The Acquisition Strategy is a comprehensive plan that identifies and describes the acquisition approach that Program Management will follow to manage program risks and meet program objectives. The Acquisition Strategy guides program execution across the entire program life cycle and is updated at every major milestone and review. An approved strategy is reviewed and approved by the Milestone Decision Authority (MDA) at Milestone A and the Development RFP Decision Point. The acquisition strategy is then updated for MDA approval at Milestone B, Milestone C, and Full-Rate Production Decision (FRPD) review. [2]

Definition: The acquisition strategy is a comprehensive, integrated plan developed as part of acquisition planning activities. It describes the business, technical, and support strategies to manage program risks and meet program objectives. The strategy guides acquisition program execution across the entire program (or system) life cycle. It defines the relationship between the acquisition phases and work efforts, and key program events such as decision points, reviews, contract awards, test activities, production lot/delivery quantities, and operational deployment objectives. The strategy evolves over time and should continuously reflect the current status and desired endpoint of the program. [1]

Purpose of the Acquisition Strategy

The purpose of the acquisition strategy is to document the development approach of a program throughout its lifecycle to help guide the Program Manager and project stakeholders in their decision-making.

Acquisition Strategy Main Elements [1]

1. Business Approach: Address the main contracting approach, including contract types; how the competition will be sought, promoted, and sustained; source selection procedures, provisions, and sources; product support considerations; and leasing arrangements.
2. Contracting Strategy: Explain and, to the extent necessary, provide the analysis and rationale for the contracting strategy. Justify the use of fixed-price or cost-plus vehicles. Explain why the incentives provided were chosen and why there is confidence that they will successfully motivate the contractor to provide the performance desired by the government.
3. Major Contract(s): Identify the number and type of contracts, deliverable items, options, exit criteria, and contracting plan (competitive versus sole source and future down-select options), along with any other considerations.
4. Incentives: For each major contract, describe the contract incentives in detail. State how contract incentives are going to be employed to achieve required cost, schedule, and performance outcomes. If more than one incentive is planned for a contract, the Technology Development Strategy (TDS) and Acquisition Strategy should explain how the incentives complement each other and do not interfere with one another.
5. Technical Data Management: The strategy for Acquisition Category (ACAT) I and II programs shall assess the long-term technical data needs for the system and reflect that assessment in both the TDS and the acquisition strategy.
6. Sustainment / Product Support: The acquisition strategy should provide an overview of the sustainment-related contract(s) and performance-based agreements, with government and industry providers describing how the integrated product support package will be acquired for the system being supported. The discussion should include the contract/agreement and length, along with major terms and conditions; performance measures being used, and the portion of the system covered with the associated sustainment-related functions, plus hardware and data covered in each contract/agreement.

Requirements that Must be Addressed in the Acquisition Strategy include:

• Benefit Analysis and Needs Determination
• Consideration of Technology Issues
• Contracting Strategies
  • Contract-Type Determination
  • Termination Liability Estimate
• Cooperative Opportunities
• General Equipment Validation
• Industrial Base Capabilities Consideration
• Intellectual Property (IP) Strategy
• Market Research
• SBIR / STTR

The Acquisition Strategy Should also Address:

• Provide sufficient detail to allow decision-makers and the Milestone Decision Authority (MDA) to assess whether the strategy makes good business sense, effectively implements laws and policies, and reflects management‘s priorities
• Provide a detailed plan for the successful completion of the EMB phase and Operations and Support (O&S) Phase
• Cover development, testing, production, and life-cycle support. It should establish the requirements for each phase, and identify the critical management events.
• Describe the Critical Program Information (CPI)
• Describe the Contract Strategy of the program.
• Describe the knowledge and products needed from Test & Evaluation (T&E), and their timing to inform acquisition decisions and milestones across the life cycle
• Define approach for Small businesses, including Small Disadvantaged Businesses, Women-Owned Small Business, Veteran-Owned Small Business, Service-Disabled Small Business, and Historically Underutilized Business Zones.
• Define the relationship between the acquisition phases and work efforts, and key program events such as decision points, reviews, contract awards, test activities, production lot/delivery quantities, and operational deployment objectives.
• Include a Top-Level Integrated Schedule and a summary of highlights from the Integrated Master Plan (IMP) and Integrated Master Schedule (IMS)
• Defines the approach the program will use to achieve full capability: either Evolutionary or single-step
• Be complete enough to fully describe the planning considerations and decisions needed to balance cost, schedule, and life-cycle performance
• Describe the treatment of interoperability requirements
• Summarize how Human System Integration (HSI) requirements will be integrated within the systems engineering, logistics, technology development, and resource management processes, including a summary of the HSI risks and supporting mitigation plans
• Describe the processes planned to protect the overall effort/program from threats, including adversaries, industrial espionage and threats to personal information, and unfair competition
• Summarize the Risk Management Process
• Address the Technology Development Strategy (TDS)
• Include results of industrial base capability (public and private) analysis to design, develop, produce, support, and, if appropriate, restart an acquisition program
• Highlight the strategy for assessing industrial and manufacturing readiness.
• Include a summary of the Programmatic Environment, Safety, and Occupational Health Evaluation (PESHE)
• Describe signature support requirements and required funding to support program-related efforts.
• Evaluate Modular Open System Approaches (MOSA)

Acquisition Strategy Development

The Acquisition strategy should be developed before an organization undertakes any projects. The development of the acquisition approach that Program Management will follow to manage program risks and meet program objectives requires that the key project personnel understand the work to be performed and the relationships among the various parts of that work. Acquisition Strategy development requires contributions from leadership, program management, engineering personnel, technical experts, cost estimators, schedulers, and many other areas that impact a project outcome.

Acquisition Strategy Table of Content (Notional)

1. Purpose and Program Description
2. Capability Need
3. Acquisition Approach
4. Tailoring
5. Program Schedule
6. Risk Areas and Design Considerations
7. Business Strategy
8. Cost and Funding
9. Resource Management
10. International Involvement
11. Industrial Capability and Manufacturing Readiness
12. Life-Cycle Signature Support
13. Military Equipment Valuation
14. Test Strategy
15. Identification of Participants in Acquisition Plan Preparation

Product Support and Supportability Planning in the Acquisition Strategy

The Program Manager, with the support of the PS manager (PSM), will include Product Support (PS) and supportability planning, tests, evaluations, and quality reviews in the acquisition strategy and the integrated master plan/schedule. The acquisition strategy is the basis of contract data requirement lists and should consider providing for planning for incremental quality reviews of vendor/original equipment manufacturer deliverables. The acquisition strategy and the PSS should include the transition plan from interim contractor support to organic, contractor logistics support, or a combination of both. Based on the results of the product support business case analysis (PS BCA), the acquisition strategy should clearly document sustainment and O&S cost risk management, and the cost to reduce risk, thereby providing cost transparency and traceability throughout the life cycle. [3]

Business Approach in the Acquisition Strategy

The business approach detailed in the acquisition strategy should be designed to manage the risks associated with the product being acquired. It should fairly allocate risk between industry and the government. The approach will be based on a thorough understanding of the risks associated with the product being acquired (including security, FOCI, supply chain risks to acquisition, and industrial base concerns) and the steps that should be taken to reduce and manage that risk. The business approach should be based on market analysis that considers market capabilities and limitations. [3]

The contract type and incentive structure should be tailored to the program and designed to motivate the industry to perform in a manner that rewards the achievement of the government’s goals. The incentives in any contract strategy should be significant enough to clearly promote desired contractor behavior and outcomes that the government values while also being realistically attainable. When the risk is sufficiently reduced, PMs will consider the use of fixed-price contracts when the use of such contracts is cost-effective. [3]

Competition in the Acquisition Strategy

The acquisition strategy will address how program management will create and sustain a competitive environment from program inception through sustainment. Program management should use competition at various levels to create competitive environments that encourage improved performance and cost control. Decisions made in the early phases of the acquisition process can either improve or reduce program management’s ability to maintain a competitive environment throughout the program life cycle. [3]

Strategies to be considered include competitive prototyping, dual sourcing, and a modular open systems approach that enables competition for upgrades, acquisition of complete technical data packages, and competition at the subsystem level. This also includes providing opportunities for small businesses and organizations employing those with disabilities. [3]

Service Acquisition Strategy

The services acquisition strategy describes the plan to achieve the goals set in the services acquisition. The services acquisition strategy document is called an Acquisition Plan when the total cost of contracts for the acquisition program is estimated to be equal to or greater than the threshold described in Subpart 207.103(d)(i)(B) of the DFARS. The services acquisition strategy contains sufficient detail to allow senior leadership and the S-CAT decision authority to assess whether the strategy makes good business sense, effectively implements laws and policies, and reflects management’s priorities, including affordability. [1]

Modular Open Systems Approach (MOSA) in the Acquisition Strategy

Acquisition Strategies must be designed and developed with a Modular Open Systems Approach (MOSA) to the maximum extent practicable Pursuant to Section 2446a of Title 10, U.S.C. Program Managers are responsible for evaluating and implementing MOSA to the maximum extent in their programs.  The Modular Open Systems Approach (MOSA) is an integrated business and technical strategy for the assessment and implementation of open systems in the DoD. An open system is a system that employs modular design tenets, uses widely supported and consensus-based standards for its key Interfaces, and is subject to Validation and Verification, including Test and Evaluation, to ensure the openness of its key interfaces.

For a Major Defense Acquisition Program (MDAP) acquisition strategy that utilizes MOSA it should clearly describe:

1. How MOSA will be used, including business and technical considerations.
2. The differentiation between the major system platform and major system components being developed under the program, as well as major system components developed outside the program that will be integrated into the MDAP.
3. The evolution of capabilities that will be added, removed, or replaced in future increments.
4. The additional major system components may be added later in the life cycle.
5. How IP and related issues, such as technical data deliverables, will be addressed.
6. The system integration and system-level configuration management approach ensure the system can operate in the applicable cyber threat environment.

Acquisition Strategy Approval

The acquisition strategy is reviewed and approved by the Milestone Decision Authority (MDA) at Milestone A and the Development RFP Decision Point. The acquisition strategy is then updated for MDA approval at Milestone B, Milestone C, and Full-Rate Production Decision (FRPD) review. [2]

Acquisition Strategy Best Practices

Developing a good executable acquisition strategy is the goal of every program manager at the beginning of a program. A well-written acquisition strategy will successfully guide an entire program throughout its lifecycle. A few of the best practices and lessons learned a program manager can utilize when developing and updating the acquisition strategy are:

• Start the Development early: A program manager should start developing the acquisition strategy as early as possible. Waiting to develop the strategy at the last minute will lead to items being left out and confusing in getting it approved.
• Involve the project team: There is a lot of specialized topics mentioned in the acquisition strategy, so it’s wise to get the subject matter experts to give feedback on those topics.
• Be realistic: A lot of programs will develop their acquisition strategy based on what leadership wants to hear. This enviable leads to delays in the program and confusion among the team.
• Choose the appropriate contract type: Make sure you choose the best contract approach that provides the best value.

AcqNotes Tutorial

AcqTips:

• The Defense Acquisition Guidebook, Chapter 2, provides more detail about what should be covered in the Acquisition Strategy.

AcqLinks and References:

• [1] Defense Acquisition Guidebook (DAG) – Chapter 1
• DoD Instruction 5000.02T “Operation of the Defense Acquisition System” 
• [3] DoD Instruction 5000.85 “Major Capability Acquisition” – 6 Aug 2020
• Template: DoD Acquisition Strategy Template – 20 April 2011
• [2] Website: 10 U.S. Code § 2431a – Acquisition strategy
• Website: FAR 7.1 Acquisition Planning
• Website: DFARS 207.1 Acquisition Planning

Updated: 2/6/2024

Rank: G6.2