By Jason Miller
Executive Editor
Federal News Radio

The Defense Department is changing its approach for developing and implementing business systems worth more than $1 million.

Ashton Carter, DoD’s under secretary of Defense for Acquisition, Technology and Logistics, issued an interim guidance Nov. 15 detailing the new steps the military must take.

Carter is mandating use of the Business Capability Lifecycle (BCL), which merges requirements under the Joint Capabilities Integration and Development System (JCIDS), the Operation of the Defense Acquisition System (DAS) and the Investment Review Board (IRB)/Defense Business System Management Committee (DBSMC) governance bodies for defense business capabilities and systems.

The Business Capability Lifecycle is conducted in three phases: business capability definition, investment management and execution.

“It merges three major DoD processes to provide a single governance and decision support framework to enable faster delivery of business capabilities,” states the BCL page on the Business Transformation Agency’s website.

DoD will issue a formal directive-type memo in the coming months, but in the meantime, the interim guidance is effective immediately, Carter wrote.

DoD has long struggled to get a handle on its business systems. A May 2010 report by the Government Accountability Office found DoD has 156 business systems worth more than $1 million. Defense business systems have been on the GAO High-Risk List since 1995.

Carter said the services and Defense agencies will use BCL for all Defense business systems, but the memo details two different paths depending on the type of system.

For those that are considered major automated information systems(MAIS), Carter instructed the military to ensure all functional capabilities are in place in five years after the funds were first obligated. A MAIS system is one where DoD will spend at least $32 million in a single year on defining, designing, developing or deploying such an application, and at least $378 million over the life of the system.

For those that are not considered MAIS, they must achieve initial operating capability within five years from milestone A.

“For all DBS that do not meet the MAIS threshold or are not otherwise designated, the heads of the DoD components shall provide oversight of their acquisition processes and procedures, which shall be consistent with applicable statutes, regulations, and this guidance,” Carter wrote. “If a DBS below the MAIS threshold is designated as special interest by either the USD(AT&L) or the Deputy Chief Management Officer (DCMO), it shall be subject to OSD oversight.”

The memo focuses mainly on MAIS business systems detailing roles and responsibilities and timelines for meeting goals.

Carter said the Defense Business System Management Committee is responsible for approving all certification authorities for modernization funds.

The certification authority “shall certify investments and shall employ the Investment Review Boards (IRBs) to provide oversight of investment review processes and procedures, and advise the milestone decision authority (MDA) on acquisition matters for DBS supporting their respective areas of responsibility,” Carter wrote.

The IRBs will advise the milestone decision authority and must receive all documentation 30 days before a meeting to approve a program.

The IRB also will approve problem statements, requirements changes and technical configuration changes and the business case to ensure the program is performing business process reengineering.

The memo also said when program managers want to use an incremental approach to system development, they must break each section into discrete, fully-funded and manageable modules.

“Each increment shall be a useful and supportable operational capability that can be developed, tested, produced, deployed and sustained,” the memo states. “To facilitate rapid and responsive development, no more than 12 months shall normally elapse between the materiel development decision (MDD) and milestone A. Following milestone A, no more than 12 months shall normally elapse between the initial contract or option award and milestone B. Following milestone B, no more than 18 months shall normally elapse between contract or option award and the full deployment decision (FDD).”

Each program must also go through an independency risk assessments, use earned value management and, if they are using commercial software, buy through the DoD Enterprise Software Initiative program.

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