Defense Acquisition and Cost Policy Flashcards
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Read the first 6 Defense Acquisition and Cost Policy flashcards as text
What is 'other transaction authority (OTA)' and how does it affect cost visibility for Army programs?
Answer: OTA allows DoD to use agreements outside FAR/DFARS for research and prototype activities; it reduces standard cost reporting requirements, limiting the government's visibility into contractor costs
OT agreements can streamline acquisition and access non-traditional contractors, but the absence of standard contract clauses (like CDR) means less standardized cost data is collected for future estimating.
What is 'multiyear procurement (MYP)' authority and how does it affect Army cost estimates?
Answer: MYP allows the Army to contract for multiple years of production in a single contract, enabling contractor investments that reduce unit cost; estimates must reflect learning curve and economic order quantity savings
MYP contracts provide contractor stability that enables investments in tooling and labor efficiency, and cost estimates must reflect the resulting unit cost reductions compared to annual contracting.
What does the 'Weapon System Acquisition Reform Act (WSARA) of 2009' require related to DoD cost estimating?
Answer: WSARA requires CAPE to conduct independent cost estimates for all MDAPs before milestone decisions and mandates independent technical risk assessments
WSARA strengthened independent oversight of major programs by requiring CAPE ICEs and independent technical risk assessments at every major milestone, reducing reliance solely on program-office estimates.
What is 'affordability analysis' and how has it been incorporated into DoD acquisition policy?
Answer: Affordability analysis assesses whether projected program costs fit within DoD's top-line budget constraints and requires programs to establish unit cost caps at Milestone A
DoD policy requires programs to demonstrate affordability by establishing and maintaining should-cost targets and unit cost goals tied to the portfolio's available funding, not just the program's own requirements.
Under what circumstances can an Army program use 'incremental funding' rather than full funding for a procurement contract?
Answer: Incremental funding is generally prohibited for procurement contracts under full funding policy but may be authorized by Congress for specific programs through appropriations language
Full funding policy is the DoD standard for procurement, but Congress occasionally authorizes incremental funding for specific major programs through specific statutory authority or appropriations language.
What is a 'Milestone Decision Authority (MDA)' and what cost documentation must be in place before a Milestone B decision?
Answer: The MDA is the official authorized to approve program entry into a new acquisition phase; before Milestone B, an approved program cost estimate, affordability assessment, and CAPE ICE must be in place
DODI 5000.02 specifies the documentation package required before each milestone; at Milestone B (entering System Development and Demonstration), the MDA must have independent cost and schedule estimates to make an informed decision.