1. Points of contact selected by heads
of DoD Components shall develop internal policy and procedures to implement
this Directive and shall coordinate production management activities.
2. Emphasis shall be placed on
application of fundamental engineering principles and relevant technical
disciplines during development and production. Assessment of production risks
shall be made throughout the acquisition process. These assessments shall be
formalized through industrial resource analyses (IRAS) and production
readiness reviews (PRRs). Risks shall be reduced to acceptable levels in
accordance with DoD Directive 4245.7 (reference (c)).
3. A manufacturing strategy shall be
developed as part of the program acquisition strategy. Manufacturing voids,
deficiencies, and dependencies on critical foreign source materials shall be
addressed concurrently with concept demonstration and validation through the
use of manufacturing technology projects (DoD Instruction 4200.15, reference (d)), or other means. The
producibility of each system design concept shall be evaluated at the
full-scale development (FSD) decision point to determine if the proposed
system can be manufactured in compliance with the production cost and
industrial base goals and thresholds.
4. Contractor past performance (to the
extent that it has a bearing on the concept involved), production management
capability, quality history, and the potential to execute the production
program shall be among those factors included in the contractual solicitations
and evaluated thereafter in the source selections.
5. A comprehensive praducibility
engineering and planning (PEP) program is a requisite for entering FSD. PEP
programs shall be conducted throughout FSD and shall contain specific tasks,
measurable goals, and a system of contractor accountability.
6 . A quality gkogram in accordance
with DoD Directive 4155.1 (reference (e)) shall be conducted
throughout acquisition and deployment. Industrial preparedness planning shall
be integrated effectively with production management and production planning
under DoD Directive 4005.1 (reference (f)). Determinations of
priorities and allocations shall be within the framework of DoD Component
delegation of authority, consistent with DoD Instruction4400.1 (reference (g)).
7 . The Office of the Under Secretary
of Defense for Research and Engineering (OUSDR&E) shall maintain
visibility of production management matters throughout the acquisition process
for all major programs. Production decisions under consideration at a Defense
Systems Acquisition Review Council (DSARC) or OSD program review shall be
supported by an independent OSD assessment of production readiness in addition
to an evaluation of the findings of a formal PRR. PRRs shall be planned and
conducted by the DoD Components in accordance with DoD Instruction 5000.38 (reference (h)) to confirm:
a. The stability and producibility of the design.
b. Progress toward meeting
reliability and maintainability characteristics.
c. The adequacy of supporting
d. The refinement of
manufacturing methods, techniques, and processes.
e. The suitability of manufacturing,
cost, and quality assurance control
An acquisition may not proceed into
produttion until it is determined
that the principal contractors have the
physical, financial, and managerial capacity to meet the cost and schedule commitments of
the proposed procurement. An assessment shall be made of the contractors'
capabilities to meet surge (peacetime) and
mobilization (declared national emergency) requirements and their commitments to participate in the DoD industrial
preparedness production planning program
under DoD Directive 4005.1 (reference (f)).
9. Competition, value engineering, tailoring of
specifications and standards, design-to-cost, cost benefit and trade-off assessments,
preplanned product improvements,
multiyear-procurement, industrial modernization incentives, and other techniques shall be used, as appropriate, to
reduce production, operating, and support
costs. Standardization, commonality, and interchangeability shall be promoted throughout the acquisition cycle to
reduce lead time and life-cycle
10. Technical data packages shall be
developed and proven by means of production demonstration and configuration audit, consistent with
competition, component breakout, and
11. Continued emphasis shall be placed on life-cycle cost reduction during
the production phase through the use
o f contractual incentives and other means.
12. Production management planning and implementation shall
include provisions for measuring progress
in meeting design-to-cost and life-cycle cost commitments.
13. Selection of contracts and subcontracts requiring contractor cost
and schedule management systems to comply
with the DoD Cost/Schedule Control Systems criteria shall be made in accordance with DoD Instruction
7000.2 (reference (i)). When a contractor or subcontractor is not required to
comply with the criteria, the Cost
Schedule Status Report approach to performance measurement set forth
in DoD Instruction 7000.10 (reference (j)) normally shall be
14. Production engineering and management shall include those actions that are
required to maintain a capability to produce materiel for the operation and
maintenance of equipment after the production phase is complete.
The planning for these post-production activities shall start during the
15. Program Milestone Reviews. Production management shall be addressed
specifically at each program milestone decision point in the major system
acquisition process in accordance with DoD Instruction 5000.2 (reference (k)).
I - Demonstration and Validation. Production
feasibility of candidate system concepts
shall be addressed and areas of
production risk defined. Manufacturing
technology needed to reduce production risk to acceptable levels shall be identified. Preliminary goals
and thresholds for production cost shall
be formulated. Preliminary goals and thresholds for industrial base capability shall be formulated based on an
II - FSD. The producibility
of the design approach shall
be confirmed and production risk
determined acceptable. The FSD phase shall include provisions to attain producibility of the
production design using cost-effective
manufacturing methods and processes. Resource requirements for PEP, long-lead
procurements, critical materials, labor skills, facilities, equipment, and limited production shall be identified
and programed. The capability to meet
production unit cost, schedule, and surge requirements shall be confirmed at the prime and key subcontract
c . Milestone III - Production and Deployment. Production
decisions shall be supported by an
assessment of the program readiness for production, based on a formal PRR. The PRR shall include assessing the results of
manufacturing technology activities.
Plans and provisions for accomplishing cost reduction during production shall be