Calling its current budget process "mismatched" to the fast pace of the information technology marketplace, the Defense Department says it wants major changes to the way it funds, buys and manages IT projects.

In a report from the office of the secretary of defense sent to Congress in November (but only recently posted online), the DoD says it's already taken first steps toward a comprehensive new process for IT delivery. For a full list of DoD IT reform actions already undertaken and planned (taken from the report), click here. New reforms will be implemented incrementally and could require Congress to change elements of U.S. code. The report identifies five guiding principles: Deliver fast and often; incremental and iterative development and testing; rationalized requirements; and flexible/tailored processes.

Getting there will require changing the way the Pentagon funds IT projects, the report notes. It discusses three possible specialized IT alternatives to the Planning, Programming, Budgeting and Execution process that otherwise controls how the department allocates resources.

Namely:

• A single appropriation for all IT

IT programs today draw money from three appropriations buckets--research and development, procurement and operations and maintenance. Each bucket comes with different rules and definitions meant to align funding with the traditional weapon system model. Were the Pentagon to get approval for a single IT appropriations, it would be able to select a materiel solution just prior to project initiation with risk of the two-year lag typical to the current approach, the report says. With a single IT appropriation the department would have additional flexibility, it adds.

• An IT revolving fund

Under this option, the DoD would establish a revolving fund similar to the National Defense Sealift Fund, in which funds are put into a non-expiring account. One possibility for managing such a fund would be to have money deposited into the account and then authorized for spending through a series of internal controls that include congressional notification based on defined dollar thresholds of the planned procurement, the report says.

• Flexibility to realign funding

Under this concept, the Pentagon would gain sufficient authority to realign funding to proposed projects. It would fund multiple "time-boxed," overlapping projects in accordance with an approved roadmap. Funding for a combination of smaller interrelated IT projects would be best done through a single funding element, but it would define desired IT capabilities rather than individual programs, as is typical today, the report says.

The report also calls for a new governance approach for IT that would eliminate the traditional milestone phases of the DoD 5000 directive in favor more frequent decisions. Also, the department has under development a set of acquisition templates with tailored milestone periods for different kinds of IT projects. Types of projects deemed unique enough so far to merit a template include application software development and integration; commercial-off-the-shelf hardware and software procurement; integrated COTS/government-off-the-shelf capability; and commercially provided IT services, the report says.

An early example of the template approach has been institutionalization of the Business Capability Lifecycle methodology for business systems, it adds.

Part of the new IT governance approach will be periodic reviews of related projects, i.e., a "portfolio" review, the report adds. Already the office of Acquisition, Technology & Logistics has portfolio responsibility for weapons systems; the DoD chief information officer has responsibility for infrastructure, communications, and command and control systems; while the deputy chief management officer has portfolio oversight of business systems, the report says.

The department will shift away from the waterfall engineering process in favor of newer practices such as test-driven development, model-driven development and feature-driven developments, the report adds. Creation of a common IT infrastructure with non-proprietary interfaces will enable agile development, it states.

The report also touts an already-implemented change to the Joint Capabilities Integration and Development Systems known as "IT Box." Under it, defense officials can describe the "operational performance and life-cycle affordability bounds" of a IT project in the program capability development document required by the JCIDS process. The boundaries imposed by the IT Box make return trips to the Joint Requirements Oversight Council for change approvals less likely, the report says. A new acquisition process will extend the IT Box from the program to a portfolio level, so multiple projects can derive authority from a single capability development document, the report adds.

Although the report doesn't mention it, the Office of Management and Budget recently came out with a 25-point plan for IT reform. The two plans don't appear to conflict, although the emphasis of the OMB plan--with its stress on cloud computing and data--differs markedly from the DoD plan, which appears to concentrate more on acquisition and process.

For more:
- download the report, "A New Approach for Delivering Information Technology Capabilities in the Department of Defense" (.pdf)
- see a visualization of the most common words in the New Approach plan

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