1. Life Cycle Cost Composition
MILCON
Facilities
Disposal
O&M (or others
as appropriate)
RDT & E
Development Costs of
PME & Support Items
Systems Engineering
Program Management
Test & Evaluation
Development Cost
Operations &
Support •
O&M, MILPERS
Operating and
(or others as
appropriate)
PROCUREMENT
Initial Spares
Prime Mission
Equipment (PME)
Support Items
Flyaway Cost
Weapon System Cost
Procurement Cost
Life Cycle Cost
Program Acquisition Cost

2. Cost Estimating Requirements
ACAT IC & ID (MDAP) ACAT IA (MAIS)
POE Program initiation & all subsequent Program initiation & all subsequent
milestones, including FRP DR milestones
- Includes Economic Analysis
CARD MS A & all subsequent milestones MS A & whenever
including FRP DR Economic Analysis is required
- Draft 180 days prior to OIPT/milestone - Draft 180 days prior to OIPT/milestone
- Final 45 days prior to OIPT/milestone - Final 45 days prior to OIPT/milestone
CCE MS A and all subsequent milestones MS A and whenever an Economic Analysis
including FRP DR is required
ICE Required by law for all MDAP programs *
- Prepared by OSD CAPE for ACAT ID, and ACAT IC
at discretion of USD (AT&L)
- Prepared by component cost agency (AFCAA,
DASA-CE, NCCA) for ACAT IC (if no CAPE estimate)
- In advance of any certification under Title 10, USC, Section 2366a (MS A) and Section 2366b (MS B)
- In advance of any decision to enter low-rate initial production (LRIP) (MS C) or full-rate production (FRP DR)
- In advance of any certification of MDAPs that experience critical cost growth (Title 10, USC, Sec 2433a)
- In advance of any report of Critical Program Changes for MAIS (Title 10, USC, Sec 2445c(f))
*ICE statutory requirement (Title 10, US Code, Sec 2434) and P.L , May 22, 2009
Source: DoDI , January 2015 and Weapon Systems Acquisition Reform Act of 2009
CARD: Basically must be prepared any time an independent estimate (ICE or CCA) is to be done
POE: Every ACAT I and IA program must have a life cycle cost estimate at each milestone. This is inferred from DoD R. Note that ACAT IA estimates are to include estimates of benefits as well as costs (to determine ROI).
CCA: These requirements are taken from DoD R. Note that a CCA serves as the ICE for an ACAT IC program when CAPE does not perform ICE.
Why no CCA MSB for ACAT IA pgms? Majority of costs are in development
ICE: Title 10, USC Sec 2434 requires ICE at MS II and III for MDAPs; DoD R requires ICE at MS A, B, C. CAPE will do ICE for all ACAT ID programs and those ACAT IC programs requested by USD (A&T). Note that ACAT IA programs are not subject to Title 10 requirement because they are not weapon systems (MDAPs).
TRANS: Now let’s take a look at the review process for these estimates
ACAT II & ACAT III: POE (and, at MDA discretion, an independent cost estimate prepared by the component cost agency)
at program initiation and all subsequent milestones
AFCAA = Air Force Cost Analysis Agency
ACAT = Acquisition Category
CAPE = Cost Assessment & Program Evaluation
CARD = Cost Analysis Requirements Description
CCE = Component Cost Estimate
DASA-CE = Dep Asst Sec of Army (Cost & Economics)
FRP DR = Full Rate Production Decision Review
ICE = Independent Cost Estimate
MAIS = Major Automated Information System
MDA = Milestone Decision Authority
MDAP = Major Defense Acquisition Program
NCCA = Naval Center for Cost Analysis
OIPT = Overarching Integrated Product Team
POE = Program Office Estimate
USD(AT&L) = Under Secretary of Defense (Acquisition, Technology, & Logistics)

3. PPBE – Planning Phase - Lead by USD (P)
YEAR 1
FEB/MAR
Elapsed Time: Months
YEAR 2
APR/MAY
President
National Security Council
CIA/DIA/JCS/OSD
CIA – Central Intelligence Agency
COCOM – Combatant Commander
CPR – Chairman’s Program Recommendation
DIA – Defense Intelligence Agency
DPG – Defense Planning Guidance
DSR – Defense Strategy Review formerly known as the Quadrennial Defense Review
JCS – Joint Chiefs of Staff
NDS – National Defense Strategy
NMS – National Military Strategy
NSS – National Security Strategy
OSD – Office of the Secretary of Defense
USD(P) – Undersecretary of Defense (Policy)
NSS
Every
4 Years
Guidance for POM/BES submission and OSD Program & Budget Review
OSD
NDS
DSR
DPG
Level
New slide - Removed reference to SPRs
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).
JCS
Planning Phase focus:
Threat vs. Capabilities
Update strategy
Guidance for Programming & Budgeting
NMS
Level
CPR
(JCS,
COCOMs,
SERVICES)

4. PPBE - Program Review JUL AUG SEP OCT NOV CAPE POM Issue Resolution
CAPE – Cost Assessment & Prgm Evaluation
CPA – Chairman’s Program Assessment
DEPSECDEF – Deputy Secretary of Defense
DoD – Department of Defense
DMAG – Deputy’s Management Action Group
DPG – Defense Planning Guidance
FYDP – Future Years Defense Program
POM – Program Objectives Memorandum
RMD – Resource Management Decision
SLRG – Senior Leader Review Group
SECDEF – Secretary of Defense
Components/
Defense
Agencies
Issue
Resolution
SECDEF / DEPSECDEF
SLRG & DMAG
POM
CAPE
CPA
JCS
FYDP
Update
3-Star Group
Teams
DoD
“Large Group”
Programmatic
RMD
Program Review focus:
Compliance with DPG

5. Services / PEO / PM Answer / Reclama OSD/OMB Budget Hearings
PPBE – Budget Review
BES – Budget Estimate Submission
FYDP – Future Years Defense Program
MBI – Major Budget Issues
OMB – Office of Management and Budget
OSD – Office of the Secretary of Defense
PEO – Program Executive Officer
PB – President’s Budget
PM – Program Manager
RMD – Resource Management Decision
USD(C) – Undersecretary of Defense (Comptroller)
Components/
Defense
Agencies
BES PB
MBI
USD(C) &
OMB
FYDP
Update
Services / PEO / PM Answer / Reclama
SEP OCT NOV DEC JAN/FEB
Budget
RMDs
Adv Questions/
OSD/OMB Budget Hearings
Budget Review focus:
Pricing
Funding policies
Phasing
Budget execution

6. Resource Allocation Process

7. Congressional Enactment Timetable
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT ^ 15 15
PRES BUDGET
“TARGET” FISCAL YEAR
COMMITTEE INPUTS
FLOOR
HRNGS MARKS FLOOR
HRNGS MARKS FLOOR
HOUSE
SENATE
AUTHORIZATION
APPROPRIATION
BUDGET RESOLUTION
CONF ^
RESOLUTION
This is a notional timetable -- based on perfect conditions (which almost never happens in real life.)
Committees (HBC/SBC, HASC/SASC, HAC-D/SAC-D)
Budget Resolution is not a law, but ceilings are binding
If point of order because ceiling exceeded, 60% vote to pass
Should be passed before Auth/Approp begin debating legislation
Auth/Approp all going on at same time (House tends to lead Senate)
Language (Committee and Conference Reports)
TRANSITION: Now that we’ve seen the overall flow of a bill through Congress, let’s look at what DoD can do to affect Congressional action during the process. After the Committees mark up the PB, DoD attempts to convince Congress that some of the marks will be counterproductive -- these are called appeals.
BILL / RPT
SAC HRNGS MARK-UP FLOOR
HAC HRNGS MARK-UP FLOOR
SASC HRNGS MARK-UP FLOOR
HASC HRNGS MARK-UP FLOOR
FLOOR
CONF /RPT ^
ACT ^
ACT

8. Below Threshold Reprogramming
Amounts are Cumulative Over Entire Period of Obligation Availability
APPRN MAX INTO MAX OUT LEVEL OF CONTROL OBL AVAIL
Lesser of + $10 M or + 20%
Lesser of - $10 M or - 20%
RDT & E
Program Element
2 Years
Lesser of + $20 M or + 20%
Lesser of - $20 M or - 20%
3 Years
SCN: 5 Years
Line Item
PROC
Budget Activity
(or Defense Agency)
Some Sub-Activity Limitations on Decreases (see reference below)
O & M
+ $15 M
- $15 M
1 Year
No Specific Congressional Restriction
MILPERS
+ $10 M
1 Year
Budget Activity
BTR actions are approved by individual services. Service Comptrollers can reprogram these amounts without prior approval of SECDEF or Congress.
These thresholds apply only within Appropriation accts and within the same FY
Delegated to different levels in each Service
Must identify source as well as bill
Go thru thresholds
MILCON has its own appropriation bill (and its own rules in the FMR)
Obligation Availability: Remember that when we talk about reprogrammings, we’re only talking about those available years (01/02 for RDT&E, 00, 01, 02 for procurement). 03 is in prep for PBl. Moving money in the FYDP (03 & out) is called Zero Based Transfer (ZBT)
TRANSITION: What happens to funds that are no longer available for obligation? To answer that we have to revisit appropriation life.
Lesser of $2 M %
No Specific Congressional Restriction
MILCON
Project
5 Years
Reference Sources: DoDFMR R, Volume 3, Chapter 6 (Sep 2015) and Chapter 7 (Mar 2011)

9. Appropriation Life Cycle
Years  1 2 3 4 5 6 7 8 9 10 11
O&M
RDT&E
Procurement
Ships
MILCON
MILPERS
Current Period: Available for new obligations, obligation adjustments, expenditures, and outlays
Expired Period: Available for obligation adjustments, expenditures, and outlays
Cancelled: Unavailable for obligations, obligation adjustments, expenditures, and outlays