Portfolio Acquisition Executives (PAEs)

USW(A&S) will:

Working with the Military Departments (and other Components with acquisition portfolios, as directed), establish PAEs by transforming and reorganizing existing Program Executive Offices with a governance structure that prioritizes speed. Within 30 days, each Component will nominate initial portfolios for establishment.

Within 60 days, each Component shall submit their complete transformation plan transitioning all major acquisition activities to PAE portfolios within two years. The Military Services shall establish PAEs, delegating authority and flattening chains of command to prioritize speed. The acquisition chain of authority will flow from the Defense Acquisition Executive (DAE) to the Service Acquisition Executives (SAEs) to the PAEs.

The PAE structure shall preserve the statutory authority of the SAEs for all Military Service-managed programs and portfolios. The Military Services, through their SAEs, will establish PAEs as the single accountable official for portfolio outcomes with authority to:

1. Structure programs as schedule-driven capability increments with aggressive production delivery schedules, unit-cost ceiling goals, and broad mission effectiveness goals. Make trade-offs throughout the development to permit iterative enhancement and rapid delivery of subsequent increments. Make prudent cost, schedule, and performance trades that prioritize time-to-field, including execution of portfolio-level programming within defined and authorized boundaries.
2. Implement capability trade councils, replacing configuration steering boards, to integrate operational and acquisition authorities and make requirement trade-offs, and waive technical standards and other certification requirements not mandated by statute or safety.
3. Maximize use of Modular Open System Architectures (MOSA) for development programs moving forward by obtaining delivery of critical system interfaces with government purpose rights enable modular competition and supply chain resiliency.
4. Organizationally align contracting officers to report directly to PAEs in the acquisition chain of command, to maintain responsiveness to the operational problems that materiel solutions are intended to address.

Source: Memo

Portfolio Acquisition Executives: Empower our program leaders with control of a full team of subject matter experts and the authority to direct program outcomes, move money, and quickly adjust system features to deliver on time and under budget.

The Department must establish new paradigms for acquisition and pivot from program and platform-centric structures, processes, and strategies to deliver integrated suites of capabilities across platforms and systems. The Department will adopt a phased approach to scale portfolio practices, resources, and authorities, enabling greater speed and flexibility within portfolios and maximizing efficiencies and mission impact. This includes working with the Military Services to identify how PEOs can be realigned to serve as PAEs), such as the potential consolidation of PEOs addressing related products or segments of kill chains to ensure more cohesive planning and decision-making across the Military Services. This will create a balanced management and oversight construct focusing on two dimensions: (1) delivery of the platforms, weapons, and systems (delivery of things); and (2) integration and interoperability between systems to deliver system-of-systems architectures and warfighting capabilities (connection between things).

The PAEs will operate with expanded authorities for resourcing, requirements, and acquisition decisions within prescribed portfolios, allowing for more rapid trades and priority shifts within assigned portfolios. The portfolios the PAEs oversee will likely be related systems that integrate to deliver capabilities across programs and will be structured and bounded within a Military Department or Defense Agency. The requirement to look across  Military Departments and Defense Agencies at the various portfolios and programs necessary to close kill chains will be met by the DOW’s CPM processes using mission engineering.

The USW(A&S) will identify PAE portfolio candidates to pilot implementation, in coordination with the Military Services, to begin execution immediately. Initial PAEs will be focused on portfolios that require significant integration across platforms, systems, weapons, and grouping of like-capabilities. While establishing initial PAEs, the Department will right-size the authorities, structure, and operation of PAEs across the Military Departments.

The Department will empower PAEs with additional flexibilities in resourcing and requirements through budget consolidation and portfolio-level requirements. The USW(A&S) will partner with the USW(Comptroller) to implement Planning, Programming, Budgeting, and Execution (PPBE) reform efforts and explore options to empower PAEs to flexibly apply funding to emergent needs while maintaining maximum transparency with OMB and the U. S. Congress. The Military Departments, the Joint Staff, and the USW(A&S) will collaborate to prepare a playbook on developing portfolio-level requirements documents aligned to operational outcomes instead of system-specific technical requirements.

Finally, the Department will ensure PAEs are empowered to manage their portfolio and deliver results through direct supervisory authority over professionals across critical disciplines, including acquisition, contracting, testing, and systems engineering. The OUSW(A&S) will establish accountability measures of merit that prioritize outcomes rather than activity across the acquisition enterprise. This will be addressed more extensively in the Acquisition Workforce Transformation Plan, prepared and delivered separately.