2 What Is the Purpose of PPBE? Provide Civilian Control and Strategic DirectionCentralizes decision-making in the Office of the Secretary of DefenseManages allocation of resources to meet the Secretary’s goalsCreate a joint (DoD-wide) programIntegrates individual components’ inputs into a single defense programEnsures stakeholders have a voice; builds consensusProvide financial “checks and balances”Promotes efficient and effective allocation of fundsEnsures the cost of defense programs are realistic / affordableProvide basis for justifying programs and budgets to the White House and CongressThis slide identifies the objectives of PPBEThe system is a tool used by the Secretary of Defense to ensure that his goals--and that of the President--are implementedPPBE is also used to create a joint Defense Program -- one that balances the capabilities of the Army, Navy, Air Force, and Marine CorpsThe system provides financial checks and balances -- and an opportunity for programs and Services to compete for resourcesFinally, the decision making process is designed to be transparent --internal justifications are used to justify programs to CongressPPBE is the principal tool used by the Secretary and the Deputy Secretary in managing the Department of Defense
3 The Objective of PPBEPPBE’s main objective is to establish, justify, and acquire the fiscal and manpower resources needed to accomplish missions in executing the Defense StrategyPLANNINGPROGRAMMING &BUDGETINGOne important thing to keep in mind is the difference between DoD’s PPBE process and the Army’s PPBE process. DoD’s is the overarching system that rationalizes and attempts to ultimately integrate the submissions from the Services and Defense Agencies into one defense budget.The overarching objective of the Army PPBE process is to establish, justify, and acquire the fiscal and manpower resources needed to accomplish its specifically assigned missions according to the National Military Strategy.During each phase of the PPBE process the objectives are:• During all phases of the PPBES, to provide essential focus on Departmental policy and priorities for Army functional activities.• Through planning, to size, structure, man, equip, and train the Army force to support the national military strategy.• Through programming, to distribute projected manpower, dollars, and materiel among competing requirements per Army resource allocation policy and priorities.• Through budgeting, to convert program decisions on dollars and manpower into requests for congressional authorization and appropriations.• Through program execution, to —• Apply resources to achieve approved program objectives.• Adjust resource requirements based on execution feedback.• Through budget execution, manage and account for funds to carry out approved programs.PROGRAMEXECUTIONBUDGETEXECUTIONPPBE is the process through which DoD takes a long term perspective of its needs and prioritizes operational requirements within given fiscal constraints
4 Notional FY10-15 PPBE Cycle Components TodayAssessment & Resource Allocation & Budget FormulationPresentation,Justification &ApprovalStrategy & Goals/ObjectivesManagement & ApportionmentPlanningProgramming &BudgetCongressExecutionFY10-15Army planning for the FY 10 budget and program submission began in CY 2006 culminating with the publication of the Army Plan (TAP) that is sort of the capstone of Army planning documents.We are now in the programming phase where we decide what programs need to be resourced in order to accomplish the goals of the planning process. This effort includes taking those decisions and converting them to the language congress uses, appropriations and budget activities. The conversion is necessary because while programs are output oriented, congressional taxonomy for budgeting is input oriented.After we complete this process for the POM/BES (Change Proposals in an “on year”), OSD and OMB will review our decisions and our budget submission becomes part of the President’s Budget that will go to congress in Feb of CY 09.Assuming congress passes the appropriation on 1 Oct 2009 we then will execute our financial plans. As indicated by the arrow, some annual appropriations such as procurement actually execute over multiple years.JAN 07JAN 08JAN 09JAN 10JAN 11
5 Multiple PPBE Cycles Ongoing Each Year TodayFY06-11CongressExecutionFY07-11Change PropCongressExecutionFY08-13PlanningPOM/BESCongressExecutionFY09-13PlanningChange PropCongressExecutionBecause the Army receives annual appropriations, any given PPBE cycle will overlap with other PPBE cycles for other years.From this chart and the previous two charts, we can see that at any given moment in the Army Staff there are multiple years being managed in one of the PPBE phases.Important. You should always be specific as to which budget cycle you are working on or asking questions about because changes are made for each cycle.Notice that in the odd year budget submissions, we use vehicle called Program Change Proposals (PCPs) and Budget Change Proposals (BCPs) (Collectively known as Change Proposals) to update our financial decisions. This was a direct result of Management Initiative Decision (MID) 913.FY10-15PlanningPOM/BESCongressExecutionJAN 05JAN 06JAN 07JAN 08JAN 09JAN 10
6 PPBE Process -- 4-Year Flow (FY 09 – FY 12 example ) NewAdminProgram/Budget/Execution ReviewFY09Year 1Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecQDRModify Budget Submission (Prev Admin)Change ProposalsOn-yearGDFOn-yearJPGProgram/Budget/Execution ReviewFY 10Year 2TAA 12-17TAP 12-17Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecQDRPOM/BESSubmissionsBudget Submission (Year 1)Program/Budget/Execution ReviewFY 11Year 3This chart is designed to show how the PPBE process has a 4-year flow that corresponds with the election of a new President and changing Administration.Starting at the bottom of the chart you will see the last few months of FY 08 (Current POM POM build) – the fourth year in the current four-year PPBE Cycle. The outgoing administration produces a full POM and the incoming administration submits it (usually with some changes) in Feb. 09 (shown at top of chart)Moving back to the top of the chart Year 1 FY 09 (Off Year) Review and Refinement. The first phase of the cycle implements an early National Security Strategy, with limited changes to the baseline program via Program Change Proposals (PCP) or Budget Change Proposals (BCP). Needed Capabilities are identified and prioritized.The Quadrennial Defense Review (QDR) is published every four years (timed for new administrations) by OSD and functions as DoD’s strategic business plan. The QDR also identifies geopolitical trends, international security trends, and transformational requirements facing the US military. The QDR, along with a National Defense Strategy (NDS), National Military Strategy (NMS) and Guidance for the Development of the Force (GDF) Total Army Analysis (TAA) and The Army Plan (TAP) are started in year one for conclusion in year 2.Year 2 FY 10 (On Year) A Quadrennial Defense Review is finalized and aligned with the President's Budget submission in the second year of an administration, and the SecDef GDF and Joint Programming Guidance (JPG) are issued. Program Objective Memorandums (POM) and Budget Estimate (BES) are submitted.Year 3 (Off Year) Execution of Guidance. Off Year changes are limited to the baseline program via Change Proposals.Year 4 (On Year) SecDef National Defense Strategy (NDS), National Military Strategy (NMS) and Guidance for the Development of the Force (GDF) are issued. POMs and a BES are submitted.NOTE: - the GDF is being produced for the first time in FY08 for POM/BES and replaces the Strategic Planning GuidanceJan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecChange ProposalsBudget Submission (Year 2)Program/Budget/Execution ReviewOn-yearGDFOn-yearJPGFY08 and FY 12’08ElectionYear 4Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecPOM/BESSubmissionsBudget Submission (Year 3)NowFY 08
7 Summary PPBE is DoD’s resource allocation decision support system Processes are overlapping and iterativePPBE is impacted by both internal and external factors; players have differing agendasStrategic planning sets overarching direction and priorities for the PPBE processProgramming assigns resources to achieve directionBudgeting works cost detailsPPBE is the SecDef’s system; he provides the strategic direction and reviews and often changes the service inputsThe process is overlapping; participants can never afford to concentrate exclusively on a single yearThe key innovations of PPBE were programming, the horizontal look at military capabilities, and the FYDP which forces programmers to face the long term consequences of short term choicesThere are many participants in the process, both within and outside DoD and each is likely to have a slightly different agendaThe importance of strategic planning is often underratedRemember the importance of following your programs into the execution yearsOSD is requiring Services to prepare for future security through transformation efforts and capability-based planning and programmingAlways be aware of what is going on around you and where you are in the process
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