The Defense Acquisition System divides acquisition programs into three (3) Acquisition Categories (ACAT): ACAT I, ACAT II, and ACAT III. The difference between each category is dependent on the location of a program in the Acquisition Process, funding amount for Research, Development, Test and Evaluation (RDT&E), total procurement cost, Milestone Decision Authority (MDA) special interest, and decision authority.
The Description and Decision Authority for ACAT I – III Programs are listed below:
|Acquisition Category||Reason for ACAT Designation||Decision Authority|
|ACAT I||Major Defense Acquisition Program (MDAP)1 (10 U.S.C. of Title 10)
MDA designation as special interest3
|ACAT ID: DAE or as delegated
ACAT IC: Head of the DoD Component or, if delegated, the CAE
ACAT IB: SAE 2
||CAE or the individual designated by the CAE 4|
||Designated by the CAE 4|
ACAT IB Programs 
- Pursuant to subsection (d) of Section 2430, of Title 10, U.S.C., the SAE of the Military Department that is managing an MDAP reaching Milestone A after October 1, 2016 will be the MDA for the MDAP unless, based on one or more exceptions in the statute, the SecDef designates an alternate MDA. In accordance with the December 18, 2017 Deputy Chief Management Officer memorandum, the SecDef has delegated the authority to designate an alternate MDA for an MDAP to the USD(A&S).
- At least annually, at submission of the Program Objective Memorandum, each SAE will provide, in writing, sufficient information to the USD(A&S) to inform whether the basis for an exception exists. This information must be provided for all programs for which the Military Department anticipates an MDD or a Milestone A decision (or later milestone decision if this will be the program’s first milestone) in the first year of the Program Objective Memorandum FYDP and that are estimated to require eventual total expenditures of funds for all increments that exceed the MDAP dollar value thresholds set in Section 2430 of Title 10, U.S.C., as adjusted and specified in Table 1.
- Programs, for which the SAE is the MDA by operation of Section 2430 of Title 10, U.S.C., will be designated within the DoD as ACAT IB programs to differentiate these programs from ACAT ID programs, where the USD(A&S) is the MDA, or ACAT IC programs, where the USD(A&S) as the DAE has delegated the DAE’s MDA to the SAE. Should the USD(A&S) designate the DAE or other official as the alternate MDA, based on one or more exceptions in the statute, the ACAT IB program will be redesignated as ACAT ID.
- Pursuant to subparagraph (d)(3)(A) of Section 2430, of Title 10, U.S.C., for programs for which the USD(A&S) has designated an alternate MDA, the Secretary of the Military Department concerned, or designee, may request reversion of responsibility back to the SAE. The USD(A&S) must make a decision with regard to the Military Department’s request within 180 days after receiving the request. In the event the MDA for the program reverts back to the SAE, either at the request of the Military Department or at the DAE’s discretion, the program would revert from its ACAT ID designation to an ACAT IB designation.
- SAEs managing ACAT IB programs must continue to comply with all statutes that require information about an MDAP to be provided to OSD or the Office of the USD(A&S). For example, Section 2430 of Title 10, U.S.C., requires the SecDef to submit Selected Acquisition Reports (SARs) for MDAPs. For ACAT IB programs, the Military Departments must continue to use the Defense Acquisition Visibility Environment system for preparation and management of APBs and SARs, to enable continued efficient and streamlined execution of Congressional reporting for all MDAPs, including ACAT IB programs, through the Principal Deputy Assistant Secretary of Defense (Acquisition Enablers).
- The Military Departments will use the Defense Acquisition Management Information Retrieval system for the ACAT IB program quarterly unit cost reporting required by Section 2433 of Title 10, U.S.C., and will continue to report other quarterly DAE Summary information.
- All programs that have been initiated by having entered the acquisition management system at either Milestone A or a later milestone before October 1, 2016, and that are designated as either an ACAT ID or ACAT IC program, will continue to follow the acquisition information and reporting requirements described in this issuance.
The Milestone Decision Authority (MDA) will consider recategorization when a program’s cost growth is within 10 percent of the next higher ACAT level. 
AcqLinks and References:
-  DoD Instruction 5000.85 “Major Capability Acquisition” – 6 Aug 2020
- Memo: ACAT Guidance on Section 2430d of Title 10
- ASAALT Memo – Implementing Acquisition Streamlining and Cultural Change – 15 Dec 2017