Defense Department program managers must incorporate new cost and technology considerations during milestone reviews, says Pentagon acquisition czar Ashton Carter.

Carter unveiled Sept. 14 a 23-point memo containing changes the Defense Department is undertaking as part of an effort to trim $100 billion in overhead spending over the next five years.

Among the changes Carter--whose official title is undersecretary of defense for acquisition, technology, and logistics--wants program managers to undertake is a business case analysis for open systems architecture conducted at every Milestone B.

There are three major milestone decisions leading up to production and deployment of defense systems, with Milestone B capping the technology development phase. The Defense Acquisition University lays out the entire life cycle management system out in a Flash-enabled chart.

Also to be included in Milestone B reviews will be a business analysis on the acquisition of technical data rights; lack of such rights have been a barrier to competition, according to a recent Government Accountability Office report.

In addition, Milestone A (which caps the pre-procurement analysis phase) and B reviews will have to include affordability analyses, Carter's memo states. Specifically, maximum cost will become a key performance parameter settled on during the Milestone A review, and a trade-off analysis of how cost and time to complete would vary under different scenarios will become part of the Milestone B review. Carter's memo says yet another memo will be forthcoming to implement the affordability review requirements, which will require examination of both acquisition, and operation and maintenance costs.

Lastly, but not least, Milestone C (the final milestone before production and deployment) reviews will soon include a range of approved production runs that Defense officials won't be able to deviate from without prior approval, the memo states. Variability in production due to budget concerns have led to increased costs, Carter writes.

For more FierceGovernmentIT reporting on the contracting and acquisition changes announced Sept. 14, click here.

 For more:
- download acquisition czar Ashton Carter's 23 point memo (.pdf)
- read a transcript of a Sept. 14 press conference given by Defense Secretary Robert Gates and Carter introducing the memo

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