Lawmakers, DoD to explore portfolio-based acquisition

When it comes to acquisition, the Defense Department is mostly focused on individual products as they’re defined in the DoD budget. Lawmakers are now asking the DoD to explore portfolio-based management, which could allow the department to invest and field modern technologies a lot faster.

In the Defense Department’s science and technology community, for example, investment lines are organized around portfolios of capabilities, such as electromagnetic warfare, communications, or command and control. The approach gives more flexibility to support a wide variety of development efforts. 

But on the acquisition side, the funds are tied to a particular program, limiting the ability to bring in commercial technologies more quickly.

“The S&T set up their investment lines as portfolio lines. As soon as you get to the acquisition side, it’s like, ‘You’re building an F-35 and here is the PE for you to build an F-35, that’s it,'” Dave Tremper, the deputy assistant secretary of defense for acquisition integration and interoperability, said during the at the NDIA emerging technologies conference on Thursday. “The important subtlety there is that if you go to the S&T community, there’s a year of execution discretion on some of that portfolio investment. So if you go in and you say I need a new EW prototype, the portfolio PEs allow you to start investing in a new EW prototype based on the portfolio structure of the PEs.”

“There is a conversation going on in the department right now about portfolio-based acquisition, which would start to line up more closely and I can move money between those programs. That’s a conversation that has been stimulated by Congress. The authorizers have asked the department to look at portfolio-based acquisition which would get you to that point where I can make dynamic changes in how we invest in acquisition programs between programs.”

The Navy’s Program Executive Office for Digital and Enterprise Services has already embraced the approach. In 2021, the Program Executive Office Digital decided to move away from the conventional structure where projects are managed within specific, separate offices and reorganized itself into eight broader portfolios. 

“Portfolios, to me, are a way to take the burden off from a traditional program and project management view,” Louis Koplin, the office’s acting program executive director, said at the Navy Department CIO’s annual IT conference in Norfolk, Virginia, in June.

Outside organizations, such as the Atlantic Council’s commission, highlighted PEO Digital’s portfolio-centric strategy in its April report as an example of how this approach can lead to faster fielding technologies. The Planning, Programming, Budgeting and Execution (PPBE) reform also recommended that the DoD transition from a traditional program-centric to a portfolio-centric approach.

Meanwhile, DoD A&S has turned to the adaptive acquisition framework to give the military services more flexibility in how they acquire modern technologies. 

“What we discovered is that there’s a rapid prototyping authority within the S&T community that allows them to decide that they want to start building a prototype today. If you have acquisition next to you when you are working that process effectively, you’re kicking off a program office or a program within a week of deciding that you wanted one,” Taylor said.

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