1. Defense Systems Management College Defense Acquisition University
RQM 310 Planning, Programming, Budgeting and Execution (PPBE) Process and Related Topics
Roberta Tomasini
Defense Systems Management College
Defense Acquisition University
Fort Belvoir, Virginia
April 2017

2. Outline FM Scope: From Requirement to Capability
DoD Budget: SecDef Mattis memo, 31 Jan 2017
PB 17 Overview (CRIKT, Third Offset, etc.)
PPBE Overview
Building Blocks
FYDP and Program Elements
PPBE Process and Schedule
Resource Allocation Process Overlap
Related Topics
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.

3. 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
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

4. DoD Budget: Sec Def Mattis Memo, 31 Jan 2017
Phase 1: Improve Warfighting Readiness – the FY 17 Budget Amendment
Address immediate and serious readiness challenges
Driven by acceleration of campaign against ISIS
May increase force structure and provide offsets from lower priority programs
Will be a net increase over the FY 17 topline requested by the previous administration
Due to OMB NLT 1 March 2017 ($30B: $25B base and $5B OCO; AKA RAA and ABS)
Submitted to OMB 10 March 2017; submitted to Congress 16 March 2017; above budget caps
Phase 2: Achieve Program Balance – the FY 18 PB Request
Will conduct a comprehensive but accelerated FY 18 budget review
Will include
Buying more critical munitions
Funding facilities sustainment at a higher rate
Building programs for promising advanced capability demos
Investing in critical enablers
Growing force structure at the maximum responsible rate
Due to OMB NLT 1 May 2017 ($54B over BCA cap for FY 18)
Expected to offset from domestic appropriations
Phase 3: Build Capacity and Improve Lethality – the National Defense Strategy (NDS) and FY Defense program
NDS closely coordinated with the National Security Strategy (NSS) to be signed by President Trump
Strengthen military and improve how DoD does business (includes horizontal integration to improve efficiency and take advantage of economies of scale)

5. PB 17 vs Current Caps and Prior Budgets
(Dollars in Billions)
$610
$590
$570
$550
$530
$510
Original BCA Caps
$490
$470
FY10
FY11 FY12 FY13
FY Actuals
FY 2015 PB
Current Caps
FY14 FY15
FY16
FY17
FY18 FY19
FY20
FY21
FY 2013 PB/DSG
FY 2017 PB
FY 2016 PB
Original BCA Caps

6. The FY 2017 Budget: Key Points
Adheres to the Bipartisan Budget Act of 2015
(Dollars in Billions)
– Base budget request
$523.9
– Overseas Contingency Operations (OCO) budget request
$58.8
– Total budget request
$582.7
Funds a joint force with the capacity and capability to:
Defend the homeland
Respond to five challenges (AKA CRIKT/CRIKCT/4+1)
Russia
China
North Korea
Iran
Global counter-terrorism
Respond to aggression from two different adversaries with overlapping timelines
DoD requires funding above the BCA levels after FY 2017 to properly support this strategy

7. Secretary Carter, February 2, 2016
Secretary Carter’s Priorities for This Budget
Given the current level of budget resources ($800B in Budget Control Act cuts), we
can’t reduce all risk. Instead, the Department must:
Prioritize conventional deterrence against our most advanced adversaries
Focus more on the shape than the size of the force
Seek the best balance between force structure (size), modernization (capability) and
readiness
Emphasize lethality and capability of the force rather than size
Emphasize posture rather than presence
Emphasize innovation
Attracting, retaining, and managing talent (Force of the Future)
Update war plans and operational concepts
Pursue “offset” technologies
Institutional efficiency and reform
“Today’s security environment is dramatically different … and it
requires new ways of thinking and new ways of acting”
Secretary Carter, February 2, 2016

8. FY 2017 Force Structure
Force structure assessed sufficient to execute the strategy
Major elements include:
14 SSBNs, 450 ICBMs
96 Operational Bombers (154 total)
287-ship Navy with 11 Carriers in FY 2017
(Building to a 308-ship Navy)
54+1 Tactical fighter squadrons
990k Army Total End Strength (460k Active)
(30 Active BCTs in FY 2017)
221k Marine Corps Total End Strength (182k Active)
FY 2017 Force Structure Sufficient to Execute Strategy

9. Military Construction and Family Housing,
FY 2017 Base Funding
By Appropriation Title
By Military Department
Military Construction and Family Housing,
$7.4
Military Personnel,
$135.2
Defense Wide
$94.5
RDT&E,
$71.4
Army
$122.9
Procurement,
$102.5
Air Force
$151.1
Navy
$155.4
O&M,
$205.8
FY 2017 Request: $523.9 billion

10. Military Construction and Family Housing,
FY 2017 OCO Funding
By Appropriation Title
By Military Department
Military Construction and Family Housing,
$7.4
Military Personnel,
$3.5
RDT&E, $.3
Procurement,
$9.5
Defense Wide
$8.5
Army
$25.0
Air Force 15.8
O&M,
$45.0
Navy
$9.5
FY 2017 Request: $58.8 billion

11. FY 2017 Total Base and OCO Funding
By Appropriation Title By Military Department
Military Construction and Family Housing,
$7.6
Defense Wide
$102.9
RDT&E,
$71.7
Military
Personnel,
$138.5
Army
$148.0
Procurement,
$112.0
Air Force
$166.9
Navy
$164.8
O&M,
$250.9
FY 2017 Request: $582.7 billion

12. 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
How many phases are in the PPBE process?
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…

13. Key PPBE Action Officers
AIR FORCE: Program Element Monitor ( PEM )
Works for Air Force SAE (SAF/AQ)
Each Air Force program element is assigned a PEM
Interfaces with Using Commands, Material Command, Air Staff, Air Secretariat, OSD, and sometimes Congress
A PEM may be responsible for more than one program element
NAVY: Requirements Officer ( RO )
Works for resource sponsor on OPNAV staff (e.g., Navy Aviation resource sponsor is N98)
Interfaces with Using Commands, Systems/Developing Commands, OPNAV Staff, Navy Secretariat (especially ASN/RDA, Mr. Stackley), and OSD
ARMY: Department of Army Systems Coordinator (DASC)
Works for Army SAE (ASA/ALT)
Interfaces with Using Commands, Developing Commands, Army Staff, Army Secretariat, OSD, and Congress
Importance of Headquarters Action Officers in the PPBS process
Each service does it somewhat differently with different players. AF = PEMs, Navy = ROs, Army = DASCs
Important point about AOs is that it is absolutely essential the PMO stay connected to, and maintain open lines of communication with the PPBS AOs . This is especially true during POM build when Services are RESOURCING and prioritizing programs. Though it is important that PMO’s know what AOs are up to, it is equally important that PMO’s ensure that AOs know what is going on in their programs and keep them up to date and informed. PPBS Action Officers field questions about programs from Congress, OSD, Users, etc. on a regular basis--and they don’t always have time to confer with the PMO.

14. Future Years Defense Program (FYDP)
Computer Database Maintained by OSD CAPE
Contains Approved Force Structure and Resources for all Defense Programs
Updated 3 Times this PPBE Cycle:
Program Objectives Memorandum (POM) – Jun
Budget Estimate Submission (BES) Dec
President’s Budget (PB) - TBD
Reflects PY, CY, BY, + 4 Out-Years
3 additional years for force structure only
Component PPBE databases
Navy: PBIS
Air Force : ABIDES
Army: PROBE
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 16 17 18 19

15. 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)

16. 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

17. PPBE – Planning Phase - Led 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)

18. PPBE - Program Review CAPE POM JUN JUL AUG SEP OCT NOV DoD
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
PDM – Program Decision Memoranda
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”
PDM
Program Review focus:
Compliance with DPG

19. 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
PBD – Program Budget Decision
USD(C) – Undersecretary of Defense (Comptroller)
Components/
Defense
Agencies
BES PB
MBI
USD(C) &
OMB
FYDP
Update
Services / PEO / PM Answer / Reclama
DEC JAN FEB
PBDs
Adv Questions/
OSD/OMB Budget Hearings
Budget Review focus:
Pricing
Funding policies
Phasing
Budget execution

20. FY 18–22 Program/Budget Review Schedule

21. Resource Allocation Process
Budget.
FY 18
Budget.
FY 19

22. Related Topics Other Affordability Topics:
When should you start becoming concerned about affordability?
APB trade space (Cost, Schedule, Performance)
What performance are you willing to trade off?
At what point should we relook the AoA?
Should Objective equal Threshold (O=T)?
How firm is the threshold value?
Cost as an Independent Variable (CAIV)
How do you get funding for an AoA? O&M? RDT&E?
Who is responsible for the AoA?
How long does it take to get an approved capability document?
How can it be done faster?
How long does it take to get funding for a program?
How fast do you really have to have the capability?
What do you really need now versus what can wait?
PPBE timing adequacy?
Time Now versus desired IOC date versus time for each acq phase

23. Backups

24. PPBE – Planning Phase Lead by USD (P)
YEAR 1
YEAR 2
Elapsed Time: Months
FEB/MAR
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 know 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
SCMR – Strategic Choices and Management Review
USD(P) – Undersecretary of Defense (Policy)
Planning Phase focus:
Threat vs. Capabilities
Update strategy
Guidance for programming &
budgeting
NSS
Every
4 Years
Guidance for POM/BES submission and OSD Integrated 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
NMS
Level
CPR
(JCS,
COCOMs,
SERVICES)

25. Process for SD Decision
PB18
Service POMs
Injects
Review Criteria
Process for SD Decision
Budget Review
Army
Navy
USAF
USMC
SOCOM
MDA
Other
components
SPRs
(~$20B initiatives)
Ground Combat
CP2
Third Offset
Space
Munitions
Contested Mobility
Stress on the Force
SecDef Priorities
Five Challenges (CRIKCT)
Innovative Capabilities & Operational Concepts
Big Bets (Space, Cyber, EW)
Force of the Future
Principled and Inclusive Security Network
Reform
Issue Teams
Topline
Supplemental
Economic Assumptions
Execution
3 Stars
DMAGs
SD Decisions
Issue Papers
($87B accepted)
Russia/ERI
Cyber, ISR, Space & Nuclear
OCO & Readiness
Innovation & Third Offset
PDM
(November)
Components submit balanced BES

26. FY 2017 Budget Supports Planned force structure levels
Service readiness recovery plans
A safe, secure and reliable nuclear force at New START levels
Force of the Future initiatives
Modernization:
DDG modernization and SSN upgrades
Surface ship advanced munitions and sensor technologies
Investment in space capabilities
Hypersonic research and development
Cyber tools for Combatant Commanders
Army aviation modernization plan
Marine Corps vehicle modernization plan
Key reform proposals (e.g., TRICARE)

27. End Strengths in FY 2017 Budget and FYDP
End of FYDP
Maintain strength ramps for Army and Marine Corps active and reserves forces
Active Army includes support for 30 Brigade Combat Teams (BCTs)
460,000
450,000
Army Reserve
195,000
Army National Guard includes support for 26 BCTs
335,000
Total Army End Strength
990,000
980,000
Active Marine Corps supports rotation demands of 7.6 Infantry Battalions and enablers
182,000
Marine Corps Reserve
38,500
Total Marine Corps End Strength
220,500
Retain Navy force structure
Active Navy
322,900
323,100
Navy Reserve
58,000
58,900
Total Navy End Strength
380,900
382,000
308 ships Navy with 11 Carriers by FY 2021
14 SSBNs
Maintain active Air Force to address high optempo and shortfalls in active fighter maintainers
Active Air Force
317,000
Air Force Reserve
69,000
68,500
Air National Guard
105,700
105,200
Total Air Force End Strength
491,700
490,700
96 operational bombers
55 combat coded fighter squadrons
Total Active Forces End Strength
1,281,900
1,272,100
Total Reserve Forces End Strength
801,200
801,100

28. Numbers may not add due to rounding
DoD Funding from 9/11 Through FY 2017 Request
(Discretionary Budget Authority)
$800
$700
691
687
666
666
645
601
163
$600
187
153
159
115
578
581
560
534 59 59 82 85
169 63
$500
468
479
124
437 79 91
$400 73
345
316 17
$300 29
$200
377
528
530
495
$100 $0
FY01
FY02
FY03
FY04
FY05 FY06 FY07 FY08 FY09 FY10 FY11
FY12 FY13 FY14 FY15 FY16 FY17
Numbers may not add due to rounding
DoD Topline, FY 2001 – FY 2017
(Current Dollars in Billions)
Base Budget OCO/Other Budget

29. Service Readiness Army: Navy: Marine Corps: Air Force: SOCOM:
PB 2017 supports high-end collective training exercises and home station training, resulting in 19 combat training center rotations in 2017
Training plan allows Army to ramp to full-spectrum training proficiency and leader development by 2021
Navy:
Level-loaded ship maintenance requirements to ensure consistent and sustainable
maritime presence
PB 2017 supports deployed readiness while investing in aircraft maintenance to bridge the gap between legacy and next-generation platforms
Marine Corps:
PB 2017 sustains Marine Corps crisis response operational concept and capabilities, and supports readiness and maintenance issues of non-deployed forces
Air Force:
PB 2017 supports balance between flying hours and weapon system sustainment to continue full-spectrum readiness gains, but relief from high operational tempo and time is needed to regain combat readiness
Increases training exercises and range training to achieve readiness goals
SOCOM:
PB 2017 maintains funding for deployments and has sufficient surge capacity to support
Operational Plans and contingencies
USSOCOM will achieve full spectrum readiness in 2020

30. How we hit the lower FY 2017 topline
(Dollars in Billions)
$10
$+5.0B $5
OCO Relief
$-21.8B
$-16.8B $0
Fuel Savings,
$-2.8B
Net Cut to Base Budget
FY 2017
-$5
Inflation Savings,
$-2.4B
New Efficiencies,
$-0.4B
Gross BBA cut
-$10
Net Program changes,
$-11.2B
-$15
-$20
-$25
Comparison to FY 2016 PB Plan for FY 2017

31. Cuts to hit the lower FY 2017 Topline
We will procure fewer weapons systems than planned:
9 AH-64 Apache helicopters (Army)
24 UH-60 Blackhawk helicopters (Army)
5 F-35 A Joint Strike Fighters
2 V-22 aircraft (Navy)
3 C-130J aircraft (Air Force)
4 LCAC Service Life Extension Programs (Navy)
77 Joint Light Tactical Vehicles (Marine Corps)
Aircraft procurement accounts reduced $4.4 billion
Shipbuilding reduced $1.75 billion
Other procurement accounts reduced $2.6 billion
Reduce plans for new military construction projects by $1.1 billion
Comparison to FY 2016 PB Plan for FY 2017

32. FY 18-22 Program Budget Review Cycle
SecDef selected 7 Strategic Portfolio Reviews (SPRs)
Third Offset Strategy (USD(AT&L) and D,CAPE)
Strategic Mobility in a Contested Environment (US TRANSCOM and D,CAPE)
Stress on the Force, Posture, and Global Presence (USD(P), Joint Staff, and D,CAPE)
Ground Combat (Joint Staff, USD(AT&L), and D,CAPE)
Space (Principal DoD Space Advisor and D,CAPE)
Munitions (Joint Staff and D,CAPE)
Counter-Power Projection (USD(P) and D,CAPE)
Importance of Headquarters Action Officers in the PPBS process
Each service does it somewhat differently with different players. AF = PEMs, Navy = ROs, Army = DASCs
Important point about AOs is that it is absolutely essential the PMO stay connected to, and maintain open lines of communication with the PPBS AOs . This is especially true during POM build when Services are RESOURCING and prioritizing programs. Though it is important that PMO’s know what AOs are up to, it is equally important that PMO’s ensure that AOs know what is going on in their programs and keep them up to date and informed. PPBS Action Officers field questions about programs from Congress, OSD, Users, etc. on a regular basis--and they don’t always have time to confer with the PMO.

33. “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)

34. Bipartisan Budget Act of 2015
FY 16 (Base) Revised Security Revised Non-Security
Current Law (BCA 2011) $523B $493B
Revised Cap (BBA 2015) $548B $518B
Delta $25B +$25B
FY 17 (Base)
Current Law (BCA 2011) $536B $504B
Revised Cap (BBA 2015) $551B $519B
Delta $15B +$15B
Total Federal Govt Discretionary Base increase $80B (FY 16 $50B; FY 17 $30B)
Defense
FY 16 Base -$12B (PB 16 $534B - $522B BBA 2015)
FY 16 OCO +$7B (PB 16 $52B - $59B BBA 2015)
FY 16 Net $5B
FY 17 Base -$21B (PB 16 $547B - $526B BBA 2015)
FY 17 OCO +$2B (PB 16 $57B - $59B BBA 2015)
FY 17 Net -$19B

35. Bipartisan Budget Act of 2015 Cont.
Debt ceiling suspended until March 2017
Revenue sources:
Tightening tax rules for business relationships
Selling off crude oil reserve
Auctioning off government controlled wireless spectrums
Spending adjustments
Make changes to Medicare and Social Security

36. Senior Leader Review Group AKA “The Large 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

37. Affordability Defense Acquisition Guide (DAG), Oct 2012 (1/4)
Chapter Affordability in the DoD Decision Support System
JCIDS – Balances cost vs performance in establishing KPPs
Milestone A – 10 U.S.C. 2366a – Congressional certification (for MDAPs)
MDA certifies to Congress that a cost estimate has been submitted
After consultation with JROC
With Concurrence from D,CAPE
PM must notify MDA between MS A and MS B, if
1. Projected cost of program exceeds the cost estimate by 25% OR
2. The time to reach IOC exceeds the scheduled duration by 25%
The DAB considers affordability in the context of the capability portfolio and from a unit cost standpoint
Portfolio: Done by lead service in the context of all other weapons systems in the portfolio or mission area
Unit cost: Nominally the average unit acquisition cost* and average annual O&S cost per unit (* could be PAUC or APUC)
Affordability targets are recorded in the MS A ADM

38. Affordability DAG (2/4)
Milestone B – 10 U.S.C. 2366b – Congressional certification
Based on a business case analysis, MDA certifies to Congress:
The program is affordable
Trade-offs between C/S/P have been made
D,CAPE concurs with reasonable cost and schedule estimates
Funding is available in the FYDP

39. Affordability DAG (3/4) 3.2.2 Affordability Assessments
Projected annual funding – 4-step process
Address acq and O&S funding, force structure, and manpower requirements
FYDP +/- 12 years
Unit cost approach
Compare unit cost of current program to unit cost of legacy system
Use base year dollars

40. Affordability DAG (4/4) 3.2.3 Full Funding
At MS B, the most likely cost dollars and manpower needed to carry out the acquisition strategy are in the FYDP
For MDAPs, the MDA must certify this in the 2366b certification and D,CAPE must concur
MDAs should assess this for all major decision points for all acq programs
NOTE: DODI (Interim) , November 25, 2013 states that the DoD component will demonstrate that the program will be fully funded within the FYDP at MS A

41. 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.

42. Defense Topline Budget

43. Continuing Resolution (CR)
If Congress fails to pass appropriations acts prior to 1 October, it may pass a joint Continuing Resolution which must be signed by the President
Continuing Resolution Authority is stopgap spending authority allowing federal government to continue operating
Allows obligation of funds at the lesser of:
____________________________________________
Normal rate based on last year’s appropriation
Normal rate based on lowest Congressional mark
ASK STUDENTS AT START!
How often does the Defense Appropriation Act get passed before the end of the fiscal year? 3/4? 1/2? What do you think?
About 1/3
Assume one-month CRA, $100M program
RDT&E or O&M  1/12th of $100M or $12M
Procurement  1st year’s worth (~80%) - full funding!
New Start programs NOT PERMITTED
Congressional Special Interest programs may have specific direction
No initiation of MYPs or increase in production rates above last fiscal year’s level
CRA Anomaly

44. Notional Enactment Process and Timeline
President’s Budget to
Congress
Notional Enactment Process and Timeline
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
HBC
HEARINGS
FLOOR
BUDGET
RESOLUTION
MARKUPS
CONCURRENT
RESOLUTION
CONF
HEARINGS
SBC
MARKUPS
FLOOR
HASC
HEARINGS
MARKUPS
FLOOR
FLOOR
Authorizations
Act
AUTHORIZATION
CONF
FLOOR
SASC
HEARINGS
MARKUPS
FLOOR
HAC
HEARINGS
MARKUPS
FLOOR
FLOOR
Appropriations
Act
APPROPRIATION
CONF
HEARINGS
MARKUPS
FLOOR
FLOOR
SAC

45. 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