… the Secretary of Defense shall establish guidance authorizing the use of acquisition pathways… for the rapid acquisition of software applications and software upgrades that are intended to be fielded within one year. A contract awarded under this section–
(1) shall be in an amount equal to or less than $50,0000; and
(2) may be entered into for a period of not more than one year…
[The contract] may contain an option to extend the contract once, for a period not to exceed one year, to complete the implementation of one or more specified software applications and software upgrades identified during the period of the initial contract. Such an option may not be in an amount greater than $100,000,000.
That was from the text of Section 801 of the FY 2020 NDAA bill, “Establishment of Acquisition Pathways for Software Applications and Software Upgrades.”
Like Middle Tier Acquisition passed in Section 804 of the FY 2016 NDAA, the software programs will not be subject to the JCIDS requirements process or the DODD 5000.01 acquisition process. However, for Middle Tier, the DOD has 2-5 years to prototype or field the equipment. For the Section 801 Software authorities, it is a one-year program with a one-year contractual extension.
The duration is significant. A one or two year program is not likely to accomplish the kitchen sink of requirements. More likely than building new systems, the authority probably intends modular apps and upgrades, as the language suggests. But then the funding limit is quite high. $50 million in the first year and $100 million in the second is a lot of software development.
It is unlikely that a firm can ramp up to spend $50 million on scarce software development labor within a year. At a generous $250 an hour, that implies 100 full-time equivalents for the entire duration. 100 software developers is a huge team to pull together in an instant for a year, potentially ramping up to 200 in the second year.
As Fredrick Brooks understood in The Mythical Man-Month, software development is different than hardware production. It takes a lot of time and training to on-board a new developer, and the coordination between participants grows exponentially as the number of participants grows linearly.
I’d expect that each software program used under this authority would be a new increment or block to existing major software systems. The authority might not benefit new software efforts, as opposed to building upon the legacy, because Section 801 doesn’t address the funding issue. It will still take 2 or 3 years to program a new line item in the budget, if things go smoothly. Too bad Congress didn’t follow up on the DIB’s recommended “white” appropriation to program software within the year of the budget.
Besides the bureaucracy of lining up funds, another issue that also plagued Middle Tier programs is that the Section 801 software programs are not exempted from DODI 5000.02 reporting requirements. These include the Acquisition Strategy, Technology Risk Assessments, Analysis of Alternatives, Cost and Software Data Reporting, Earned Value Management, and so forth. Approval of these documents requires a number of signatures from around the DOD.
Additionally, an Independent Cost Estimate (ICE) from OSD CAPE appears to be required for each Section 801 program. Besides OSD CAPE only having about 20 cost estimators, who have their hands more than full with other programs, it often takes 6 months to receive a quality ICE. In order to keep up, OSD CAPE may need to be able to delegate many of the cost estimates to the service cost centers.
Another issue is that Section 801 software programs are intended to be rapid by making the Defense/Service Acquisition Executive directly responsible for it. That is a high level official, including USD(A&S), Assistant SecAF(Acquisition), and the director of the Missile Defense Agency. That executive is supposed to approve summary requirements, assign a Program Manager (PM), evaluate the performance of the PM, and have the PM report directly to him or her. That is a very high level official who is supposed to be intimately managing perhaps dozens of software programs, in addition to existing duties.
At $50 million, or at most $150 million, Section 801 software programs will be at the level of ACAT III programs or lower. ACAT III programs are usually delegated to the Program Executive Officer, who reports to the Acquisition Executive. It would make a great deal of sense to provide the Acquisition Executive the option to delegate Section 801 programs to a PEO or equivalent. (Ultimately, however, approval from the Acquisition Executive, as well as numerous other officials, will be needed just to line funds up in the first place.)
The NDAA bill also provides a nebulous amount of authority to the PM to make tradeoffs:
The project manager shall be authorized, in coordination with the users and testers of the software to be acquired, to make tradeoffs among lifecycle costs, requirements, and schedules to meet the goals of the acquisition.
In reality, the PM will not be making such decisions without approvals from more than just the users and testers. Indeed, if the PM made any significant changes, then many of the 5000.02 reporting documents will require major updates and approvals. For example, changes of direction are reflected in changes to the Work Breakdown Structure, which as any accountant can tell you is difficult to change midway through a contract. Then, the data collected on the back-end becomes very difficult to interpret, and requires a lot of normalization.
More importantly, the PM will be unwilling to make significant choices without the approval of the decision authority, which in this case is a very busy Acquisition Executive. The PM will recognize that he is managing something very much smaller and less important than the PEOs and other high level officials also reporting directly to the Acquisition Executive. Being rapid and flexible will then be difficult to accomplish.
A final point is that the bill specifically allowed Section 801 programs to enter into Time & Material contracts, but it didn’t say anything about using Other Transactions Authorities.
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