Presentation is loading. Please wait.

Presentation is loading. Please wait.

Planning, Programming, Budgeting, and Execution (PPBE)

Similar presentations

Presentation on theme: "Planning, Programming, Budgeting, and Execution (PPBE)"— Presentation transcript:

1 Planning, Programming, Budgeting, and Execution (PPBE)
I’m __________ and I’ll be discussing PPBE with you today. First, a little about my background……. PPBE is one of the three major decision support systems in the weapon system acquisition business. The other two, JCIDS and the acquisition management system, have already been discussed. Roberta Tomasini Professor of Financial Management Defense Acquisition University

2 FM Scope: From Requirement to Capability
Planning, Programming, Budgeting and Execution Life Cycle Cost Annual Funding Cost Analysis Estimate ICE Funding Policies Full Funding (Exceptions) FYDP DPG POM RMD MFP PE BES SPR CAIV CCA Fiscal Environment Incremental Funding POE AoA Congressional Enactment HAC HASC HBC SAC SASC SBC President’s Budget Budget Resolution Authorization & Appropriation Laws This chart is intended to show how we get from “Requirement” to “Capability” from a Financial Management perspective….. Starting with the lower left cloud, “Operational Concept”, as this is where it all starts for any discipline in acquisition. Operational Concept is the same as JCIDS plus. It includes the capability documents generated through the JCIDS process as well as a capabilities- based analysis and all acquisition programs have an acquisition program baseline (APB), which is a signed document between the program manager and the milestone decision authority in the acquisition chain of command. The agreement is on cost, schedule and performance parameters for a specific program. Operational concept leads to the first major area of Financial Management (FM), “Cost Analysis”. This includes doing a cost estimate, which is the foundation for the rest of the FM process. The second major area of FM is “Funding Policies”. This involves taking the cost estimate and turning it into a budget. Understanding funding policies is an important part of developing the budget. The third major area of FM is “PPBE”. This is the DoD process for allocating resources. We take a budget and submit it up the chain to get buy-in from our service/agency and OSD. This session will focus on this area. The end of the PPBE process is the president’s budget submission to Congress. This leads to the fourth area of FM, “Congressional Enactment”. The end of “Congressional Enactment” is the Authorization and Appropriation laws, which leads to the fifth and final area of FM, “Budget Execution”. Budget execution relates to actual appropriated funds. Now let’s focus on PPBE. 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 Overview Better Buying Power Initiatives Building Blocks
FYDP, MFP, Program Elements PPBE Process and Schedule Resource Allocation Process This is the outline for the PPBE session. There are couple of overview charts… There are a few charts on the PPBE building blocks…..namely, FYDP (the Future Years Defense Program, MFP (Major Force Programs), and program elements. This will be followed by the timing, key players, and key documents in the PPBE process. Lastly, there are charts of the schedule for this PPBE cycle, which is FY10-15.

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 What’s a “Program of Record”? Where is it officially defined?

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 for all appropriated funding – not unique to weapon system acquisition. Only minor changes since developed by McNamara in 1961 Allows for DoD to review it’s mission/strategies bottom up every two years 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? There are three phases in PPBE as shown on the next chart.

6 PPBE Phases Planning (OSD Policy) Programming (OSD CAPE)
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 Brief Overview of PPBE phases: There are three phases: planning, programming and budgeting. The major difference is that we now have a review of program execution/program performance concurrent with the program and budget review (NOT Army’s PPBES) Planning: QDR 2001 shifted the basis of defense planning from a "threat-based" model that dominated thinking in the past to a "capabilities-based" model Capabilities-based model: – Focuses on how an adversary might fight rather than specifically who the adversary might be or where a war might occur. – Recognizes that it is not enough to plan for large conventional wars in distant theaters. Instead, the United States must identify the capabilities required to deter and defeat adversaries who will rely on surprise, deception, and asymmetric warfare to achieve their objectives. Strategic Planning Guidance (SPG)/Guidance for the Development of the Forces (GDF) and Joint Programming Guidance (JPG): Marching Orders for next phase Programming: Components develop Program submissions based on guidance developed in the Planning phase OSD, OMB & Joint Staff review for priority, affordability Info captured in the FYDP Budgeting: Components develop budget submissions OSD(C) reviews budget inputs, with emphasis on funds execution Ultimate aim, to submit a defensible President’s Budget thru OMB to Congress Execution Review Overlays both Program Review and Budget Review processes In past emphasis on input, “how much to spend on each program”; now emphasis is on output, “what are we getting for our money?” Using performance metrics to examine program execution Let’s look at the years reviewed in the PPBE process…

7 Better Buying Power Initiatives USD(AT&L) 14 Sep 10 Memo
Target Affordability and Control Cost Growth 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 Incentivize Productivity and Innovation in Industry 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

8 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

9 “Will Cost” vs “Should Cost” USD (AT&L) and USD(C) 22 Apr 11 Memo
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?

10 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 3 additional years for force structure only What’s Your Latest Approved Numbers? 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 various phases of PPBE Updated two times per year to reflect the POM/BES (Aug/Sep), and President’s Budget (Jan/Feb) submissions 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 “off-years/odd-years”. Originally, OSD and the Components were expected to “tweak” the 2nd year of the President’s Budget/POM as part of an off year effort APOM by the Air Force Mini-POM by the Army Program Review by the Navy However, there have been changes in this off-year/odd-year process, starting in calendar year 2003. TRANSITION: Let’s take a look at how the FYDP is structured 12 13 14 15

11 Future Years Defense Program (FYDP)
DOD APPROPRIATIONS Military Construction Military Personnel RDT&E Procurement Ops & Maintenance Other D E F O A Strategic Forces (1) T I A General Purpose Forces (2) R G H E E Command, Control, Comm, Intell & Space (3) N F N R MAJOR FORCE PROGRAMS A A Mobility Forces (4) O C R V I Guard & Reserve Forces (5) R M Y C E Teaching Points: Data is divided into 11 “Major Force Programs” (MFP) for DoD internal management uses during the planning and programming phases of PPBE. Data is also divided into five Appropriation categories (plus one catch-all “other” category, which simply represents the various other appropriations that exist -- although we in the acquisition community are not normally very interested in their details) for use by Congress when reviewing budget requests and enacting budget authority. Data is also divided into service or component categories. Important to note here that the data in any single category (for example: RDT&E, Army or Strategic Forces) from any one of the three major divisions (i.e., Appropriation, Component or MFP) can contain data from any or all of the remaining two major divisions (for example: Strategic Forces could contain data from all five appropriations and all four Components). The lowest level of detail in the FYDP database is the program element, which is explained on the next chart….. Research and Development (6) Y E S Central Supply & Maintenance (7) Training, Medical, & Other Personnel Activities (8) Administration and Associated Activities (9) DOD COMPONENTS Support of Other Nations (10) Special Operations Forces (11)

12 Program Elements A - ARMY N - NAVY M - MARINE F - AF D - OSD C - MDA E - DARPA J - JCS S - DLA BB - SOCOM DBD - DFAS 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 2 ( GENERAL PURPOSE FORCES ) A - Aircraft Engine CIP N - F/A-18 Squadrons F - AMRAAM PROGRAM 3 ( C3, INTEL & Space) A - Joint Command and Control Program (JC2) N - Aerial Common Sensor (ACS) F - NAVSTAR GPS (User Equipment) Program Elements are the lowest level of detail in the FYDP database. 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 F-22. 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. All programs and all resources have PEs. The entire FYDP database can be listed by PE. There are a few thousands of them. Most acquisition programs have two program elements: one that begins with “06” for the development effort and one that begins with something other than “06” for the production and O&S effort. Ref: DoD H

13 PPBE – Planning Phase President NSS SPR NDS QDR DPG * NMS CPR FEB/MAR
APR/SEP 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 President National Security Council CIA/DIA/JCS/OSD Planning Phase focus: Threat vs. Capabilities Update strategy Guidance for programming & budgeting NSS To DoD “Large Group”/Integrated Program/Budget Submission & Review SPR D, CAPE/VCJCS/ USD(P) Every 4 Years OSD With one exception, this slide depicts the “new” annual Planning phase that is to be used for the PPBE cycle starting in Calendar Year 2010 and which will, ultimately produce the Defense portion of the President’s Budget for FY2012. The one exception to the annual process is the QDR which is conducted in the 1st year of an administration and submitted to Congress in the 2nd year. The DPPG replaces the GDF (Guidance for Development of the Force) and the JPG (Joint Programming Guidance) and is signed by the SECDEF. The FEAs are intended to address major issues for the SECDEF early in the POM/BES review process. For the Calendar Year 2010 process the SECDEF has selected eight major issues. The Director, CAPE is the Executive Secretary for the FEAs and tri-chairs the process with the VCJCS and the USD(P). Issues nominated but not selected for the FEA review process will be addressed by the DEPSECDEF through the Deputy’s Advisory Working Group (DAWG). NDS QDR DPG * Level Guidance for POM/BES submission and Integrated Program/Budget Review JCS * Note: 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). NMS Level CPR (JCS, COCOMs, SERVICES)

14 PPBE – Integrated Program/Budget Review OSD/OMB Budget Hearings
JUL OCT NOV DEC JAN/FEB DoD “Large Group” SPR 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 3-Star Group OSD/ CAPE Issue Resolution POM SECDEF/DEPSECDEF SLRG & DMAG CPA CPMs JCS Components/ Defense Agencies Program Review focus: Compliance with DPG RMDs This slide shows the FEAs, initiated in the previous chart (Planning Phase) continuing to be conducted into the Integrated Program/Budget Review time period. The issues included in the FEAs are to be resolved through the Large Group (similar in make-up to the Defense Senior Leadership Conference, as listed in DoD D , DoD Senior Governance Councils). The output of the Large Group, as well as that of the DAWG-addressed issues that were not selected by the SECDEF for FEAs, is provided to the SECDEF/DEPSECDEF. All other POM issues are addressed under the existing process led by the CAPE. Asterisks (TBD) indicate that the organizations may be re-named or realigned, or that activities (MBI and reclama process) may or may not be conducted. Asterisks were placed based on feedback from OSD POCs. The results of the review process for both the BES and the POM will be documented, as appropriate in RMDs. It is expected that an RMD will have two annexes – one for program-related decisions and the other for budget-related decisions. DoDD specifically addresses the membership of the Defense Senior Leadership Conference, the Senior Leader Review Group, and the Deputy’s Advisory Working Group. The membership of the “Small Group”, the “Large Group”, and the “Large Group Plus” has been referred to in the media but not codified as of May 2010. BES 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

15 FY 14–18 Program/Budget Review Schedule
Mar Defense Planning Guidance (DPG) Issued Mar 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

16 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 Execution 2nd Yr 3rd Yr FY 13 FY 13 and prior PB FY 14 Cycle Planning Program/Budgeting Enactment Execution 2nd FY 14-18 DPG FY POM FY 14 BES FY 14 FY 14 and prior PB FY 15 Cycle Planning Program/Budgeting Enactment Exec The RAP chart has been modified to reflect an annual cycle for all activities. It also incorporates terminology used for the FY12-16 POM/BES cycle. FY DPG FY POM FY 15 BES FY 15 FY15 & prior PB FY 16 Cycle Planning Program/Budgeting FY DPG FY POM FY 16 BES DPG – Defense Planning Guidance PB – President’s Budget POM – Program Objectives Memorandum BES – Budget Estimate Submission

17 BACKUP Charts

18 Most Probable Cost (MPC)
AKA Most Likely Cost 50% chance of overrunning/underrunning on a normal curve The Fin Mgt Reg (DoD R) 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”

19 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.

20 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 J-8 Battlespace Awareness USD (I) STRATCOM J-2 Net Centric Logistics USD (AT&L) TRANSCOM J-4 Building Partnerships USD (P) Director, J-5 N/A J-5 Protection Director, 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)

21 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 This is the membership of the Senior Leader Review Group, chaired by SecDef. * Or Principal Deputy

22 Defense Appropriations “Colors of Money”
Military Personnel (MILPERS) Active & Reserve Forces Operation & Maintenance (O&M) (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 RDT&E PROC MILPERS O&M MILCON Teaching Point: In the unlikely case the term “colors of money” is not familiar. This also shows a break out of the major appropriations. The different RDT&E budget categories are also referred to as different colors of money by some.

Download ppt "Planning, Programming, Budgeting, and Execution (PPBE)"

Similar presentations

Ads by Google