PPBE

Report
Planning, Programming, Budgeting,
and Execution (PPBE)
Roberta Tomasini
Professor of Financial Management
Defense Acquisition University
[email protected]
703-805-3764
FM Scope: From Requirement to Capability
Life Cycle
Cost
Cost
Analysis
CAIV
POE
Annual
Funding
Estimate
ICE
Fiscal
Environment
Planning, Programming,
Budgeting and Execution
Funding Full
Funding
Policies(Exceptions)
CCA
FYDP
MFP
DPG POM
PE BES
RMD
SPR
Incremental
Funding
AoA
Congressional
Enactment
HAC
SAC
Budget
Resolution
HASC
SASC
HBC
SBC
President’s
Budget
Authorization
&
Appropriation
Laws
Acquisition
Program
Baseline
Operational
Concept
CapabilitiesBased
Assessment
Capability
Docs
Feedback
Commitment
Budget Authority
Obligation
Reprogramming
Expenditure
Budget
Execution
Outlay
Force Structure
Modernization
Operational Capability
Readiness
Sustainability
2
PPBE Outline
• Overview
• Better Buying Power Initiatives
• Building Blocks
– FYDP, MFP, Program Elements
• PPBE Process and Schedule
• Resource Allocation Process
3
Three Major DoD Management Systems
Planning,
Programming,
Budgeting and
Execution
QDR
Joint Capabilities
Integration and
Development
System (JCIDS)
What’s a “Program of Record”?
Defense
Acquisition
System
Where is it officially defined?
4
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
5
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
6
Better Buying Power Initiatives
USD(AT&L) 14 Sep 10 Memo
•
Target Affordability and Control Cost Growth
–
–
–
–
–
•
Incentivize Productivity and Innovation in Industry
–
–
–
–
–
•
Mandate affordability as a requirement
Drive productivity growth through Will Cost/Should Cost management
Eliminate redundancy within warfighter portfolios
Make production rates economical and hold them stable
Set shorter program timelines and manage to them
Reward contractors for successful supply chain and indirect expense management
Increase use of FPIF, where appropriate
• Use 50/50 share and 120% ceiling as point of departure
Adjust progress payments to incentivize performance
Extend the Navy’s preferred supplier program to a DoD-wide pilot
Reinvigorate industry’s IRAD and protect the defense technology base
Promote Real Competition
–
–
–
Present a competitive strategy at each program milestone
Remove obstacles to competition
• Require open systems architecture and set rules for acquisition of technical data
rights
Increase dynamic small business role in defense marketplace competition
7
Better Buying Power Initiatives(cont.)
USD(AT&L) 14 Sep 10 Memo
•
Improve Tradecraft in Services Acquisition
–
–
–
–
•
Create a senior manager for acquisition of services in each component, following the Air
Force’s example
Adopt uniform taxonomy for different types of services
Address causes of poor tradecraft in service acquisition
Increase small business participation in providing services
Reduce Non-Productive Processes and Bureaucracy
–
–
–
–
–
–
Reduce number of OSD level reviews…
Eliminate low-value added statutory processes
Reduce by half, the volume and cost of internal and congressional reports
Reduce non-value-added overhead imposed on industry
Align DCMA and DCAA processes to ensure work is complimentary
Increase use of Forward Pricing Rate Recommendations to reduce admin costs
8
“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
What Does Your Service Policy Memo Say?
9
Future Years Defense Program
(FYDP)
• Computer database maintained by CAPE
• Contains approved force structure and resources for
all Defense Programs
• Updated two times per annual PPBE cycle:
– Program Objectives Memorandum/Budget Estimate Submission
(POM/BES) – July
– President’s Budget (PB) - February
• Reflects PY, CY, BY, + 4 Out-Years
12
13
14
15 16 17 18
3 additional years for force structure only
What’s Your Latest Approved Numbers?
10
Future Years Defense Program
(FYDP)
DOD APPROPRIATIONS
D
E
F
MAJOR
FORCE
PROGRAMS
Strategic Forces
General Purpose Forces
(1)
Command, Control, Comm, Intell & Space
(3)
(2)
Research and Development
N
(4) A A
R V
(5)
M Y
(6) Y
Central Supply & Maintenance
(7)
Mobility Forces
Guard & Reserve Forces
A
I
R
A
G
E
F N
O C
R I
C E
E S
O
T
H
E
R
Training, Medical, & Other Personnel Activities (8)
Administration and Associated Activities
(9)
Support of Other Nations
(10)
Special Operations Forces
(11)
11
Program Elements
A - ARMY
PROGRAM ELEMENT (PE): Smallest aggregation of resources
normally controlled by OSD
•
•
N - NAVY
M - MARINE
- PE NUMBER: Used to track and identify resources; seven
digit number followed by an alphabetic suffix
F - AF
PROGRAM 2 ( GENERAL PURPOSE FORCES )
C - MDA
D - OSD
0203752A - Aircraft Engine CIP
E - DARPA
0204136N - F/A-18 Squadrons
J - JCS
0207163F - AMRAAM
S - DLA
PROGRAM 3 ( C3, INTEL & Space)
0303158A - Joint Command and Control Program (JC2)
BB - SOCOM
DBD - DFAS
0307207N - Aerial Common Sensor (ACS)
0305164F - NAVSTAR GPS (User Equipment)
Ref: DoD 7045.7 - H
12
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
DPG – Defense Planning Guidance
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
SPR – Strategic Portfolio 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
SPR
D, CAPE/VCJCS/
USD(P)
DPG *
* Note:
NMS
CPR
To DoD “Large
Group”/Integrated
Program/Budget
Submission &
Review
Guidance for POM/BES submission and
Integrated Program/Budget Review
DPG is the current name of this document but is
subject to change from one cycle to the next. Other names
used previously include Defense Planning & Programming
Guidance (DPPG) and Joint Programming Guidance (JPG).
PPBE – Integrated Program/Budget Review
JUL
SPR
OSD/
CAPE
Issue
Resolution
JCS
Components/
Defense
Agencies
BES
3-Star Group
SECDEF/DEPSECDEF
SLRG & DMAG
POM
DEC
NOV
OCT
DoD
“Large Group”
CPA
CPMs
Program Review focus:
• Compliance with DPG
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
FY 14–18 Program/Budget Review Schedule
Mar 12
Defense Planning Guidance (DPG) Issued
Mar 12
Fiscal Guidance Issued
May-Aug 12
Strategic Portfolio Review (SPR) Results
3 Aug 12
Component Program/Budget Submissions Due
30 Jul-10 Aug 12 Component POM Briefs to 3-Star/DMAG
31 Aug 12
Issue Nominations Due
4 Sep 12
Budget Justification Material Due to OSD/OMB
14 Sep 12
Issue Nomination Disposition
Sep-Oct 12
SPR Re-engagement
Sep - Nov 12
Program/Budget Review and Issue Team Analysis
21 Dec 12
Budget Lock
4 Feb 13
President’s Budget Submitted to Congress
15
Resource Allocation Process Overlap
CY12
CY13
CY14
J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
FY 12
Cycle
Execution
2nd Yr
3rd Yr
FY 12 and prior
FY 13
Cycle
Enactment
PB
FY 14
Cycle
FY 15
Cycle
FY 13
Planning
FY 14-18
DPG
2nd Yr
Execution
3rd Yr
FY 13 and prior
Program/Budgeting
FY 14-18 POM
FY 14 BES
PB
Planning
FY 15-19 DPG
FY 16
Cycle
2nd
Execution
Enactment
FY 14
FY 14 and prior
Program/Budgeting
FY 15-19 POM
FY 15 BES
Enactment
PB
FY 15
Exec
FY15 &
prior
Program/Budgeting
Planning
FY 16-20 DPG
FY 16-20 POM
FY 16 BES
DPG – Defense Planning Guidance
PB – President’s Budget
POM – Program Objectives Memorandum
BES – Budget Estimate Submission
BACKUP Charts
17
Most Probable Cost (MPC)
• AKA Most Likely Cost
• 50% chance of overrunning/underrunning on a normal
curve
• The Fin Mgt Reg (DoD 7000.14R) says budget to MPC
• 2006 DAPA Rpt: 80% confidence level (CL) recommended
• Air Force SAE (Mr. Van Buren) memo dated 17 Mar 10
says NLT mean (typically 55-65% CL) or “expected value”
• OSD CAIG using 50% CL
• WSARA 2009 Section 101
– DCAPE must issue guidance on confidence levels for cost
estimates for MDAP and MAIS programs
– FY11 Defense Authorization Bill revision
• MDAP and MAIS programs must disclose confidence level, and
• “ensure that such confidence level provides a high degree of
confidence that the program can be completed without the need for
significant adjustment to program budgets”
18
Capability Portfolio Managers
(CPMs)
• 9 Portfolios are Based on Existing Joint Capability
Area (JCA) Structure
• Civilian/Military Co-Leads Designated by
DEPSECDEF
• Have No Independent Decision Making Authority
• Afforded Access to JROC, DAB & Other Established
Component Forums
• Shall Establish or Identify Existing Portfolio-Level
Governance for Each Portfolio
19
Capability Portfolio Managers
(CPMs) Leadership
Capability Portfolio
and
Tier 1 JCA
CPM
Civilian
Lead
CPM
Military
Lead
Senior
Warfighting
Forum (SWarF)
Lead *
CPM
Joint
Staff
OPR *
Functional
Capability
Boards *
Command and Control
ASD (NII)
JFCOM
JFCOM
J-3
J-8
Battlespace Awareness
USD (I)
STRATCOM
STRATCOM
J-2
J-2
ASD (NII)
STRATCOM
STRATCOM
J-8
J-8
USD
(AT&L)
TRANSCOM
TRANSCOM
J-4
J-4
USD (P)
Director, J-5
JFCOM
N/A
J-5
USD
(AT&L)
Director, J-8
STRATCOM
N/A
J-8
USD (P&R)
Director, J-8
JFCOM
N/A
J-8
USD
Joint
Requirements
Oversight
Council (JROC)
JFCOM
SOCOM
STRATCOM
J-8
J-8
Director, Joint
Staff
N/A
N/A
N/A
Net Centric
Logistics
Building Partnerships
Protection
Force Support
Force Application
(AT&L)
USD (P)
Corporate Management &
Support
DCMO
* As designated by the Chairman of the Joint Chiefs of Staff (CJCS)
20
Senior Leader Review Group
• Secretary of Defense
• Deputy Secretary of Defense
• Secretary or Under Secretary of the Army
• Secretary or Under Secretary of the Navy
• Secretary or Under Secretary of Air Force
• Chairman Joint Chiefs of Staff
• Vice Chairman Joint Chiefs of Staff
• Under Secretary of Defense (AT&L)*
• Under Secretary of Defense (Policy)*
• Under Secretary of Defense (Comptroller)
/Chief Financial Officer*
• Under Secretary of Defense (Intelligence)*
• Under Secretary of Defense (P&R)*
• Commandant or Assistant Commandant
of the Marine Corps
• Director of Administration and Management
• Chief or Vice Chief of Staff of the Army
• Chief or Vice Chief of Naval Operations
•Chief of Staff or Vice Chief of the Air
Force
• General Counsel
• ASD (Legislative Affairs)
• ASD (Networks & Information
Integration/Chief Information Officer
• ASD for Public Affairs
•Director, Cost Assessment and Program
Evaluation
• Director, Joint Staff
• Deputy Chief Management Officer
• Chief, National Guard Bureau
* Or Principal Deputy
21
Defense Appropriations
“Colors of Money”
Military Personnel (MILPERS)
Active & Reserve Forces
Operation & Maintenance (O&M)
MILPERS
O&M
PROC
RDT&E
MILCON
Active & Reserve Forces
(civilian Salaries, supplies,
spares, fuels, travel, etc…)
Environmental Restoration
Former Soviet Union Threat
Reduction
Overseas Humanitarian,
Disaster, & Civic Aid
Procurement
Aircraft
Missiles
Weapons
Weapons & Tracked Combat
Vehicles
Ammunition
Other Procurement
Shipbuilding & Conversion
Marine Corps
Defense wide procurement
National Guard & Reserves
Research, Development, Test &
Evaluation (RDT&E)
Basic Research
Applied Research
Advanced Technology Development
Advanced Component Development
& Prototypes
System Development & Demonstration
RDT&E Management Support
Operational Systems Development
Military Construction (MILCON)
Facilities
Family Housing
Base Realignment & Closure (BRAC)
Other
Defense Health Program
Chemical Agents & Munitions
Destruction
Drug Interdiction & Counter-Drug
Activities
Joint Improvised Explosive Device
Defeat Fund
Rapid Acquisition Fund
Office of the Inspector General
22

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