SECRETARY OF DEFENSE 1000 DEFENSE PENTAGON WASHINGTON. DC 20301-1000 FEB 1 7 2017 MEMORANDUM FOR DEPUTY SECRETARY OF DEFENSE SUBJECT: Near-Term Actions Required Pursuant to the National Defense Authorization Act for Fiscal Year 2017 and its Accompanying Conference Report The provisions and intent of Title IX of the National Defense Authorization Act (N DAA) for FY 2017 represent a landmark opportunity for the Department to ensure that we have the optimal structures and processes in place to serve as effective stewards of resources and to develop and support a military force that fully meets our nation?s security needs now and in the future. I am ?rmly committed to addressing Congressional concerns in a timely manner and aggressively exploring and implementing reforms that best position the Of?ce of the Secretary of Defense and the Department for success. Accordingly, please lead an accelerated and fully transparent effort, incorporating all stakeholder equities and subject matter expert perspectives, to address the following reforms: 0 Develop an implementation plan, consistent with section 901 of the NDAA for FY 2017, that embraces the establishment of the Under Secretary of Defense (USD) for Research and Engineering and the USD for Acquisition and Support disestablishes the USD for Acquisition, Technology, and Logistics; and reallocates and realigns related substructures and ?mctions. These organizational changes should be utilized to improve the Department?s ability to be innovative and responsive. Additionally, the plan should include a recommendation on the designation of a Chief Innovation Officer, options for the treatment of innovation organizations, and enable the Department to provide agile and rapid acquisition capabilities. I Consistent with direction in section 901 of the NDAA for FY 2017 NDAA, consider options for an improved Chief Management Of?cer (CMO) function, develop alternatives, with speci?ed responsibilities, functions, authorities, and structures, for the establishment of a CMO. In addition, consider Options for the establishment of an USD for Management in lieu of a CMO, which would require a change to existing law. Provide appropriate legislative change proposals to accompany all alternatives. 0 Develop an initial plan, consistent with section 902 of the NDAA for FY 2017 and its accompanying Conference Report, for more optimized organizational structure and processes to support information management and cyber operations, considering the impact of the provisions in the NDAA for 2017 concerning the establishment of US. ll ll Hill 563-1 D002292-17 The manner in which we pursue and implement these reforms must earn the trust and con?dence of Congress and US. taxpayers, as well as the men and women of the Department. I expect Department leadership to engage Congress proactively, where appropriate. These efforts must result in structures and processes that are fully integrated and mutually reinforcing while providing the capability to deliver the Departmental organizational reforms required over the next 18 months. In order to meet the statutory suspense of March 1, 2017 for the interim report to Congress required by section 901(i) of the NDAA for FY 2017, and to inform the imminent nomination process for candidates for affected positions, please submit all of the above and the interim report to me by February 27, 2017. an Secretaries of the Military Departments Chairman of the Joint Chiefs of Staff Under Secretaries of Defense Deputy Chief Management Of?cer Chief, National Guard Bureau General Counsel of the Department of Defense Director of Cost Assessment and Program Evaluation Inspector General of the Department of Defense Director of Operational Test and Evaluation Chief Information Of?cer of the Department of Defense Assistant Secretary of Defense for Legislative Affairs Assistant to the Secretary of Defense for Public Affairs Director of Net Assessment Director, Strategic Capabilities Of?ce Directors of Defense Agencies Directors of Field Activities Special Assistant for White House Liaison