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Acquisition Process

Business Capability Acquisition Cycle


bcac-phasesThe DoD Business Capability Acquisition Cycle (BCAC) is a process that seeks to develop and implement business/acquisition processes to acquire systems more efficiently. The process facilitates changes in the process through doctrine, organization, training, materiel, leadership and education, personnel, facilities, and policy to drive performance improvements, efficiencies, and effectiveness. BCAC aligns commercial best practices and minimizes the need for customization of commercial products to the maximum extent possible.


Instruction: DoD Instruction 5000.75 “Business Systems Requirements and Acquisitions”


5 Step Process in the BCAC process: [1]

  1. Capability Need Identification: The objective is to establish a clear understanding of needed business capabilities so that the functional sponsor and MDA can decide to invest time and resources into investigating business solutions.
  2. Business Solution Analysis: The objective of this phase is to determine the high-level business processes supporting the future capabilities so that the functional sponsor and CAE or designee can maximize the use of existing business solutions and minimize the creation of requirements that can only be satisfied by a business system.
  3. Business System Functional Requirements & Acquisition Planning: An objective of this phase is to establish the acquisition strategy that will support functional requirements.
  4. Business System Acquisition Testing & Deployment: The objective of this phase is to achieve organizational change through business process changes and delivery of the supporting business system, with minimal customization.
  5. Capability Support: The objective of this phase is to provide enduring support for the capability established by the business system. This includes active engagement in both functional and technical opportunities for continuous process improvement to maintain the relevance of the capability, the supporting technology, and the hosting solution.


Figure: Business Capability Acquisition Cycle [1]

Table: DoD Business System Categories [1]


AcqLinks and References:

Update: 6/27/2018

Acquisition Process

Acquisition Process Overview

Defense Acquisition System


Defense Acquisition System

The Department of Defense (DoD) Acquisition Process is one of three (3) processes (Acquisition, Requirements, and Funding) that makeup and support the Defense Acquisition System and is implemented by DoD Instruction 5000.02 “Operation of the Adaptive Acquisition Framework”. This instruction provides the policies and principles that govern the defense acquisition system and forms the management foundation for all DoD programs. It also identifies the specific statutory and regulatory reports and other information requirements for each Milestone Review and decision point. The DoD calls the system an event-based process where a program goes thru a series of processes, milestones, and reviews from beginning to end.  Each milestone is the culmination of a phase where it’s determined if a program will proceed into the next phase. The DoD management technique that integrates all these essential acquisition activities is called; Integrated Product and Process Development (IPPD).


Major Capability Acquisition

The Major Capability Acquisition Process is for those programs where the traditional acquisition approach has been determined to be the most appropriate. The process is made up of phases and milestones and is detailed in DoD Instruction 5000.02 “Operation of the Adaptive Acquisition Framework”.

Acquisition System

 Figure: Major Capability Acquisition Process


Below is a list of the phases that make up the DoD Acquisition Process. Each phase is also depicted in the figure above:

Each phase of the acquisition process has specific DoD regulations and federal statutes that must be met. At the end of each phase, there is a Milestone Review (A,B,C) to determine if the acquisition program has met these required regulations and statutes to continue on into the next phase.


Visit: Milestone Requirements Matrix lists all the key criteria for each phase.


Acquisition Wall Chart: Defense Acquisition Lifecycle Wall Chart – Jan 18


Each acquisition program falls into an Acquisition Category (ACAT) depending on its overall funding level and importance. The category dictates the level of oversight a program will require. This oversight is provided by a Milestone Decision Authority (MDA) which is appointed by DoD senior leadership. The MDA seeks advice from a Defense Acquisition Board (DAB), chaired by the Under Secretary of Defense (OSD) Acquisition & Sustainment (A&S), on major acquisition decisions. The most expensive programs are known as Major Defense Acquisition Programs (MDAPs) or Major Automated Information System (MAIS). These programs have the most extensive statutory and regulatory reporting requirements. The ACAT levels are shown below and for more detailed information see the ACAT link.

  • ACAT I: R&D of more than $524M and total procurement $3.065 Billion
  • ACAT II: R&D of more than $200 and total procurement $920 Million
  • ACAT III: Less than ACAT II


Adaptive Acquisition Framework

The Adaptive Acquisition Framework (AAF) supports the Defense Acquisition System by allowing acquisition program personnel the authority to plan and manage their programs and is implemented by DoD Instruction 5000.85 “Major Capability Acquisition”. The framework has six (6) distinct acquisition pathways of which Major Capability Acquisition is one of them.


Main Reference

The Defense Acquisition Guidebook (DAG) is the main guide that details the overall DoD acquisition process and how it fits into the overall Defense Acquisition System. It provides detailed guidance for the development, execution, and disposal of all DoD acquisition programs. It’s designed to complement the policy documents governing DoD acquisitions by providing the acquisition workforce with discretionary best practices that should be tailored to the needs of each program.






AcqLinks and References:

Updated: 9/15/2020

Acquisition Process

Milestone Decision Authority (MDA)


The Milestone Decision Authority (MDA) is the overall executive sponsor responsible for any Major Defense Acquisition Program (MDAP).  The MDA formally initiate each increment of an evolutionary acquisition program as required by DoD Instruction 5000.02 “Operation of the Defense Acquisition System”. They determine if a program has met its phase exit requirement and can proceed into the next phase during a Milestone review in terms of cost, schedule, and performance.  The Under Secretary of Defense (USD) (AT&L) is the MDA for all major Acquisition Category (ACAT) 1 program unless delegated. Program initiation may occur at Milestone B or C.


For MDAP at Milestone B, the MDA must certify in writing to Congress that the program is affordable and that the Director of Cost Assessment and Program Evaluation (DCAPE) concurs with reasonable cost and schedule estimates to execute the program development and production plans.


MDA Reviews: 


The MDA is the approval authority for:


AcqLinks and References:

Updated: 7/11/2017

Acquisition Process

Acquisition Strategy


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]


Acquisition Strategy Main Elements [1]

  1. Business Strategy: 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, 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: 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.

Template: DoD Acquisition Strategy Template – 20 April 2011


Federal Acquisition Regulation (FAR) 7.1 and Defense Federal Acquisition Regulation Supplement (DFARS) 207.1 address policies related to acquisition planning and the development of written acquisition plans.


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


The Acquisition Strategy should also:

  • 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 successful completing 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 business, including Small Disadvantaged Business, 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 including 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.


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



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

AcqLinks and References

Updated: 3/18/2020

Acquisition Process

System Verification Review (SVR)


The System Verification Review (SVR) is a product and process assessment to ensure the system under review can proceed into Low-Rate Initial Production (LRIP) and Full-Rate Production (FRP) within cost, schedule, risk, and other system constraints during the Engineering, Manufacturing, and Development (EMD) Phase.  It assesses the system functionality and determines if it meets the functional requirements in the Capability Development Document (CDD) and draft Capability Production Document (CPD) documented in the functional baseline. The SVR establishes and verifies final product performance and provides inputs to the CPD.


Checklist: DoD System Verification Review (SVR)


Typical SVR success criteria include affirmative answers to the following exit questions:

  1. Does the status of the technical effort and system indicate operational test success (operationally effective and suitable)?
  2. Can the system satisfy the Capability Development Document (CDD) and draft Capability Production Document (CPD)?
  3. Are adequate processes and metrics in place for the program to succeed?
  4. Are the risks known and manageable?
  5. Is the program schedule executable within the anticipated cost and technical risks?
  6. Are the system requirements understood to the level appropriate for this review?
  7. Is the program properly staffed?
  8. Is the program’s non-recurring engineering requirement executable with the existing budget?
  9. Is the system producible within the production budget?


The SVR is often conducted concurrently with the Production Readiness Review (PRR) and Functional Configuration Audit (FCA). Product support IPT members should participate in the review to:

  • Address system supportability and, based on developmental testing or analysis whether the sustainment features will satisfy the Capability Development Document/draft Capability Production Document and Sustainment Key Performance Parameters (KPP) / Key System Attributes (KSA).
  •  Adequate processes are in place so the sustainment performance metrics can be used to help the program to succeed in meeting user needs.
  • Ascertain if the system is supportable within the procurement, operations, and support budgets.


The SVR risk assessment checklist is designed as a technical review preparation tool and should be used as the primary guide for assessing risk during the review. This checklist is attached below.




AcqLinks and References:

Updated: 6/01/2018

Acquisition Process

System Functional Review (SFR)


The System Functional Review (SFR) is a technical review to ensure that the system’s functional baseline is established and can satisfy the requirements of the Initial Capabilities Document (ICD) or draft Capability Development Document (CDD) within the currently allocated budget and schedule. It also determines whether the system’s lower-level performance requirements are fully defined and consistent with the system concept and whether lower-level systems requirements trace to top-level system performance requirements.  The SFR is conducted during the Technology Maturation & Risk Reduction (TMMR) Phase of a program.


A critical component of an SFR review is the development of representative operational use cases for the system. System performance and the anticipated functional requirements for operations maintenance, and sustainment are assigned to sub-systems, hardware, software, or support after a detailed analysis of the architecture and the environment in which it will be employed. The SFR determines whether the system’s functional definition is fully decomposed to its lower level, and that Integrated Product Teams (IPT) are prepared to start preliminary design.


The system’s lower-level performance requirements are evaluated to determine whether they are fully defined and consistent with the system concept, and whether traceability of lower-level systems requirements to top-level system performance and the CDD is maintained. This activity results in two major systems engineering products: the final version of the system performance specification and draft version of the performance specifications, which describe the items below system level (item performance specifications).


Completion of the SFR should provide the following:

  1. An established system functional baseline with traceability to lower-level performance requirements,
  2. An updated risk assessment for the Engineering, Manufacturing and Development (EMD) Phase,
  3. An updated Cost Analysis Requirements Description (CARD) or a CARD-like document based on the system functional baseline,
  4. An updated program development schedule including system and software critical path drivers, and
  5. A preliminary system-level maintenance plan with updates applicable to this phase.



  • The SFR is the first review that begins to allocate requirements to separated sub-systems and organizational IPTs
  • An SFR review is where the need for Interface Control Documents becomes necessary to define areas of responsibility and constraints requiring coordination across IPTs.

AcqLinks and References:

Updated: 5/29/2018

Acquisition Process

Simplified Acquisition Management Plan


A Simplified Acquisition Management Plan (SAMP) describes a program’s overall acquisition approach. It describes the management framework, provides a vehicle for obtaining required statutory and regulatory approvals, and document waivers. The SAMP serves as the formal Acquisition Strategy for programs that do not require a separate Acquisition Strategy in accordance with the Defense Federal Acquisition Regulations Supplement (DFARS).  The Systems Engineering Plan (SEP), risk management, test strategy, and contract execution approaches are integrated into the SAMP which allows stakeholders to review their functional areas in the right context while avoiding redundant sections.


The SAMP should combine and simplify document requirements as needed by the Program Manager (PM) and agreed to by the Milestone Decision Authority (MDA). Program SAMPs must, however, meet statutory and regulatory requirements for each milestone and at other decision points during the acquisition process in compliance with DoD Instruction 5000.02 “Operation of the Defense Acquisition System”


Mandate use of SAMP:

  • Check with your agency for current SAMP use guidance
  • Army: New Acquisition Category (ACAT) III programs and selected ACAT II programs delegated to Program Executive Officers (PEO) default to using SAMP unless the needs of the program dictate otherwise. All ACAT IV programs must use a SAMP. [1]
  • Air Force: Don’t know
  • Navy: Don’t know


AcqLinks and References:

Updated: 12/26/2018

Acquisition Process

Selected Acquisition Report (SAR)


A Selected Acquisition Report (SAR) is a comprehensive summary of a Major Defense Acquisition Program (MDAP) Acquisition Category (ACAT) I program that is required for periodic submission to Congress by the Secretary of Defense. It’s mandated by Title 10 USC § 2432 “Selected Acquisition Reports”.



The SAR includes the status of the total program cost, schedule, and performance, as well as program unit cost and unit cost breach information. It also includes a full life-cycle cost analysis of the program ad all its increments.



The PM will use the Defense Acquisition Management Information Retrieval (DAMIR) application to prepare the SAR.



The SAR for the quarter ending December 31 is the annual SAR. The Program Manager (PM) will submit the annual SAR within 60 days after the President transmits the following fiscal year’s budget to Congress. Annual SARs will reflect the President’s Budget and supporting documentation. The annual SAR is mandatory for all Acquisition Category (ACAT) I programs.

The PM will submit quarterly exception SARs for the quarters ending March 31, June 30, and September 30 not later than 45 days after the quarter ends. Quarterly SARs are reported on an exception basis, as follows: [1]

  • The current estimate exceeds the Program Acquisition Unit Cost (PAUC) objective or the Average Procurement Unit Cost (APUC) objective of the currently approved Acquisition Program Baseline (APB) in base-year dollars by 15 percent or more;
  • The current estimate includes a 6-month or greater delay, for any schedule parameter, that occurred since the current estimate reported in the previous SAR;
  • Milestone B or Milestone C approval occurs within the reportable quarter.
  • Quarterly exception SARs will report the current estimate of the program for cost, schedule, and performance.

Pre-Milestone B projects may submit Research, Development Test & Evaluation (RDT&E)-only reports, excluding procurement, military construction, and acquisition-related operations and maintenance costs. DoD Components should notify the Under Secretary of Defense (USD) Acquisition Technology & Logistics (AT&L) with names of the projects for which they intend to submit RDT&E-only SARs 30 days before the reporting quarter ends. USD(AT&L) should also notify Congress 15 days before reports are due. [1]



The Secretary of Defense may waive the requirement for submission of a SAR for a program for a fiscal year if: [1]



The Under Secretary of Defense (Acquisition, Technology, and Logistics) will consider terminating reporting of SAR data when 90 percent of expected production deliveries or planned acquisition expenditures have been made, or when the program is no longer considered an ACAT I program in accordance with section 2432 of tile 10, United States Code.


AcqLinks and References:

Updated: 6/19/2018

Acquisition Process

Production Readiness Review (PRR)


The Production Readiness Review (PRR) assesses a program to determine if the design is ready for production. It assesses if the prime contractor and major subcontractors have accomplished adequate production planning without incurring unacceptable risks that will breach thresholds of schedule, performance, cost, or other established criteria. PRRs are normally performed as a series of reviews toward the end of Engineering, Manufacturing and Development (EMD) Phase and should be conducted during System Capability and Manufacturing Process Demonstration to identify and mitigate risks as the design progresses.

Acquisition System


Checklist: Production Readiness Review (PRR)


The PRR evaluates the full, production-configured system to determine if it correctly and completely implements all system requirements. The review determines whether the traceability of the final system requirements to the final production system is maintained. A successful review is predicated on the determination that the system requirements are fully met in the final production configuration and that production capability forms a satisfactory basis for proceeding into Low-Rate Initial Production (LRIP) and Full-Rate Production (FRP).


The PRR should review:

  • The manufacturing readiness process
  • Quality management system
  • Production planning
  • System requirements compliance
  • Inventory management
  • Supplier management


Note: IEEE 5288.2 “Standard for Technical Reviews and Audits on Defense Programs” is the standard for technical reviews and audits to be performed throughout the acquisition life cycle for the US Department of Defense (DoD) and other defense agencies. This standard guides the DoD and contractor on what is required during an PRR


AcqLinks and References:

Updated: 4/11/2018

Acquisition Process

Performance-Based Acquisitions


Performance-Based Acquisition (PBA) – formerly Performance-Based Contracting (PBC) – is a technique for structuring all aspects of an acquisition around the purpose and outcome desired as opposed to the process by which the work is to be performed.  It’s a concept based on reforms mandated to all Federal Agencies by the President’s Management Agenda, the Government Performance and Results Act of 1993, and the Federal Acquisition Streamlining Act of 1994.  Using this approach, the government no longer develops a prescriptive Statement of Work (SOW) dictating how the contractor will achieve project milestones. Instead, the government develops a Statement of Objectives (SOO) or Performance Work Statement that describes the overall outputs and objectives but does not specify how to achieve those outputs. This approach allows private firms more flexibility to conduct operations in a manner that is cost-effective for their company while ensuring that required milestones are achieved.


Guidebook: Performance-Based Acquisitions


To be considered performance-based, an acquisition should contain, at a minimum, the following elements:

  1. Statement of Objectives (SOO): Describes the requirement in terms of measurable outcomes rather than by means of prescriptive methods.
  2. Measurable Performance Standards: To determine whether performance outcomes have been met, defines what is considered acceptable performance.
  3. Remedies: Procedures that address how to manage performance that does not meet performance standards. While not mandatory, incentives should be used, where appropriate, to encourage performance that will exceed performance standards. Remedies and incentives complement each other following elements
  4. Performance Assessment Plan: Describes how contractor performance will be measured and assessed against performance standards. (Quality Assurance Plan or Quality Assurance Surveillance Plan)


By describing requirements in terms of performance outcomes, agencies can help achieve the following objectives:

  • Maximize performance: Allows a contractor to deliver the required service by following its own best practices. Since the prime focus is on the end result, contractors can adjust their processes, as appropriate, through the life of the contract without the burden of contract modifications provided that the delivered service (outcome) remains in accordance with the contract. The use of incentives further motivates contractors to furnish the best performance of which they are capable.
  • Maximize competition and innovation: Encouraging innovation from the supplier base by using performance requirements maximizes opportunities for competitive alternatives in lieu of government-directed solutions. Since PBSA allows for greater innovation, it has the potential to attract a broader industry base.
  • Encourage and promote the use of commercial services: The vast majority of service requirements are commercial in nature. The use of FAR Part 12 (Acquisition of Commercial Items) procedures provides great benefits by minimizing the reporting burden and reducing the use of government-unique contract clauses and similar requirements, which can help attract a broader industry base.
  • Shift in risk: Much of the risk is shifted from the government to industry since contractors become responsible for achieving the objectives in the work statement through the use of their own best practices and processes. Agencies should consider this reality in determining the appropriate acquisition incentives.
  • Achieve savings: Experience in both government and industry has demonstrated that the use of performance requirements results in cost savings.


AcqLinks and References:

Updated: 7/11/2017