APEX 39 CAPE Priorities & Opportunities Jamie Morin OSD CAPE 9 September 2014 PLCC B6

Agenda Introduction to CAPE PPBE Process & Building PB15 PB15 Summary New Defense Strategy Expected Themes in PB16 End Game Speculation Continuing Challenges

Introduction to CAPE Independent advisor to SECDEF and DEPSECDEF on programmatic resource allocation issues and decisions Secretary of Defense Robert McNamara established “Systems Analysis” in 1961 (McNamara’s “Whiz Kids”) to analyze nearly every aspect of the DoD budget Name changed to Program Analysis & Evaluation (PA&E) in 1970s Weapons Systems Acquisition Reform Act (WSARA) of 2009 changed the name to Cost Assessment & Program Evaluation (CAPE) Focus on reducing cost overruns and schedule delays (ICEs, AoAs, etc.) Play a key role in the Planning, Programming, Budgeting, & Execution (PPBE) process Links the defense strategy to resources “Big P” versus “little p” Established in 1961 by Secretary McNamara to analyze nearly every aspect of the DoD budget Originally named Systems Analysis Changed to Program Analysis and Evaluation (PA&E) in the 1970s Weapons Systems Acquisition Reform Act (WSARA) of 2009 Established the Director of Cost Assessment and Program Evaluation (D,CAPE), a Presidentially appointed, Senate confirmed position Transferred PA&E staff to CAPE Addressed shortcomings in DoD acquisition processes Required realistic cost estimation throughout the acquisition cycle Expanded the need to provide guidance for Analyses of Alternatives (AoAs) Serve as an independent advisor to the Secretary and Deputy Secretary of Defense on programmatic resource allocation issues and decisions Develop innovative options to assist the Secretary achieve objectives (e.g., EASE) Manage the Program Review process and work with Comptroller to build the budget submission for Congress Provide accurate, objective analysis to the Secretary & Deputy Secretary Research topics selected by the Secretary for in-depth analysis (e.g., LRS and Munitions FEAs) Conduct trade-off analyses to better inform decisions Reassess major programs as DoD needs and capabilities evolve Provide analytical support for long and short term tasks (e.g., Strategic Choices and Management Review (SCMR)) Consult with the USD(AT&L) and USD(C), Service Secretaries, and head of the Defense Agencies on matters of cost estimation in DoD Issue guidance on cost estimation for and review cost estimates of MDAPs and MAISs Issue guidance on life-cycle management and sustainability costs in MDAPs and MAISs Manage the 3-Star Programmer’s Group meetings that feed much of the content presented at the Deputy’s Management Action Group (DMAG) Inform other processes across the Department (e.g., JROC, JCIDS, etc.)

PPBE Process & Building PB15 CAPE’s focus is on FY16 and beyond (informed by what’s happening today Strategic Choices & Management Review (SCMR) was completed in the summer Provided insight that was used to adjust Service toplines in fiscal guidance Fiscal guidance emphasized that we have less of a need for large ground forces, but that we should protect forces needed for Asia/Pacific conflicts

PB15 Summary Navy Air Force Army Marine Corps Efficiencies Cruiser modifications (innovative) Air Force Cut A-10s and legacy modification; Protected F-35, Tanker & Bomber KC-10s Army GCV Helo restructure Force structure targets Marine Corps Focused on readiness

PB15 Topline We’re still living with uncertainty FY15 Opportunity, Growth, & Security Fund ($26B for DoD) Readiness Enhancement -- Training adds in Army -- Spares and logistics in Navy -- Unit training in USMC -- Flying hours in Air Force Installation support increase -- All Services increase base sustainment -- All Services add MilCon funding Investment increases -- Army helicopters (56) -- Navy P-8 (8), E-2D Aircraft (1) -- USMC Light Armored Vehicle and minor procurement -- Air Force F-35 (2), C-130J (10), MQ-9 Aircraft (12) ++++++++++++++++++ FOR FY15–19: Blue minus Green = PB14 minus PB15 = $113B Green minus Red = PB15 minus BBA/BCA = $115B What do we know? Continuing Resolution Election year New defense strategy Reduced reliance on OCO   What don’t we know? No new budget deal What topline OMB will submit How to address unfunded $$ Long term health of force

New Defense Strategy QDR & PB15 Strategy Attempt to measure delta in sequestration in terms of the strategy Secretary’s speech suggests a much less capable force How much less capable? In what areas? What can we do about it? How do we maximize the performance of a sequestered force?

Expected Themes in PB16 Budget disconnects Uncertainties What we know Topline levels BRAC authority Compensation Other unknowns What we know Continuing Resolution likely in the fall Elections this fall Debt ceiling suspended until March 2015 What we DON’T know No new budget deal Long term health of force (depends on where we are in the out-years)

End Game Speculation Submit a higher, non-sequestered budget level Need a plan to prepare a budget at at sequestered budget levels if we do not get the topline we want

Balancing Challenges Fiscal Uncertainty Topline Timing OCO Action on prior requests Strategic & Operational Challenges Shift to Asia – away game, geography, & A2AD EM Spectrum Dominance Commercial technological pacing vs DoD OODA Loop Adversary cost imposition Internal Cost Pressures People Acquisition Operations and Support

BACKUP

Principal Deputy Director LtGen Robert E. Schmidle Jr. CAPE Org Chart DIRECTOR, CAPE Jamie M. Morin Principal Deputy Director LtGen Robert E. Schmidle Jr. Front Office Team Cost Assessment Deputy Director Rick Burke Program Evaluation Deputy Director Scott Comes Analysis & Integration Deputy Director Vacant Program, Data, & Enterprise Services Deputy Director Joseph Nogueira Economic and Manpower Analysis Weapon Systems Cost Analysis Advanced Systems Cost Analysis Operating and Support Cost Analysis Land Forces Naval Forces Tactical Air Forces Projection Forces Irregular Warfare C4 and Information Programs Strategic Defensive & Space Prgms Force and Infrastructure Analysis Intelligence, Surveillance, & Rec. Program Analysis Simulation Analysis Center Force Structure & Risk Assessment Enterprise Services Joint Data Support Program Resources & Information Systems Management