ENCLOSURE 3

ACQUISITION CATEGORY (ACAT) AND
MILESTONE DECISION AUTHORITY (MDA)

1.  GENERAL

     a.  A technology project or acquisition program shall be categorized based on its location in the acquisition process, dollar value, and MDA special interest. Table 1 contains the description and decision authority for ACAT I through III programs. When the ICD demonstrates a need for a materiel solution, the DoD Component sponsor shall assess the potential level of investment and plan a Materiel Development Decision review with the appropriate decision authority. The Defense Acquisition Executive (DAE) or designee shall review potential ACAT I and IA materiel solutions; the CAE or the individual designated by the CAE shall review potential ACAT II and III materiel solutions.

     b. The DoD Component shall notify the USD(AT&L) when an increase in program cost or a change in acquisition strategy results in reclassifying a formerly lower ACAT program as an ACAT I or IA program. ACAT-level changes shall be reported as soon as the DoD Component anticipates that the program is within 10 percent of the next ACAT level. ACAT-level reclassification shall occur upon designation by the USD(AT&L).

(1) The CAE may request a reclassification of an ACAT I or IA program to a lower ACAT, consistent with Table 1. The request shall identify the reasons for the reduction in category. The category reduction shall become effective upon approval of the request by the USD(AT&L) or the ASD(NII)/DoD CIO when designated by the USD(AT&L).

(2) The USD(AT&L) may reclassify an acquisition program at any time.

2.  TECHNOLOGY PROJECTS. Joint Experimentation, Defense Advanced Research Projects Agency projects, the Technology Transition Incentive Program, SBIR and Small Business Technology Transfer Programs, the Joint Integration & Interoperability Program, Joint Capability Technology Demonstrations, the Coalition Warfare Program, the Quick Reaction Special Projects/Rapid Reaction Fund, Foreign Comparative Testing, the Defense Acquisition Challenge Program, the Joint Test & Evaluation Program, the Joint Improvised Explosive Devices Defeat Office, the Rapid Reaction Technologies Office, and Defense Biometrics are some of the activities that facilitate and provide early joint technology and capability definition, development, experimentation, refinement, testing, and transition. The USD(AT&L) shall be the MDA for those projects that, if successful, will likely result in an MDAP or MAIS program unless the USD(AT&L) delegates milestone decision authority for a MAIS program.

Table 1. Description and Decision Authority for ACAT I – III Programs.

Acquisition Category	Reason for ACAT Designation	Decision Authority
ACAT I	•  MDAP (section 2430 of Reference (k))    o  Dollar value: estimated by the USD(AT&L) to require an eventual total expenditure for research, development, test and evaluation (RDT&E) of more than $365 million in fiscal year (FY) 2000 constant dollars or, for procurement, of more than $2.190 billion in FY 2000 constant dollars    o  MDA designation •  MDA designation as special interest	ACAT ID: USD(AT&L) ACAT IC: Head of the DoD Component or, if delegated, the CAE (not further delegable)
ACAT IA1,2	•  MAIS (Chapter 144A of title 10 of U.S.C. (Reference (k))): A DoD acquisition program for an Automated Information System3 (either as a product or a service) that is either:    o  Designated by the MDA as a MAIS; or    o  Estimated to exceed:        *  $32 million in FY 2000 constant dollars for all expenditures, for all increments, regardless of the appropriation or fund source, directly related to the AIS definition, design, development, and deployment, and incurred in any single fiscal year; or        *  $126 million in FY 2000 constant dollars for all expenditures, for all increments, regardless of the appropriation or fund source, directly related to the AIS definition, design, development, and deployment, and incurred from the beginning of the Materiel Solution Analysis Phase through deployment at all sites; or        *  $378 million in FY 2000 constant dollars for all expenditures, for all increments, regardless of the appropriation or fund source, directly related to the AIS definition, design, development, deployment, operations and maintenance, and incurred from the beginning of the Materiel Solution Analysis Phase through sustainment for the estimated useful life of the system. •  MDA designation as special interest	ACAT IAM: USD(AT&L) or designee ACAT IAC: Head of the DoD Component or, if delegated, the CAE (not further delegable)
ACAT II	• Does not meet criteria for ACAT I • Major system o Dollar value: estimated by the DoD Component Head to require an eventual total expenditure for RDT&E of more than $140 million in FY 2000 constant dollars, or for procurement of more than $660 million in FY 2000 constant dollars (section 2302d of Reference (k)) o MDA designation4 (paragraph (5) of section 2302 of Reference (k))	CAE or the individual designated by the CAE4
ACAT III	• Does not meet criteria for ACAT II or above • AIS that is not a MAIS	Designated by the CAE4
1.  In some cases, an ACAT IA program, as defined above, also meets the definition of an MDAP. The USD(AT&L) shall be the MDA for such programs unless delegated to a DoD Component. The statutory requirements that apply to MDAPs and MAIS shall apply to such programs. 2.  The MDA (either the USD(AT&L) or, if delegated, the ASD(NII)/DoD CIO or another designee) shall designate MAIS programs as ACAT IAM or ACAT IAC. MAIS programs shall not be designated as ACAT II. 3.  Automated Information System: A system of computer hardware, computer software, data or telecommunications that performs functions such as collecting, processing, storing, transmitting, and displaying information. Excluded are computer resources, both hardware and software, that are:     a.  an integral part of a weapon or weapon system;     b.  used for highly sensitive classified programs (as determined by the Secretary of Defense);     c.  used for other highly sensitive information technology programs (as determined by the ASD(NII)/DoD CIO); or     d.  determined by the USD(AT&L) or designee to be better overseen as a non-AIS program (e.g., a program with a low ratio of RDT&E funding to total program acquisition costs or that requires significant hardware development). 4.  As delegated by the Secretary of Defense or Secretary of the Military Department.