISA) Schedule slip caused by delay in satellite launch 57 27-Mar-09 Navy ERP (Navy) Performance slip caused by deletion of KPP 89 28-Sep-09 MPS Inc IV (Air Force) Development issues delayed Milestone C 448 23-Dec-10 DEAMS Inc 1 (Air Force) Failure to meet 5-year development clock 122 29-Sep-10 GFEBS (Army) 58 28-Oct-10 ECSS (Air Force) 111 18-Feb-11 61 1-Sep-11 KMI Inc 2 (NSA) Cost, schedule & performance slips due to new rqmts 22-May-12 ECSS Inc 1 (Air Force) Failure to meet CCR schedule date terminated 7-Dec-12 VIPS (DLA) 13-Mar-13 AOC WS Inc 10.2 (Air Force) 285 12 Oct-13 GCSS-MC (Navy) Schedule slip due to technical challenges mtg reqmts 249 6-Sep-13 Teleport Gen 3 (DISA) Schedule slip due to dependency on delayed MUOS pending PKI Inc 2 (NSA)

23 Starting the 5-Year Development Clock 10 U.S.C. 2445c(d)(2)(A)
Clock starts at “… the Milestone A decision for the program or, if there was no Milestone A decision, the date when the preferred alternative is selected for the program (excluding any time during which program activity is delayed as a result of a bid protest).” Calculate delay in months and round-up to whole month Previously, clock started on a “funds first obligated” date FFO is an obsolete event, but we grandfather use of the date to start the clock And before that, clock started at Milestone A

24 Stopping the 5-Year Clock 10 U.S.C. 2445c(d)(2)(A)
“ … failed to achieve a full deployment decision within five years after ….” Statutory definition of ‘full deployment decision’ – “the final decision made by the Milestone Decision Authority authorizing an increment of the program to deploy software for operational use” The date the FDD ADM is signed by the MDA Interpretation of this definition and the FDD event is often complicated and depends on specific circumstances

25 Prohibition on Obligation of Funds 10 U.S.C. 2445c(g)
If the Senior Official does not submit the required report on Critical Changes within 60 days of MQR due date, appropriated funds may not be obligated for any major contract under the program For Chapter 144A purposes, the term "major contract" means any contract under the program that: Is not a firm-fixed price contract and, Has target cost exceeding $17M (FY00 constant dollars), or If no target cost exceeds $17M, is the largest contract under the program. recommend programs not obligate funds during Critical Change Report (CCR) preparation (would look bad as news headline) The prohibition ceases to apply on the date on which Congress receives a report in compliance with the law

26 Critical Change Process

27 Critical Change Program Evaluation 10 U.S.C. 2445c(e)
An assessment of— (1) the projected cost and schedule for completing the program if current requirements are not modified; (2) the projected cost and schedule for completing the program based on reasonable modification of such requirements; and (3) the rough order of magnitude of the cost and schedule for any reasonable alternative system or capability

28 Critical Change Report 10 U.S.C. 2445c(f)
Must include Senior Official’s written certification (with supporting explanation) that— (1) the automated information system to be acquired is essential to the national security or to the efficient management of the Department of Defense (2) there is no alternative to the system which will provide equal or greater capability at less cost (3) the new estimates of the costs, schedule, and performance parameters with respect to the program and system or information technology investment, as applicable, have been determined, with the concurrence of the Director of Cost Assessment and Program Evaluation, to be reasonable; and (4) the management structure for the program is adequate to manage and control program costs

29 D,CAPE Involvement 10 U.S.C. 2445c(f)(3)
Weapon Systems Acquisition Reform Act (WSARA) 2009 changed Chapter 144A certification requirement #3 to read: “(3) the new estimates of the costs, schedule, and performance parameters with respect to the program and system or information technology investment, as applicable, have been determined, with the concurrence of the Director of Cost Assessment and Program Evaluation, to be reasonable;” Summary of D,CAPE Involvement with Chapter 144A Critical Change Reports MDA ICE Required? Cost/Sch/Performance #3 Concurrence? USD(AT&L) Yes Anyone else No

30 Critical Change Team (CCT) Organization and Reporting Path
E3 “Reasonable Alternative” E2 “Reasonable Modification” E1 “Not Modified” IPT Principals Team Leader IPT C1 “Essential” IPT C2 “No Alternative” IPT C3 “New Estimate” IPT C4 “Management” Senior Official IPT Principals Lead USD(AT&L) or designee if needed for transmittal * Lead organization for ACAT IAM programs; Services have an equivalent Lead organization JS/J8* CAPE* AT&L*

31 Model Critical Change Process Timeline
Informal Notification to Senior Official Cannot Obligate Funds on Major Contracts Triage Meeting; draft Determination and Tasking Senior Official (SO) Identifies CCT Lead and IPT Principals Lead Kickoff Meeting of CCT Leadership; specify detailed timeline Official MQR submittal; SO issues Determination &Tasking 60 Days CCT Conducts Evaluation IPT Meetings Heading check w/ IPT Principals Compile Final Report Pre-Brief IPT Principals Lead Brief IPT Principals SO signs Report; sends to OSD OSD transmits Report to Congress

32 For Additional Chapter 144A Guidance
Everything you wanted to know about Ch 144A DAG MAIS Statutory Reporting https://dag.dau.mil/Pages/Default.aspx Chapter 144A Source and Reference documents are available at: https://acc.dau.mil/CommunityBrowser.aspx?id=227820&lang=en-US 10 U.S.C. Ch 144A (as amended) MAR Preparation Instructions Ch 144A Overview Briefing DAMIR-MAR User’s Guide Terms of Reference and Definitions DAMIR-MQR User’s Guide Section 811, FY07 NDAA on DBS POC Listing DAG (MSWord) OUSD(AT&L), DASD(C3 & Cyber) Bob Ramsey, ,


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