April 15, 1996

According to James McAleese, Esq., Principal of McAleese & Associates, P.C., a McLean-based Government Contracts Law Firm, the "DoD 5000 rewrite" shifts Program Managers from risk aversion to "prudent risk management," providing mandatory guidance to tailor programs instead of inflexible "how to" directions. Many acquisition professionals traditionally tended to treat "guidance" as "mandatory" because it was difficult to distinguish the two. That risk aversion added unnecessary requirements, which drove up costs to industry and government alike.

The 5000 rewrite makes it clear that there is no longer a "one size fits all" approach to program management. Program managers are now encouraged to "tailor" their programs by increased use of non-traditional contracting vehicles such as (1) Advanced Concept Technology Demonstrations; (2) rapid prototyping; (3) evolutionary and incremental acquisition; and (4) flexible technology insertion. This should better leverage RDT&E funds, and accelerate contractor return on IR&D, wholly funded R&D, and B&P, by faster award of Full-Rate Production ("FRP"). The rewrite also prescribes increased use of modeling and simulation, which has broad implications for virtual prototyping, growth of technical and support services, and leveraging of proprietary data and software assets, as well as their protection. Due to historical software complexities on major programs, there is also "critical focus" now placed on "past performance" explanation of budget and schedule overruns on software-intensive development programs, industry experience, and design process maturity. This complements the congressionally mandated evaluation of contractor past performance for all civilian and DoD solicitations in excess of $1,000,000, issued after July 1, 1995 under the Federal Acquisition Streamlining Act ("FASA").

There are several additional areas of change. First, there is a new "hierarchy of material alternatives," with mandatory sequential preference for (1) purchase and modification of commercial systems; (2) modification of existing items ("Service-Life Extension Program") or extension of current FRP; (3) new cooperative international development programs, (4) new joint service development programs; and, last and least, (5) new service-unique development programs. This implicitly recognizes "Cost-As-Independent-Variable" and attempts to reduce RDT&E funding by opting for SLEPS, commercial items, and growth of existing FRP. However, it may expend greater amounts of IR&D, wholly funded R&D, and B&P because contractors must now educate a broader audience in international and joint service development programs than historic service-specific customers. This must also be integrated with the new "Technology Development Approaches" which use government/industry Integrated Product Teams ("IPT") to formulate strategies for funding of RDT&E to achieve performance improvements over existing "baseline" systems such as helicopters, fixed-wing aircraft, avionics, spacecraft, etc. Second, is the institutionalization of "Overarching," "Working-Level" and "Program-specific" IPTs within DoD. The formalization of IPTs promises greater teaming with industry in identifying solutions to government requirements. Exactly when industry will be invited to participate, how organizational conflicts of Interest ("OCI") will be pre-empted, and how inadvertent leakage of proprietary trade secrets, data, and software shall be minimized, remains unresolved. Program-specific strategies must be crafted by contractors to avoid such potential pitfalls for obvious reasons.