1. Planning, Programming, Budgeting, and Execution (PPBE)
Roberta Tomasini
DSMC-SPM
(703)

2. From Requirement to Capability
Planning, Programming,
Budgeting and Execution
Life Cycle
Cost
Annual
Funding
Cost
Analysis
Estimate
Funding
Policies
ICE
FYDP DPPG POM RMD
Full
Funding (Exceptions)
MFP PE BES FEA
CAIV
CCE
Fiscal
Environment
Incremental
Funding
MBIs
POE
AoA
Congressional
Enactment
HAC HASC HBC
SAC SASC SBC
President’s
Budget
Budget
Resolution
Authorization
&
Appropriation
Laws
REVIEW:
- Last refresher looked at cost estimating concepts and required documentation. We said then that the cost estimate is the basis for the program’s budget requests.
- In this refresher, we’ll examine how we turn the cost estimate into a budget.
Acquisition Program Baseline
Operational
Concept
Force Structure
Modernization
Operational Capability
Readiness
Sustainability
Feedback
Commitment Reprogramming
Capabilities-
Based
Assessment
Capability Docs
Budget Authority Obligation Expenditure Outlay
Budget
Execution

3. PPBE Outline PPBE Overview Building Blocks FYDP, MFP, Program Elements
PPBE Process
Membership of DAWG and SLRG
Capability Portfolio Managers (CPMs)
FY Schedule

4. Three Major DoD Management Systems
Planning,
Programming,
Budgeting and
Execution
QDR
Joint Capabilities
Integration and
Development
System (JCIDS)
Defense
Acquisition
System
-DoD has three Decision-making Support Systems
-1. AMS (Acquisition Management System)
-- how we acquire weapon systems
-- primary document is DoDI
-- also referred to as little “a” acquisition
-- event driven process
2. JCIDS
--determines what is needed
-- primary document is CJCSI 3170, which is capabilities-based with more emphasis on jointness
-3. PPBE
-- resource allocation in DoD – providing warfighter with best mix of forces, equipment and support attainable under fiscal constraints
-- increased emphasis on using performance metrics to focus on output, return on investment
-- Calendar driven
-QDR: the major statement of defense strategy and business policy
--MID 913 states that QDR is the single hierarchical link integrating all internal decision processes
-JCIDS and AMS are event-driven; PPBE is calendar-driven, backing off from the PB
-All three circles form “Big “A” Acquisition

5. 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
PPBE is the primary resource management system for DoD.
Until now, unchanged since developed by McNamara in 1961
What do we do in PPBE?
Strategy - How are we going to defend the nation? National Goals
Forces - What are we going to use to defend the nation? to execute that Strategy?
Prioritize - Which ones, which programs will be funded now?
Resources - How much will be spent on each program?
Output - Where are we getting our best return?
Trans: What are the phases in PPBE?

6. 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 years
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

7. Future Years Defense Program (FYDP)
Computer database maintained by D,CAPE
Approved force structure and resources in SECDEF Defense Program
Contains PY, CY, BY + 4 Out-Years +
3 additional years for force structure only
Updated two times per PPBE Cycle:
Program Objectives Memorandum/Budget Estimate Submission (POM/BES) – July
President’s Budget (PB) - February 12 13
Computer database maintained by Dir (PA&E)
Summarizes forces, equipment and resources.
Comprises one prior year (PY), the current year (CY), the “biennial” budget years (BY1 and BY2), four additional years for resources (POM) and three additional years for force structure only.
It is a “living” record reflecting the decisions made in the three phases of PPBS
Updated two times per year to reflect the
BES (Aug/Sep), and
President’s Budget (Jan/Feb) submissions.
New Approved Numbers for your program
Why two budget years? The process was intended to produce a two year budget. However, Congress appropriates one year at a time. So, we have “odd years”. The components will “tweak” the POM as part of an off year effort called the APOM by the Air Force, Mini-POM by the Army and Program Review by the Navy.
QTS: When was the POM/BES submission this year? 22 Aug 02
TRANSITION: Let’s take a look at how the FYDP is structured

8. Future Years Defense Program (FYDP)
DOD APPROPRIATIONS
Procurement
Military Construction
Military Personnel
Ops & Maintenance
Other
RDT&E
OTHER
DEF
AGENCIES
AIR
FORCE
NAVY
ARMY
Strategic Forces
General Purpose Forces
Command, Control, Communications, Intell & Space
Mobility Forces
Guard & Reserve Forces
Research and Development
Central Supply & Maintenance
Training, Medical, and Other Personnel Activities
Administration and Associated Activities
Support of Other Nations
Special Operations Forces
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
MAJOR FORCE PROGRAMS
Cube Chart to illustrate how the FYDP is structured: Divided in three ways:
Appropriation categories for use by Congress and Comptroller
“other” category represents the various other appropriations that exist, such as family housing
Component categories, of interest to Services and other DoD agencies.
11 “Major Force Programs” (MFP) mission-oriented for DoD internal management uses.
Break by MFP in Planning & Programming; by Appropriation in Budgeting
Any single category can contain data from any or all of the other two major divisions
Example: MFP #1 Strategic Forces contains both Navy and AF Ballistic Missiles, as well as data from all five appropriations.
FYDP is broken down into manageable segments called Program Elements (PEs)
Note: Marines fall under Dept of Navy which is considered the “Component”
One Component, two Services
COMPONENTS

9. Program Elements
PROGRAM ELEMENT (PE): Smallest aggregation of resources normally controlled by OSD
- PE NUMBER: Used to track and identify resources; seven digit number followed by an alphabetic suffix
PROGRAM 1 ( STRATEGIC FORCES )
F - B-1B Squadrons
F - Peacekeeper Squadrons
N - Trident
A - Worldwide Joint Strategic Comm
F - SPACETRACK
PROGRAM 2 ( GENERAL PURPOSE FORCES )
A - Airborne Divisions
N - Frigates - Missile
F - F-22 Squadrons
F - Advanced Communications Systems
A - ARMY
N - NAVY
M - MARINE
F - AF
D - OSD
C - MDA
E - DARPA
J - JCS
S - DLA
BB - SOCOM
DBD - DFAS
Program Elements are a tool OSD uses to track resources by program, system, or function so they can see how much is being spent on them.
PEs can be very broad, containing several programs. They also can be very specific, covering a single component of a weapon system. It all depends on the visibility OSD wants to maintain.
These are some examples of Program Elements (PEs), use Trident since talking about Ballistic Missiles.
Seven digit code followed by a letter suffix designating the applicable component or agency.
The first two digits indicate the MFP to which the PE belongs. Although a PE is limited to a specific MFP, it is not in most cases, limited to a single Appropriation.
RDT&E PEs are used by Congress to control program funding levels and to set Below Thresholds Reprogramming (BTR) limits, and are, therefore, somewhat more structured and specific than most other PE’s -- we will discuss this further in FM 5.
All programs and all resources have PEs. The entire FYDP database can be listed by PE. There are over 3600 of them.
SUMMARY: So now that we’ve talked about the major Building blocks of PPBS: the FYDP, MFPs and PEs, Let’s compare the old PPBS to the new PPBE…
Ref: DoD H

10. FEAs PPBE – Planning Phase APR ( DPPG)/Sep ( FEAs)
Finish 2nd Year
~Starts FEB/MAR (1st Year)
President
National Security Council
CIA/DIA/JCS/OSD
FEAs
Planning Phase focus:
Threat vs Capabilities
Update strategy
Guidance for programming
Under direction of CAPE
FEAs developed in Planning Phase. Used
To inform program reviews.
NSS
To Concurrent Program/Budget Review
NDS
QDR
DPPG
OSD
Level
JCS
NMS
CPR
Level
(JCS,
COCOMs,
SERVICES)
CIA – Central Intelligence Agency; COCOM – Combatant Commander; CPR – Chairman’s Program Recommendation
DIA – Defense Intelligence Agency; DPPG –Defense Planning &Programming 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; FEA – Front End Assessments

11. Concurrent Program/Budget Review
JUL
OCT
NOV
DEC
FEB
FEAs Continued
3-Star Group
OSD CAPE/
OMB
Issue
Resolution
POM
SECDEF/DEPSECDEF
SLRG*&DAWG*
CPMs
CPA
JCS
Components
Defense Agencies
RMDs
TBD = *
Budget Review:
There are four areas considered by the USD(C) and OMB analysts as principal issue areas during the review and “scrub” of the budget submission from the Services and agencies: program pricing, program phasing, funding policies and program/budget execution.
Program Pricing - Examines whether the specific program has been priced out properly (e.g., that the budget was prepared on the basis of “most likely cost” of the work to be done and that the proper escalation index has been applied to the constant- year budget estimate to determine the current then-year funding requirement).
Program phasing - Examines the compatibility between the approved acquisition strategy and the funding necessary to pay for the requirements shown in that strategy (e.g., that have Procurement funds been phased properly to coincide with program plans for production).
Funding policies - Examines the compliance of the budget request with the proper policy for each specific appropriation category (e.g., RDT&E has been budgeted on an incremental basis; procurement and MILCON on a full funding basis; and O&M and MILPERS on an annual basis).
Program/Budget execution - Examines the efficiency with which an organization has executed (i.e., obligated and expended) currently available funds and the effect of current year execution on budget year submissions. As an example, has the organization met established goals for obligations and expenditures during the current fiscal year? If not, can those “excess” funds from the current fiscal year be allowed to slip into a future year and, therefore, allow a decrease in the funding requirement in that future year?
Of the four budget review issues, program executability/budget execution is the primary concern
Adv Questions/
Budget Hearings
USD(C)/
OMB
BES
MBI* PB
Services / PEO / PM
Answer / Reclama
Updates
FYDP
Updates
FYDP
BES – Budget Estimate Submission; CAPE – Cost Assessment & Prgm Evaluation
COCOM – Combatant Command; CPA – Chairman’s Pgm Assessment; CPM – Capability Portfolio Manager
DAWG – Deputy’s Advisory Working Group; FEAs- Front End Assessments; FYDP – Future Years Defense Program
MBI – Major Budget Issues; OMB – Office of Management and Budget; PB – President’s Budget
POM – Program Objectives Memo
RMD – Resource Management Decision; SLRG – Senior Leader Review Group

12. Deputy’s Advisory Working Group
Deputy Secretary of Defense (Chair)
Vice Chairman Joint Chiefs of Staff (Vice Chair)
Under Secretary of Defense (AT&L)
Under Secretary of Defense (Policy) and Principal Deputy
Under Secretary of Defense (Comptroller) /Chief Financial Officer or Principal Deputy
Under Secretary of Defense (P&R) or Principal Deputy
Under Secretary of Defense (Intelligence) or Principal Deputy
Secretary or Under Secretary of the Army
Secretary or Under Secretary of the Navy
Secretary or Under Secretary of the Air Force
Chief or Vice Chief of Staff of the Army
Chief or Vice Chief of Naval Operations
Chief or Vice Chief of Staff of the Air Force
Commandant or Assistant Commandant of the Marine Corps
Commander or Deputy Commander, SOCOM
Deputy Chief Management Officer
ASD (Legislative Affairs)
ASD (Networks & Information Integration/Chief Information Officer)
ASD for Public Affairs
General Counsel
Director of Administration and Management
Director or Principal Deputy Director, CAPE
Director, Joint Staff
Chief, National Guard Bureau or Deputy
Director, SP&P-J5
Director, FS,R&A-J8
This is the membership of the DAWG, chaired by DepSecDef. It started out as the ”Group of 12” for the QDR reviews done in 2005.

13. 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 & Prgm Eval
Director, Joint Staff
Deputy Chief Management Officer
Chief, National Guard Bureau
This is the membership of the Senior Leader Review Group, chaired by SecDef.
* Or Principal Deputy

14. 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
Roles and responsibilities of the CPMs , based on DepSecDef memos and draft 7045.aa as of Aug 08
CPMS are primarily advisory to the DAWG, but note that they do not have decision making authority.

15. Capability Portfolio Managers (CPMs) Leadership
and
Tier 1 JCA
CPM
Civilian
Lead
Military
Senior Warfighting Forum (SWarF)
Lead *
Joint Staff
OPR *
Functional
Capability
Boards *
Command and Control
ASD (NII)
JFCOM
J-3
Battlespace Awareness
USD (I)
STRATCOM
J-2
Net Centric
J-6
Logistics
USD (AT&L)
TRANSCOM
J-4
Building Partnerships
USD (P)
Director, J-5
N/A
J-5
Protection
Director, J-8
J-8
Force Support
USD (P&R)
Force Application
Joint Requirements Oversight Council (JROC)
SOCOM
Corporate Management & Support
DCMO
Director, Joint Staff
* As designated by the Chairman of the Joint Chiefs of Staff (CJCS)

16. FY 12–16 Program/Budget Schedule
2 Apr Fiscal Guidance Issued
Apr Defense Planning and Programming Guidance Issued
30 Jul Component POM/BES Submissions Due (databases lock)
2-13 Aug Component POM Briefs to 3-Star/DAWG
30 Aug Issue Nominations Due
3 Sep Budget Justification Material Due to OSD/OMB
22 Nov Program/Budget Review Complete
7 Feb President’s Budget Submitted to Congress
NOTE: Submission includes FY 12 OCO (supplemental) request
This is the schedule we have for the FY Off-Year cycle; they are all Key dates
However, note that:
Fact-of-Life information is due 1 August with OSD decisions being made by 15 August
Service and Agency Change Proposals are due 6 September, along with electronic submissions of OSD-accepted Fact-of Life justification material and any other material OSD may have requested
OSD expects to complete a review of the Service and Agency-submitted Change Proposals by 30 September
They’ll review for compliance with the guidance and acceptability of the offsets
Those that are accepted will be assigned to PA&E or USD(C) for further issue development and resolution
Please note that, as I said before, OSD staff will prepare any Change Proposals considered necessary to implement BRAC and QDR decisions that are made prior to submission of the FY 07 Pres Bud
The overall process should be complete by 20 December with the DoD budget lock
This is a good time to point out that the 12 May Memo announcing the Procedures and Schedule for FY Integrated Program and Budget Review stated that detailed instructions will be provided later in another document and on the Program Review website 16