Requirements Executive Overview Workshop

Report
ASMC – Middle Georgia Chapter
9 Feb 2012 Luncheon
Planning, Programming, Budgeting, and
Execution (PPBE) Update
Julian “Rob” Roberts
Professor of Financial Management
Defense Acquisition University – South Region
Huntsville, AL
[email protected]
256-922-8041
Outline
• PPBE Process and Schedule
– Changes and updated terms
• “Will Cost” vs “Should Cost”
2
Resource Management System
PPBE is the Primary Resource
Management System for DoD:
• Articulates strategy
• Identifies size, structure and equipment
for military forces
• Sets programming priorities
• Allocates resources
• Evaluates actual output against planned
performance and adjusts resources as
appropriate
3
PPBE Phases
• Planning (OSD Policy)
– Assess capabilities / review threat
– Develop guidance
• Programming (OSD CAPE)
– Turn guidance into achievable, affordable packages
– Five-year program (Future Years Defense Program)
• Budgeting (OSD Comptroller)
– Test for efficient funds execution
– Scrub budget year
– Prepare defensible budget
• Execution Review (concurrent with program/budget review)
– Develop performance metrics
– Assess actual output against planned performance
– Adjust resources to achieve desired performance goals
4
4 Major Changes in the FY 12-16 PPBE Cycle
DepSecDef memo, dated 9 Apr 10
• DPPG (was GDF and JPG; now DPG for FY 13-17)
• One budget year (was two on the “on years”)
– Makes this an annual budget cycle vs a biennial budget
• Focus on a 5-year period
– Changed FY12-17 period to FY 12-16
• DOD conducting Front End Assessments
– Eight issues with SecDef oversight via the “Large Group”
– All other issues led by DepSecDef via the DAWG (now DMAG)
NOTE: FY 13-17 PPBE Cycle has six issues
5
Front End Assessments
SecDef memo, dated 31 Mar 11
•
•
•
•
•
•
Security Force Assistance
Institutionalize UAVs
Family Programs and Mental Healthcare
Anti-Access / Area Denial
Research and Development
Cyber Capabilities
6
PPBE – Planning Phase
APR/SEP
FEB/MAR
President
National Security Council
CIA/DIA/JCS/OSD
Planning Phase focus:
NSS
• Threat vs. Capabilities
• Update strategy
• Guidance for programming &
budgeting
CIA – Central Intelligence Agency
COCOM – Combatant Commander
CPR – Chairman’s Program Recommendation
D, CAPE – Director, Cost Assessment & Program Eval
DIA – Defense Intelligence Agency
DPPG – Defense Planning & Programming Guidance
FEAs – Front End Assessments
JCS – Joint Chiefs of Staff
NDS – National Defense Strategy
NMS – National Military Strategy
NSS – National Security Strategy
OSD – Office of the Secretary of Defense
QDR – Quadrennial Defense Review
USD(P) – Undersecretary of Defense (Policy)
VCJCS – Vice Chairman, Joint Chiefs of Staff
Every
4 Years
OSD
Level
JCS
Level
(JCS,
COCOMs,
SERVICES)
NDS
QDR
FEAs
D, CAPE/VCJCS/
USD(P)
DPPG
To DoD “Large
Group”/Integrated
Program/Budget
Submission &
Review
DPG for FY13-17 cycle
NMS
CPR
PPBE
Integrated Program/Budget Review
JUL
DoD
“Large Group”
FEAs
OSD/
CAPE
Issue
Resolution
JCS
Components/
Defense
Agencies
BES
3-Star Group
SECDEF/DEPSECDEF
SLRG & DMAG
POM
DEC
NOV
OCT
CPA
CPMs
Program Review focus:
• Compliance with DPPG
JAN/FEB
BES – Budget Estimate Submission
CAPE – Cost Assessment & Prgm Evaluation
COCOM – Combatant Commander
CPA – Chairman’s Program Assessment
CPM – Capability Portfolio Manager
DMAG – Deputy’s Management Action Group
FYDP – Future Years Defense Program
MBI – Major Budget Issues
OMB – Office of Management and Budget
PB – President’s Budget
POM – Program Objectives Memorandum
RMD – Resource Management Decision
SLRG – Senior Leader Review Group
RMDs
USD(C)/
OMB
Adv Questions/
OSD/OMB Budget Hearings
MBI
PB
FYDP
Update
FYDP
Update
Services / PEO / PM
Answer / Reclama
Budget Review focus:
- Pricing
- Phasing
- Funding policies - Budget execution
“Will Cost” vs “Should Cost”
USD (AT&L) and USD(C) 22 Apr 11 Memo
• Will Cost
• Used for programming and budgeting
•
•
•
Used for acquisition program baselines (APBs)
Used for all reporting requirements external to DoD
Should Cost
• Scrutinize every element of govt and contractor costs
•
3 ways to develop should cost estimates:
• Bottoms –Up estimate
• Determine specific discrete and measurable items
• Use competitive contracting and contract negotiations to identify
should cost savings (old FAR definition)
• Model Programs
• Air Force : JSF, Global Hawk, SBIRS, EELV, AEHF
• Army: Joint Air Ground Missile, UH-60M, GCV, Paladin Product
Improvement (PIP), NETT Warrior
• Navy: JSF, E-2D, Presidential Helo, LCS, Ohio Replacement Program
9
Air Force
Implementation of Will-Cost & Should-Cost Mgt
SAF/FM and SAF/AQ - 15 Jun 11 Memo
• Applies to ALL ACATs (ACAT I, II and III); required at all milestone
decisions and annually
• “Non-advocate Will Cost-Estimates”
– Previously, specific requirements for these estimates for ACAT I programs only
– Now, same requirements (“same level of rigor”) will also apply to ACAT II and III
– Aims to provide sufficient resources to execute the program under normal
conditions, encountering average levels of technical, schedule, and programmatic
risk (usually no less than the mean confidence level, typically between 55-65%)
– “Used as basis for all budgeting and programming decisions”
– “Basis for all metrics and reporting external to the department”
– Shall be approved by office/entity outside of program office chain-of-command
(AKA “ICE”)
10
Air Force
Implementation of Will-Cost & Should-Cost Mgt
SAF/FM and SAF/AQ - 15 Jun 11 Memo
• “PMs must begin to drive leanness into their programs by
establishing Should-Cost estimates at major milestones”
– Designed to drive productivity improvements
– Used as an internal management tool to incentivize performance to targets
– Based on realistic technical and schedule baselines and assumes successoriented outcomes from implementation of efficiencies, lessons learned, and best
practices
– At a minimum, PMs are expected to identify specific discrete measurable items or
initiatives that achieve savings against the Will-Cost estimate
– ACAT I, II & III programs on the Acquisition Master List will present Should-Cost
estimates at their next major milestone
• Difference between Will Cost (budget) and Should Cost will be held at
Service level (initially for the five pilot programs only)
– PMs to brief execution with respect to Should Cost at Spring Program Review
(SPR) and Investment Budget Review (IBR)
– PM requests release of “difference” at these reviews
– Funds released via joint decision by SAF/AQ and SAF/FM (SAF/AQX and SAF/FMB
for ACAT II and III)
11
Questions?
12

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