A surgical instrument assembly configurable for performing a dermatotomy in a percutaneous procedure and further configurable for performing cuts in open surgery includes a pointed scalpel blade and a hollow sheath body disposed to encapsulate the pointed scalpel blade inside a longitudinal instrument cavity to protect a user. The hollow sheath body is supported for longitudinal translation with respect to the scalpel blade. The hollow sheath may be positioned and locked at a first position to completely encapsulate the scalpel blade inside the instrument cavity for safe handling. The hollow sheath body is movable to second and third positions with different lengths of the surgical instrument extending out through a front face of the hollow sheath body. A compression spring biases the hollow sheath body toward the first safety position.