Performance of the

Air Force Acquisition System

FY2014 Annual Report Executive Summary

Published: December 2014
SAF/AQX

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This assessment has been produced in accordance with Section 861 of the National Defense
Authorization Act for Fiscal Year 2011, Public Law 111-383

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Chief Process Officer Assessment

With the exception of Schedule Performance, the current state of AF Acquisition can generally be
described as in a period of program execution stabilization with improvements observed in pockets of
enabling functions. Cost performance and technical performance remained relatively stable in FY14,
while schedule performance continued to struggle. Both workforce certifications and some areas of
contracting performance displayed improvement. Below is my executive summary:

Cost Performance trends have stabilized with indicators of resistance to continued improvement.
The ACAT I MDAP/MAIS portfolio acquisition cost estimate was reduced by $229 Million (Constant
Year 12 $s) in FY14 with fifteen of the 29 Active ACAT I MDAP/MAIS programs reporting acquisition
cost estimate reductions. The majority of the AF ACAT I MDAP/MAIS programs are forecasting
acquisition program cost and unit cost estimates below their Current APB Objectives. Program
Acquisition Unit Costs (PAUC) reversed a three year improvement trend with the average program
PAUC variance increasing from -4.08% to -3.82% in FY14 with an average change to PAUC estimates
of .25%. APUC variance continued improvement with the average APUC variance improving from
-5.30% to -5.90% with an average change to APUC estimates of -.70%. The ACAT II Portfolio added
$1042M in CY12 $s primarily attributed to two programs increasing their quantity buys. The
average program variance for the ACAT II Portfolio improved for both PAUC (18 Programs) and APUC
(19 Programs) in FY14, however the ACAT II PAUC estimates grew by an average of .21%.

Schedule Performance remains challenged. An additional 112 cumulative months of schedule was
added to Active ACAT Is Portfolio for the 29 programs that consistently reported DAEs updates in
FY14. Improvement is observed in schedule achievement due to several programs accomplishing
their predetermined milestones; however approximately half of the ACAT Is are estimating their
next APB milestone objective will be missed by 3 months or less and one third of AF ACAT I
MDAP/MAIS programs are estimating they will miss their upcoming milestone objective by six
months or more. The active ACAT I MDAP average cycle time from Milestone B to C is 81 months
and MS B to Initial Operating Capability (IOC) is 103 months. The ACAT II portfolio only added 18
months of schedule for the 30 programs observed, however Schedule Achievement declined from
79% to 50% when measuring the percentage of programs estimating their upcoming objective will
be within 3 months or less. The active ACAT II average cycle time from Milestone B to C is 40
months and MS B to Initial Operating Capability (IOC) is 89 months.

Technical Performance trends remain stable. Currently, all (unclassified) AF ACAT I programs with
future IOC milestones are projecting their Key Performance Parameters (KPPs) will be met between
the threshold and objective trade-space. Additionally, during FY14 no changes to KPP requirements
were identified for unclassified ACAT I programs approved at an Air Force Requirement Oversight
Council (AFROC) from 2009 forward.

Product Support Logistics are in compliance with U.S.C Statutes. The Air Force is currently in
compliance with both the Limitation on the Performance of Depot-Level Maintenance of Materiel
(10 U.S.C 2466 50-50 Rule) and the Core Logistics Capabilities (10 USC 2464).

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Contracting Performance trends have improved. Improvement is specifically evident in the areas of
Actual Competition Rates, GAO Protest Sustainments and Small Business Obligations. UCA
Performance trends are mixed as UCA numbers declined while the average definitization time
increased. The percentage of Effective Competitions nominally declined from 85.4% to 85% and
UCA Contracting Cycle Times increased.

Workforce certification trends continued to improve. Acquisition workforce professional

certifications trends improved over the year for both Level II and Level III certifications. Compliance
with Key Leadership Position incumbency requirements declined nominally from 89% to 88%. 96%
of the AF acquisition workforce is meeting their professional currency standards which is evidence
that acquisition workforce continues to actively seek professional development opportunities to
improve job performance.

Monthly Acquisition Report (MAR) Assessments have improved for the Enterprise and ACAT Is.
The percentage of ACAT I programs assessed green is 64% compared to 54% in FY13. While the
ACAT I MAR Assessments trend has improved, the ACAT II portfolio MAR Assessments is showing
signs of decline, degrading from 81% to 70% in FY14.

Mixed Results are observed for Defense Contract Management Agency (DCMA) Program
Assessment Reports (PARs) assessments. Assessments of Management have improved, Contract
Performance results are mixed and Green Production assessments declined 12%. The decline in
Production assessments should be monitored for further degradation in FY15.

Four Overarching Themes for improvement and/or congressional assistance can be attained from
US Senate Report: Acquisition Reform: Where Do We Go From Here? A Compendium of View by
Leading Experts. The themes were: (1) Improving incentives for the acquisition workforce; (2)
Training and recruitment of the acquisition workforce must be improved, (3) DoD needs to realism
in program requirements and budgets at the start of programs; and (4) Need for strong leadership
and accountability throughout the life-cycle of weapon system with further integration of the
Service Chiefs into the acquisition process.

Robert D. Pollock
Chief Process Officer &
Director Acquisition Excellence & Change Office
Deputy Assistant Secretary of the AF (Acq. Integration)

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