DOD’s push for innovative, agile purchasing codified in adaptive acquisition policy

The new 5000.01 directive implements cultural changes to DOD purchases. Officials call it "one of the most transformational changes to acquisition policy in decades."
Ellen Lord, DOD
Ellen Lord briefs the press about acquisition in regards to COVID-19, at the Pentagon, Washington, D.C., March 25, 2020. (DoD photo by Lisa Ferdinando)

The Department of Defense set its latest overarching goals for driving innovation and agility in its acquisition programs with the recent signing of a new policy directive.

The newly rewritten Directive 5000.01 is a high-level policy that aims to empower program managers, simplify acquisition policy and rely more on data-driven analysis. In short, the new policy’s main purpose is to speed up the DOD acquisition at a time it wants to rapidly modernize into a digital force.

The policy also implements the Adaptive Acquisition Framework, which includes new software purchasing pathways. The policy is related to but doesn’t directly reference the department’s push for a new “color of money” for software purchases. Acquisition leaders say it will lead to greater innovation and easier purchasing of advanced technology.

“Representing one of the most transformational changes to acquisition policy in decades, the DoDD 5000.01 re-write was part of a comprehensive redesign of the DoD 5000 Series acquisition policies, which were streamlined and modernized to empower program managers, facilitate flexibility and enhance our ability to deliver capability at the speed of relevance,” DOD said in a statement.


Color of Money

DOD continues to push for a new “color of money,” or budget activity (BA), for program managers to use when buying code. Having a new way to purchase software would allow the department to sidestep policies designed for purchasing things like tanks when purchasing software, which often slows down the process.

Ellen Lord, the Pentagon’s top acquisition official, previously said pilots are underway testing the idea and the DOD has support from Congress in authorizing a new BA, which it would need to fully scale the idea. The new color of money originally was suggested by the Defense Innovation Board.

“[Software acquisition] policy will reflect a substantial departure from the way of doing things in DOD,” Lord said in August.

The new software pathways that Directive 5000.01 initiates are a start for the DOD, Lord said. They give program managers new tools and timelines to work with when buying code and open the doors for more collaboration between internal software factories, but are not the end of the DOD’s growth on software.


“While we are proud of the new software pathways, as an organization we need to continue to learn,” she said.

Culture shifts

Some of the cultural shifts the larger 5000.01 directive mandates include delegating more decision-making power to program managers and making more data-driven decisions. Leaders from Lord to the military’s No. 2 uniformed official Gen. John Hyten have said contracting authority needs to be distributed to lower-levels of command, especially for software.

“Creativity and critical thinking will guide acquisition business practice,” the policy states. “Acquisition professionals will seek, develop, and implement initiatives to streamline and improve the [Defense Acquisition System].”

To improve data-driven analysis for improving acquisition, the policy directs DOD to increase data transparency. The policy also directs DOD components to use data processing technologies like machine learning to “maximize efficiency” for programs.


“All DoD data will be shared as widely as possible across the Military Services and OSD,” the policy states.

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