Department of Defense Acquisition Reorganization Act of 1988

Department of Defense Acquisition Reorganization Act of 1988 - Requires the Under Secretary of Defense for Acquisition, in planning for the acquisition of a weapon system, to: (1) consult with the Secretaries of the military departments and heads of appropriate defense agencies with regard to the need for such system; (2) have final decisionmaking authority for the research to be conducted for such system and for the system to be acquired for the Department of Defense (DOD); (3) carry out functions relating to the research and production of such system; and (4) be the sole DOD representative in negotiating with private sector representatives in the acquisition of such system.

Requires the Under Secretary to determine funding priorities for the acquisition of such systems and to submit to the Secretary of Defense a proposed appropriation request reflecting such priorities.

Establishes within DOD a Defense Acquisition Agency (DAA) to be headed by the Under Secretary. Specifies that the Under Secretary shall conduct weapon system acquisition through such agency.

Directs the Secretary to establish by regulations a personnel system for civilian personnel within DAA. Outlines information to be included in such regulations. Allows the Secretary to exempt civilian personnel from any otherwise applicable competitive service requirements. Requires the Secretary to make appointments to DAA from the best-qualified civilian applicants.

Authorizes the Secretary to establish a merit pay system for employees of DAA as the Secretary deems appropriate. Provides for the assignment of DAA employees.

Provides that members of the armed forces may be detailed to DAA.

Terminates the procurement authority of the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force.

Directs the Secretary of each military department and the head of each defense agency to determine the procurement needs of such department or agency and report such needs to the Under Secretary. Provides that such procurement needs may not be revised by the Secretary or Under Secretary.

Directs the Under Secretary to review each major defense acquisition program before such program proceeds into the stages of: (1) concept exploration; (2) demonstration and validation; (3) full-scale development; and (4) production. Sets forth evaluations to be included in each review. Prohibits funds from being obligated or expended with respect to a stage of such program unless the Under Secretary has approved the program for such stage.

Revises a provision regarding contracts for energy for military installations to eliminate the requirement for the Secretary's approval of such contracts.