NAO 208-3

This Order prescribes the National Oceanic and Atmospheric Administration (NOAA) policies for implementing the Office of Management and Budget (OMB) Circular A-109, Major System Acquisitions, and Departmental Administrative Order (DAO) 208-3, Major System Acquisitions. Additionally, this Order prescribes policies and the structure for major systems acquisitions within NOAA.

SECTION 2. REFERENCES.

.01 OMB Circular A-109, Major System Acquisitions, datedApril 5, 1976.

.02 DAO 208-3, Major System Acquisitions, dated December 12, 1977, and Amendment 1, dated September 19, 1986.

.03 Department Organization Order (DOO) 25-5, Amendment 5, NOAA System Program Office, dated June 11, 1991.

.04 NOAA Strategic Plan, dated July 15, 1993.

.05 NOAA Implementation Plan, dated December 1, 1993.

.06 NOAA Organization Handbook, dated August 27, 1984.

.07 DAO 201-45, Department Oversight of Major Systems, dated June 4, 1993.

.08 Commerce Acquisition Manual, as authorized by Commerce Acquisition Regulations (13 CFR title 48), and included in DAO 201-41, Performance of Commercial Activities, dated April 24, 1984.

.09 NOAA Circular 91-20, August 1, 1991, Delegating Procurement Authority to the Systems Program Office (SPO), now designated as the Systems Acquisition Office (SAO) by DOO 25-5.

SECTION 3. SCOPE.

This Order applies to all major system acquisitions undertaken by NOAA, executed by the SAO, and supported by NOAA's Line, Program, and Staff Offices.

SECTION 4. BACKGROUND.

NOAA programs include scientific research, research and development, system acquisitions for operations, operations educational support, and outreach components. Successful acquisition of large and complex systems is a critical part of program execution and the attainment of NOAA mission objectives. The Federal major system acquisition process is prescribed by OMB Circular A-109 and is implemented within the Department of Commerce (DOC) by DAO 208-3. There are significant cost, technical, and schedule risks associated with the acquisition of major systems. To minimize risks, these systems will be acquired through a controlled, integrated, collaborative process that includes mission, operational, acquisition, financial, and management considerations.

SECTION 5. POLICY.

.01 Overview. NOAA will acquire new major systems in accordance with applicable Federal statutes, OMB Circulars, and DAOs. NOAA shall acquire new systems in a timely, cost-effective manner; and shall provide the best available capability consistent with requirements and within available budget resources.

.02 Responsibility. Overall responsibility for major systems acquisition is vested in the NOAA Deputy Under Secretary and in the pertinent mission, program, and system acquisition managers, as defined in this Order.

.03 Acquisition Process. In acquiring new major systems, NOAA will follow an organized and planned process that begins with mission analysis and the identification of mission needs and ends with the delivery of systems that meet program requirements, as defined in this Order. Appendix A provides more information on the derivation of mission needs and mission requirements. Mission managers, program managers, and acquisition managers will maintain a continuous communication throughout the process.

.04 SAO Involvement. Major systems acquisition in support of NOAA programs may be conducted through the NOAA SAO, or an acquisition office from another agency acting on NOAA's behalf. In the case of major systems acquisitions by a joint program acquisition office, or by an acquisition office in which NOAA is not represented, the NOAA SAO will be NOAA's representative.

.05 NOAA Involvement. NOAA will use the SAO to execute all major systems acquisitions undertaken by NOAA Line and Program Offices, consistent with the NOAA Strategic Plan and budget. The SAO will manage the acquisition process, support the mission managers and the program managers, and be accountable to the NOAA Deputy Under Secretary.

SECTION 6. IDENTIFICATION OF MAJOR SYSTEMS.

.01 Major systems, subject to this Order, are defined as:

a. those systems with a value greater than $100M, as designated by the Secretary of Commerce pursuant to OMB Circular A-109 and DAO 208-3; and

b. those systems with a value less than $100M, as designated by the NOAA Deputy Under Secretary. The following criteria will be considered when determining a designation:

1. complexity of acquiring the system, i.e., whether the system requires multiple acquisition phases, including exploration of alternative designs, development, and production;

2. complexity of integrating the system, i.e., whether the system requires a substantial integration or systems engineering effort;

3. complexity of integrating the system into the NOAA line or program office, i.e., whether the system involves cross-cutting organizational requirements, or may result in substantial change in the office's operational structure, organization, or way of doing business; and

4. whether substantial checks and balances are required, such as tradeoff analyses, cost-benefit studies, research and development, verification and validation activities, testing of plans and procedures, and system commissioning.

SECTION 7. RESPONSIBILITIES.

.01 The Assistant Secretary for Administration and Chief Financial Officer, DOC has been designated as the Department's Acquisition Executive (AE) with responsibility for ensuring the overall acquisition quality at DOC.

.02 The Under Secretary for Oceans and Atmosphere/NOAA Administrator establishes overall policies for NOAA relating to major systems acquisitions and is the responsible official for making recommendations to the Secretary of Commerce at the four key decision points (KDPs) of the systems acquisition process as defined in section 8 of this Order. The Under Secretary also:

a. ensures overall consistency between NOAA's major system acquisitions and the NOAA Strategic Plan;

b. recommends to the Secretary the necessary budgetary resources needed to carry out major systems acquisitions;

c. recommends policy to the Secretary, or exercises final agency (NOAA) authority on major changes to system acquisition approaches, or in contract modifications, redirections, or terminations.

.03 The Deputy Under Secretary for Oceans and Atmosphere formulates plans and policies for NOAA and is responsible for overall agency management. Acquisition responsibilities include, but are not limited to, the following:

a. overseeing NOAA acquisition policies and practices to ensure implementation and compliance with OMB A-109 and DAO 208-3 regarding all major system acquisitions;

b. ensuring the overall quality, responsiveness, and effectiveness of the major system acquisition process, including approving the readiness of individual system acquisitions to proceed for Secretarial review and action; and

c. directing management, supervisory, and personnel authority for the SAO.

.04 The Mission Manager is the relevant NOAA Assistant Administrator (AA) of a NOAA line organization or the relevant NOAA Program Director. The mission manager for a particular system acquisition is assigned by the NOAA Deputy Under Secretary. In cases where the major system acquisition involves more than one line or program office (e.g. satellites, ships), the mission manager responsibility may be assigned to more than one AA. Mission manager responsibilities include:

a. conducting analyses and setting mission goals and objectives;

b. identifying and developing mission needs statements to meet those objectives;

c. approving mission requirements and program requirements including integrated mission requirements for acquisitions involving two or more mission managers;

d. approving overall system acquisition test plans;

e. concurring in the program manager/system acquisition manager agreements, acquisition strategy, and all decision documents and recommendations leading up to Secretarial KDPs; and

f. concurring in the overall justification for program budgets and supporting the program and system acquisition managers in seeking necessary program and system acquisition funding.

.05 The Program Manager performs the overall program management function and is responsible for establishing effective program objectives, requirements, and milestones to ensure a stable framework for conducting system acquisitions. The program manager will be assigned by the NOAA Deputy Under Secretary, with input from the mission managers and the Assistant Administrator responsible for that particular program. The Program Manager's responsibilities include:

a. executing the total program throughout its life cycle, including research and development, definition of program requirements, operations and operational support, including facilities, and delivery of user products;

b. assisting the mission manager(s) in mission analysis, mission needs determination, defining mission requirements, assessing options for meeting those requirements, and integrating mission requirements for acquisitions involving more than one mission manager;

c. establishing program requirements by initiating necessary research and development activities, and conducting programmatic tradeoffs and analyses;

d. establishing program milestones to ensure system acquisitions are efficiently fielded in support of program requirements, as well as concurring in the overall acquisition strategy and system acquisition baselines;

e. assembling, justifying, and presenting program and budget information, including developing and approving program funding profiles and funding allocations.

f. concurring in system acquisition funding and incorporating system acquisition funding profiles and allocations into program budget submissions;

g. preparing KDP 1 and 2 decision packages and conducting briefings leading to KDP 1 and 2, as well as concurring in briefing packages for KDPs 3 and 4 (KDPs are defined in section 8 of this Order);

h. representing the overall program before NOAA, DOC, OMB, and the Congress, as well as conducting public and private outreach, and acting as liaison on interagency, congressional, and international matters;

i. concurring in the overall system acquisition test planning, and overseeing the deployment and commissioning of new systems;

j. ensuring that the program facilities, personnel, and resources necessary to support overall program objectives, requirements, and milestones, including the system acquisitions, are provided for in program plans and budgets;

k. participating in the development of system concept designs that meet program requirements; and

l. reviewing and concurring in key products of the specification development process.

.06 The System Acquisition Manager is responsible for the execution of a designated system acquisition within established cost, schedule, and system performance baselines. The system acquisition manager for a particular acquisition will be selected by the SAO Director and assigned by the NOAA Deputy Under Secretary. The systems acquisition manager performs the duties of the program manager as defined in the Commerce Acquisition Manual, particularly those sections dealing with acquisition planning and source selection. The system acquisition manager's responsibilities include:

a. managing and executing the acquisition and delivery of systems that meet established mission needs, program requirements, and program milestones consistent with applicable statutes, regulations, directives, DOC, and NOAA policies and procedures;

b. serving as the contracting officer's technical representative and actively monitoring contract performance in conjunction with the contracting officer;

c. developing cost, schedule, and system performance baselines for the acquisition; working closely with the program manager in representing the overall program before NOAA, the Department, OMB, and Congress;

d. developing strategic and detailed plans such as the acquisition strategy, plans required by DAO 208-3, and the acquisition plan in coordination with the contracting officer, and for concurrence by the mission and program managers;

e. developing the system acquisition budget and controlling system acquisition funds within approved funding profiles;

f. establishing systems for acquisition control, risk management, and contractor performance measurement;

g. assuring that configuration data are required and provided under all appropriate contracts, and that processes and systems exist (compatible with or exercised by the mission manager) to effectively perform all aspects of acquisition configuration management;

g. preparing decision packages and progress reports for and conducting KDP briefings at KDP 3 and 4;

h. developing statements of work, requests for proposals and specifications, as well as preparing test plans, conducting tests and evaluations, and managing production activities;

i. performing contractual system acceptance, delivering systems, and supporting commissioning, initial operations, and maintenance activities; and

j. representing the major systems acquisitions before NOAA, DOC, OMB and Congress.

.07 The SAO is responsible for managing designated system acquisitions, including the associated technical, business, and procurement management processes. The SAO Director's responsibilities include:

a. performing duties as head of the contracting activity;

b. directing system acquisition managers in all aspects of system acquisition with special emphasis on satisfying program requirements, program milestones, and managing within baselines;

c. providing overall management of the SAO, including approving system acquisition budgets with mission and program managers and approving the SAO operating budget;

d. coordinating the development of a process for requirements definition and documentation with mission and program managers, as well as developing system acquisition procedures, processes, and reviews;

e. participating in the research, development, and planning aspects of those system acquisitions designated to the SAO, and supporting other program research and development activities as designated;

f. supporting the program manager and mission manager(s) in mission analysis, needs, requirements definition, and other activities leading up to KDP 1; and in the concept studies exploration of alternative system design concepts and other activities in preparation for KDP 2;

g. overseeing the conduct of system acquisitions according to approved program direction and acquisition policy, including approving cost, schedule, and system performance baselines and the acquisition strategy for each system acquisition with the mission and program managers;

h. maintaining a continuous dialogue with mission and program managers;

i. providing options and tradeoffs to assist in developing program requirements, developing alternative system design concepts, providing cost and pricing options to support these actions, and concurring with overall system acquisition test plans;

j. concurring with the program manager/system acquisition manager agreements, acquisition strategy, and all decision documents and recommendations leading up to Secretarial KDPs.

k. Supporting the program and system acquisition managers in seeking necessary program and system acquisition funding.

.08 The Project Manager is a designated individual, in an agency outside NOAA, that conducts parts or all of a major system acquisition for NOAA to the extent specified in a written agreement. For example, the National Aeronautics and Space Administration is the project manager for current satellite system acquisitions, and the U.S. Air Force is the project manager for the converged polar satellite system acquisition. When a project manager is appointed, the SAO retains responsibility for successful delivery of a system that meets program objectives.

SECTION 8. NOAA SYSTEMS ACQUISITION PROCESS.

.01 Major system acquisitions will be managed according to DAO 208-3 and OMB Circular A-109. When approved by the AE or the Deputy Under Secretary, an acquisition may not be required to pass through all KDPs. This may apply to acquisitions that have been determined to be commercial off-the-shelf items, nondevelopmental items, major system modifications, or upgrades; or when it has been determined to be cost beneficial. The process may include an evolutionary acquisition approach for acquisitions, using preplanned product improvement or modification to systems for product improvements.

.02 Major system acquisitions normally will require approval by the Secretary at each of the following KDPs:

a. KDP 1: identification and definition of the mission need, its relative priority, and the general magnitude of resources that may be invested;

b. KDP 2: selection of competitive system design concepts to be advanced to a test/demonstration phase;

c. KDP 3: commitment to full-scale development and limited production; and

d. KDP 4: commitment to full production.

.03 The NOAA system acquisition process will provide the data and information needed to support the Secretarial decision at each KDP. The SAO will provide the acquisition management, systems engineering, procurement, and business management functions and processes that will guide the acquisition from inception through delivery.

.04 Management Directives and Agreements. The following directives and agreements will be entered into at the earliest possible stages in the acquisition process:

a. The Program Acquisition Directive will be issued by the Deputy Under Secretary to initiate programs and system acquisitions and to provide program direction for the system acquisition related aspects of NOAA programs. The directive will document the decisions regarding the system acquisitions to be managed by the SAO and will assign the mission manager(s), program manager, and system acquisition manager. It will also prescribe program and funding objectives, system acquisition scope and funding, system engineering responsibilities, and any NOAA policy or budget constraints.

b. The Program Manager/System Acquisition Manager Agreement will be developed and entered into by the program and system acquisition managers, subject to the concurrence of the SAO Director, mission managers, and approval of the Deputy Under Secretary. It will set forth responsibilities for managing a system acquisition to ensure that program objectives, requirements, and milestones are met. This agreement may include provisions for the tailoring of the NOAA Systems Acquisition Process to meet the specific needs, constraints, and unique circumstances of a program; phased transfer of system management and support responsibilities; and delineate any unique systems engineering requirements or arrangements and COTR delegations that have been previously approved by the contracting officer.

c. The System Acquisition Baseline Document will be developed by the system acquisition manager and approved by the SAO Director with concurrence from the program and mission managers. It will specify cost, schedule, and system performance parameters for the approved program scope and funding level for a system acquisition. The system acquisition baseline document will be used to support KDPs 2 through 4. System acquisition decisions made by the mission manager(s), program manager, SAO director, and system acquisition manager will be guided by baseline management procedures approved by the Deputy Under Secretary.

.05 Mission and Program Requirements. Mission requirements will be defined by the mission manager(s). The NOAA requirements process will be used to develop mission requirements and to transform them into program requirements that are the basis for system alternatives and tradeoffs. Program requirements will be developed, refined, and documented by the program manager with SAO support. Where program requirements cannot be fully defined at the outset, they will be defined and documented incrementally.

.06 Program Requirements. Approved program requirements are the basis for developing system specifications and acquisition baselines for cost, schedule, and system performance. In close collaboration with the program and mission manager(s), the SAO will lead an interactive systems engineering process to develop contract specifications for the acquisition process. New and revised program requirements will be managed and controlled through a structured change management process.

.07 Budget Strategy. Developing budget strategy will be a corporate, deliberative process:

a. Major systems acquisition cost baselines and financial profiles will be brought into balance at the beginning of each budget formulation cycle. System acquisition budgets will be developed using cost estimating techniques, cost baselines, funding profiles, and change management procedures. System acquisition budgets will be incorporated into overall program budget submissions supporting strategic planning initiatives. The NOAA budget call will request an exhibit listing potential system acquisitions identified in the strategic planning process. Contingency funding, as well as product and process improvements, will be a part of NOAA's budget strategy.

b. At the beginning of each year, the program manager, in coordination with the system acquisition manager, will revise the program objectives and budget for that year consistent with mission priorities, interdependencies of program elements, and the availability of appropriated funds.

c. Program and systems acquisition funding will be allocated to the program manager and to the systems acquisition manager by the NOAA Deputy Under Secretary. The NOAA Comptroller will provide the allocated funds. The program manager and the systems acquisition manager are accountable for managing the acquisition cost baseline as reflected in their allocated financial profile.

.08 Acquisition Strategy. An acquisition strategy for executing a major system acquisition will be developed before KDP2 and updated for each KDP.

.09 Cost Estimating/Analysis. Cost estimating and analyses to support planning, budgeting, and system acquisition will be conducted by the SAO. This will include life cycle cost analyses and cost estimates for alternative design concepts, KDPs, system acquisition budgets, tradeoff analyses, and configuration management.

.10 Product and Process Improvement. The acquisition process will include programmatic and budgetary planning for product and process improvements. The mission and program requirements for these improvements will be developed and approved through the NOAA requirements process. These improvements may be preplanned (evolutionary) or continuous improvements developed during system acquisition. Technology development investigations, tradeoff studies, life cycle cost estimates, user impact assessments, and other studies and analyses will be conducted to provide the basis for new mission and program requirements leading to product and process improvement recommendations.

.11 System Changes. System changes after contract award require the joint involvement of the mission manager(s), program manager, and the SAO. Change requests will be formally documented according to the NOAA mission and program requirements and configuration management processes. Approvals of these change requests will involve the Deputy Under Secretary, mission and program managers, and the SAO, before budget submission.

SECTION 9. EFFECT ON OTHER ISSUANCES.

None.

Signed
Director, Office of Administration

Office of Primary Interest:

Deputy Under Secretary (DUS) Attachment

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Appendix A to NAO 208-3 (Amendment effective 9/27/96)

APPENDIX A.

THE GENERIC MISSION NEEDS/MISSION REQUIREMENTS PROCESS

.01 Process Participants

The process for acquiring major systems begins with a mission analysis and the identification of mission needs (Section 5.03). The mission manager is responsible for identifying and developing mission needs statements and approving mission requirements (Section 7.04). The program manager is responsible for assisting the mission manager in these activities (Section 7.05). The SAO is responsible for supporting the program manager and the mission manager in identifying mission needs and determining mission requirements (Section 7.07). Useful contributions to the process often are obtained from functional groups, field organizations, industry (as a technology resource), external users, and independent reviewers.

.02 The Generic Mission Needs/Mission Requirements Process

The Generic Mission Needs/Mission Requirements Process is described in Figure A-1. The purpose of the process is to support specific major system acquisitions by providing clearly identified mission needs and mission requirements. Operational, maintenance, and logistics concepts also are the products of this process. The specific products are the Mission Needs Statement, the Mission Requirements Document, and the concepts for operation, maintenance, and logistics that are timely, clearly written, and substantive.


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