SYM-AM-16-019 Proceedings of the Thirteenth Annual Acquisition Research Symposium Wednesday Sessions Volume I Acquisition Research: Creating Synergy for Informed Change May 4–5, 2016 Published April 30, 2016 Approved for public release; distribution is unlimited. Prepared for the Naval Postgraduate School, Monterey, CA 93943. Acquisition Research Program Graduate School of Business & Public Policy Naval Postgraduate School The research presented in this report was supported by the Acquisition Research Program of the Graduate School of Business & Public Policy at the Naval Postgraduate School. To request defense acquisition research, to become a research sponsor, or to print additional copies of reports, please contact any of the staff listed on the Acquisition Research Program website (www.acquisitionresearch.net). Acquisition Research Program Graduate School of Business & Public Policy Naval Postgraduate School Table of Contents Keynote: The Honorable Sean Stackley, Assistant Secretary of the Navy for Research, Development, & Acquisition ............................................................... vii Plenary Panel: Weapon Acquisition Program Outcomes and Efforts to Reform DoD’s Acquisition Process ..................................................................................... 1 Panel 2. Applications of Real Options Analysis in Defense Acquisition ............ 3 Acquiring Technical Data With Renewable Real Options ....................................... 5 Incorporation of Outcome-Based Contract Requirements in a Real Options Approach for Maintenance Planning .................................................................... 22 Measuring the Return on Investment and Real Option Value of Weather Sensor Bundles for Air Force Unmanned Aerial Vehicles ................................................. 35 Panel 3. Systems Engineering: New Thinking for a New Age ............................ 47 Rethinking the Systems Engineering Process in Light of Design Thinking ........... 48 Content Analysis in Systems Engineering Acquisition Activities .......................... 57 Update on the Department of the Navy Systems Engineering Career Competency Model ................................................................................................................... 63 Panel 4. Strengthening Schedule Estimates in MDAPs ...................................... 71 Acquisition Cycle Time: Defining the Problem ...................................................... 73 Schedule Analytics ............................................................................................... 89 Toward Realistic Acquisition Schedule Estimates ................................................ 95 Panel 5. Quantitative Analyses of Acquisition Outcome Drivers .................... 117 Consequences of BBP’s Affordability Initiative ................................................... 118 Further Evidence on the Effect of Acquisition Policy and Process on Cost Growth ........................................................................................................................... 135 Preparing to Be Wrong ....................................................................................... 147 Panel 6. Considerations in Software Modeling and Design ............................. 162 Achieving Better Buying Power for Mobile Open Architecture Software Systems Through Diverse Acquisition Scenarios .............................................................. 163 Architecting Out Software Intellectual Property Lock-In: A Method to Advance the Efficacy of BBP ................................................................................................... 184 Navy Mobile Apps Acquisition: Doing It in Weeks, Not Months or Years ........... 202 Panel 7. Current Issues in Contracting .............................................................. 216 Mining for Gold: Developing and Implementing a Strategic Sourcing Prioritization Model for the United States Air Force ................................................................ 218 An Economic Analysis of the Truth in Negotiations Act (TINA) .......................... 235 Acquisition Research Program: Creating Synergy for Informed Change - iii - Freedom of Market Navigation Versus Duty of Economic Rescue: The U.S. Department of the Navy’s Use of Set-Asides Parity, Discretion, and Simplified Acquisitions to Contract With Hubzone Small Businesses ................................. 251 Panel 8. Data Policies, Procedures, & Access: Illuminating How Acquisition Information Moves Within the Department to Support Analysis & Decision Making .................................................................................................................. 275 Issues With Access to Acquisition Data & Information in the Department of Defense: Policy & Practice ................................................................................. 277 Issues With Access to Acquisition Data and Information in the Department of Defense: Doing Data Right in Weapon System Acquisition ............................... 291 Panel 9. The Operational and Developmental Dimensions of Cybersecurity . 303 The Cybersecurity Challenge in Acquisition ....................................................... 304 Improving Security in Software Acquisition and Runtime Integration With Data Retention Specifications ..................................................................................... 322 Cybersecurity Figure of Merit ............................................................................. 323 Panel 10. Assessing Industrial Base Implications of a Constrained Fiscal Climate .................................................................................................................. 326 Federal Research and Development Contract Trends and the Supporting Industrial Base, 2000–2014 ................................................................................ 328 Identifying and Mitigating the Impact of the Budget Control Act on High Risk Sectors and Tiers of the Defense Industrial Base: Assessment Approach to Industrial Base Risks .......................................................................................... 347 Acquisition Research Program: Creating Synergy for Informed Change - iv - SYM-AM-16-019 Proceedings Of the Thirteenth Annual Acquisition Research Symposium Wednesday Sessions Volume I Acquisition Research: Creating Synergy for Informed Change May 4–5, 2016 Published April 30, 2016 Disclaimer: The views represented in this report are those of the author and do not reflect the official policy position of the Navy, the Department of Defense, or the federal government. Acquisition Research Program: Creating Synergy for Informed Change - v - THIS PAGE INTENTIONALLY LEFT BLANK Acquisition Research Program: Creating Synergy for Informed Change - vi - Keynote: The Honorable Sean Stackley, Assistant Secretary of the Navy for Research, Development, & Acquisition The Honorable Sean J. Stackley—assumed the duties of assistant secretary of the Navy (ASN), Research, Development, & Acquisition (RDA) following his confirmation by the Senate in July 2008. As the Navy’s acquisition executive, Stackley is responsible for the research, development, and acquisition of Navy and Marine Corps platforms and warfare systems, which include oversight of more than 100,000 people and an annual budget in excess of $50 billion. Prior to his appointment to ASN (RDA), Stackley served as a professional staff member of the Senate Armed Services Committee. During his tenure with the Committee, he was responsible for overseeing Navy and Marine Corps programs, U.S. Transportation Command matters, and related policy for the Seapower Subcommittee. He also advised on Navy and Marine Corps operations and maintenance, science and technology, and acquisition policy. Stackley began his career as a Navy surface warfare officer, serving in engineering and combat systems assignments aboard USS John Young (DD 973). Upon completing his warfare qualifications, he was designated as an engineering duty officer and served in a series of industrial, fleet, program office, and headquarters assignments in ship design and construction, maintenance, logistics, and acquisition policy. From 2001 to 2005, Stackley served as the Navy’s LPD 17 program manager, with responsibility for all aspects of procurement for this major ship program. Having served earlier in his career as production officer for the USS Arleigh Burke (DDG 51) and project naval architect overseeing structural design for the Canadian Patrol Frigate HMCS Halifax (FFH 330), he has the unique experience of having performed a principal role in the design, construction, test, and delivery of three first-of-class warships. Stackley was commissioned and graduated with distinction from the U.S. Naval Academy in 1979 with a Bachelor of Science degree in mechanical engineering. He holds the degrees of Ocean Engineer and Master of Science in mechanical engineering from the Massachusetts Institute of Technology. Stackley earned certification as a Commonwealth of Virginia professional engineer in 1994. Acquisition Research Program: Creating Synergy for Informed Change - vii - THIS PAGE INTENTIONALLY LEFT BLANK Acquisition Research Program: Creating Synergy for Informed Change - viii - Plenary Panel: Weapon Acquisition Program Outcomes and Efforts to Reform DoD’s Acquisition Process Wednesday, May 4, 2016 9:30 a.m. – Chair: Michael Sullivan, Director, GAO Acquisition and Sourcing Management 11:00